Question

Apparel purchased 90 new shirts and recorded a total cost of $2,644 determined as follows: Invoice cost $ 2,160 Shipping charges 194 Import taxes and duties 160 Interest (6.0%) on $2,160 borrowed from the bank to finance the purchase 130 $ 2,644 Required: Prepare the journal entry to record this purchase in the correct amount, assuming a perpetual inventory system.

Answer 1

Answer:

Merchandise inventory   2,514 debit

       Accounts payable             2,160 credit

       Cash                                      194 credit

       Import tariff                           160 credit

--to record the acquisition of imported inventory--

interest expense   130 debit

        interest payable      130 credit

--to record accrued interest--

Explanation:

The inventory will enter the accounting as the sum of all necessary cost to acquired an leave it ready for use or sale. In this case,the freigth and tariff are necessary but, the interest don't Therefore, they will be declared costo fo the period