Question

Martinez Company buys merchandise on account from Monty Corp.. The selling price of the goods is $1,330, and the cost of the goods is $980. Both companies use perpetual inventory systems.Journalize the transaction on the books of both companies

Answer 1

Martinez Company

Dr Inventory $1,330

Cr Accounts Payable $1,330

Monty Corp

Dr Accounts Receivable $1,330

Cr Sales Revenue $1,330

Dr Cost of Goods Sold $980

Cr Inventory $980

Step-by-step explanation:

Preparation of the journal entries on the books of both companies

Martinez Company

Dr Inventory $1,330

Cr Accounts Payable $1,330

Monty Corp

Dr Accounts Receivable $1,330

Cr Sales Revenue $1,330

Dr Cost of Goods Sold $980

Cr Inventory $980