ACCT1501 TUT8

DQ 9.2 How is COGS determined:

a) Perpetual Under a perpetual system, whenever a sales occurs, COGS is
recorded immediately
b) Periodic Under a periodic system the total of COGS is recorded at the end of
the period
P 9.2
1. a) Perpetual inventory
Frog Ltd
Dr Inventory
Cr A/c payable
Dr A/c receivable
Cr Sales revenue
Dr COGS
Cr Inventory
Dr Operating expense
Cr Cash
Dr Inventory shortage
Cr Inventory
Dr P & L Summary
Cr COGS
Cr Operating expense
Cr Inventory shortage
Dr Sales Revenue
Cr P & L summary
Dr P & L Summary
Cr Retained Profits
b)

120 000
120 000
210 000
210 000
140 000
140 000
35 000
35 000
200
200
175 200
140 000
35 000
200
210 000
210 000
34 800
34 800

Periodic

Frog Ltd
Dr COGS Opening
Inventory
Cr Inventory
Dr Inventory
Cr COGS Closing
inventory
Dr Inventory
Cr A/c payable
Dr A/c receivable
Cr Sales revenue
Dr Operating expense
Cr Cash

40 000
40 000
19 800
19 800
120 000
120 000
210 000
210 000
35 000
35 000

Dr P & L Summary
Cr Purchases
Cr Operating expense
Cr COGS Opening
Dr Sales revenue
Dr COGS Closing
Cr P & L summary
Dr P & L Summary
Cr Retained Profits

195 000
120 000
35 000
40 000
210 000
19 800
229 800
34 800
34 800