ACC 205 Week 3 Exercise 3 Perpetual inventory system Journal entries

3.Perpetual inventory system: journal entries.At the beginning of 20X3, Beehler Company implemented a computerized perpetual inventory system. The first transactions that occurred during 20×3 follow:

1/2/20X3 Purchases on account: 500 units @ $6 = $3,000

1/15/20X3 Sales on account: 300 units @ $8.50 = $2,550

1/20/20X3 Purchases on Account: 200 units @ $5 = $1,000

1/25/20X3 Sales on Account: 300 units @ $8.50 = $2,550

The company president examined the computer-generated journal entries for these transactions and was confused by the absence of a Purchases account.

a. Duplicate the journal entries that would have prepared on the computer printout under FIFO & LIFO.

b. Calculate the balance in the firm’s Inventory account under each method.

c. Briefly explain the absence of the Purchases account to the company president