Cargile Corporation Is a Merchandising Company That Had an Inventory

Essay

Cargile Corporation is a merchandising company that had an inventory account balance at July 31 of $40,000. The company uses a perpetual inventory system. The following transactions occurred during August.
August 1 Purchased inventory for $1,000 on credit with terms 2/10, net 30.
August 2 The goods purchased August 1 were received by Cargile. The goods had been sent FOB destination from the vendor. Delivery charges amounted to $50.
August 8 Customer purchased $15,500 of merchandise on account. The merchandise had cost Cargile $9,980.
August 9 Paid vendor for August 1 purchase.
August 15 Cargile bought $5,000 of inventory for cash.
August 16 The goods purchased August 15 were sent FOB shipping point. Delivery charges of $75 were charged to a UPS account.
August 17 Customer who purchased inventory on August 8 returned $1,500 of the inventory due to product defects. These goods had a cost to Cargile of $975.
August 18 Cargile returned $400 of goods purchased on August 15 to the vendor and received a check for that amount.
Required:
A) Journalize each of these transactions in Cargile's accounting records. If no entry is needed, write "no entry."
B) Compute Cargile's cost of goods available for sale for August.
C) Compute Cargile's cost of goods sold for August.
D) Compute Cargile's ending inventory for August.
E) Assume that Cargile counted and priced its inventory at August 31 and found a total of $34,000 of inventory on hand. Why might this amount differ from the answer you obtained in part (d)?