Question

Corporation 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 Bridget, which uses the perpetual inventory system.
2. For these transactions, show what Bridget 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.
Journalize the purchase of inventory. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)
Journal
Accounts Debit Credit
Accounts Receivable 180,000
Cost of Goods Sold 235,000

Answer 1

1.

A. Dr Inventory 180,000

Cr Accounts Payable 180,000

B. Dr Accounts Receivable 235,000

Cr Sales Revenue 235,000

C. Dr Cost of Goods Sold 135,000

Cr Inventory 135,000

D. Dr Cash 70,500

Cr Accounts Receivable 70,500

2. BALANCE SHEET $45,000

INCOME STATEMENT $100,000

Step-by-step explanation:

1. Preparation of the journal entry

A. Preparation of the journal entry for the purchase of inventory.

Dr Inventory 180,000

Cr Accounts Payable 180,000

(Being to record the purchase of inventory)

B. Preparation of the journal entry for sale

Dr Accounts Receivable 235,000

Cr Sales Revenue 235,000

(Being to record sale revenue)

C. Preparation of the journal entry to

Record the cost of goods sold portion of the sale.

Dr Cost of Goods Sold 135,000

Cr Inventory 135,000

(75%*180,000)

(Being to record cost of goods sold portion of the sale)

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

Dr Cash 70,500

Cr Accounts Receivable 70,500

(30%*235,000)

(Being to record the collection of 30% of the accounts receivable)

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

BALANCE SHEET

Current Assets:

Inventory $45,000

(180,000-135,000)

Therefore the company will report $45,000 on the balance​ sheet

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

INCOME STATEMENT

Sales revenue 235,000

Less Cost of Goods Sold 135,000

Gross profit $100,000

Therefore the company will report $100,000 on the income​ statement