PERIODIC PERPETUAL = continuous

2-Dec Purchases 2,500,000 2-Dec Merchandise Inventory 2,500,000

Accounts payable 2,500,000 Accounts payable 2,500,000

2-Dec Freight in 100,000 2-Dec Merchandise Inventory 100,000

Cash 100,000 Cash 100,000

3-Dec Accounts payable 150,000 3-Dec Accounts payable 150,000

Purchase return and allowance 150,000 Merchandise Inventory 150,000

15-Dec Accounts receivable 4,800,000 15-Dec Accounts receivable 4,800,000

Sales 4,800,000 Sales 4,800,000

15-Dec Cost of sales 2,400,000

Merchandise Inventory 2,400,000

18-Dec Sales return and allowance 80,000 18-Dec Sales return and allowance 80,000
Accounts receivable 80,000 Accounts receivable 80,000

18-Dec Merchandise Inventory 40,000

We account for the inventory at the end of the period . Cost of sales 40,000

Example:
Per count = 9,000 pieces unsold
Cost per piece = P10 Merchandise Inventory
2,500,000 150,000
31-Dec Merchandise Inventory 90,000 100,000 2,400,000
Income summary 90,000 40,000
2,640,000 2,550,000
90,000