Question

​, ​Inc., purchased inventory costing and sold ​% of the goods for . All purchases and sales were on account. later collected ​% of the accounts receivable. 1. Journalize these transactions for ​, which uses the perpetual inventory system. 2. For these​ transactions, show what will report for​ inventory, revenues, and expenses on its financial statements at the end of the month. Report gross profit on the appropriate statement. 1. Journalize these transactions for ​, which uses the perpetual inventory system.

Answer 1

1a. Dr Inventory 160,000

Cr Accounts Payable 160,000

1b. Dr Accounts Receivable 188,000

Cr Sales Revenue 188,000

1c. Dr Cost of Goods Sold 128,000

Cr Inventory 128,000

1d. Dr Cash 56,400

Cr Accounts Receivable 56,400

2a. $32,000

2b. $60,000

Step-by-step explanation:

1. Preparation of Journal entry using the perpetual inventory system

a. Preparation of the journal entry to record the purchase of inventory.

Dr Inventory 160,000

Cr Accounts Payable 160,000

b. Preparation of the journal entry to the sale

Dr Accounts Receivable 188,000

Cr Sales Revenue 188,000

c. Preparation of the journal entry to Record the cost of goods sold portion of the sale.

Dr Cost of Goods Sold 128,000

Cr Inventory 128,000

(80%*160,000)

d. Preparation of the journal entry to Record the collection of 30% of the accounts receivable.

Dr Cash 56,400

Cr Accounts Receivable 56,400

(30%*188,000)

2. Calculation for what Marcy will report for inventory, revenues, and expenses on its financial statements at the end of the month and to Report gross profit on the appropriate statement

2a. Calculation to Determine what the company will report on the balance​ sheet:

BALANCE SHEET

Current assets:

Inventory $32,000

[160,000-(80%*160,000)]

2b.Calculation to Determine what the company will report on the income​ statement:

INCOME STATEMENT

Sales revenue 188,000

Cost of goods sold (128,000)

(80%*160,000)

Gross profit $60,000

(188,000-128,000)