Journalize the following transactions for Armour Inc.using both the periodic inventory system and the perpetual inventory system,presented in the side-by-side format of the form provided below.
Oct.7 Sold $1,200 of merchandise on credit to Rondo Distributors,terms n / 30; the cost of the merchandise was $720.
Oct.8 Purchased merchandise,$10,000; terms FOB shipping point and 2 / 15,n / 30; with prepaid freight charges of $525 added to the invoice.
Definitions:
Net Annual Operating
Typically refers to the net operating income or profit generated by a business over the course of a year, excluding non-operating revenues and expenses.
After-Tax Discount Rate
The rate used to discount future cash flows of an investment after taxes have been accounted for, reflecting the investor's required rate of return net of taxes.
Working Capital
The difference between a company's current assets and current liabilities, indicating the short-term liquidity.
Straight-Line Depreciation
This method evenly allocates the cost of an asset over its useful life.
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