Question

Rita Company buys merchandise on account from Linus Company for $590. Rita sells the goods to Ellis for $900 cash. Use a tabular summary to record the transactions for Rita Company using a perpetual inventory system.

Answer 1

Record of transaction is given below

Step-by-step explanation:

given data

Selling price of goods = $900

Cost of goods sold = $590

solution

we get here Record of transaction in Rita Company that is

Inventory accounts Dr $900

Account payable Cr $900

and

Record of transaction in Linus Company is

Account receive able Dr $900

Sales revenue Cr $900

and

Cost of goods sold Dr $590

Inventory Cr $590