ACCT 200 1st Edition Lecture 15 Outline of Last Lecture I E 6 4 II E 6 7 III COGS IV E 6 12 V Miscellaneous Outline of Current Lecture I Review II BE 6 16 Current Lecture Review Purchase entries purchase inventory to resell or related transactions Sales entries sales to customers returns or payments from customers Purchase inventory on acct terms 2 10 net 30 Dr inventory Cr acct payable Return of inventory purchased Dr acct payable Cr inventory Payment taking discount Purchase 4000 return 500 terms 2 10 net 30 pay and take discount Only take discount on balance due when paying 4000 500 3500 due 3500 02 70 discount Dr Acct payable 3500 Cr cash 3430 Cr inventory 70 BE 6 16 Net sales 200 000 COGS 140 000 Begin inventory 45 000 End inventory 35 000 Avg inventory 40 000 Turnover COGS avg inv 140 000 40 000 3 5 times inventory turns over 3 5 times per year Avg days in inventory 365 turnover 365 3 5 104 29 days Gross profit ratio net sales COGS net sales 200 000 140 000 200 000 3 30
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