Question

Prepare the journal entries to record the following transactions on McLeena Company’s books using a perpetual inventory system. (a) On March 2, Borst Company sold $800,000 of merchandise to McLeena Company on account. The cost of the merchandise sold was $540,000. (b) On March 6, McLeena Company returned $140,000 of the merchandise purchased on March 2. The cost of the merchandise returned was $94,000.

Answer 1

The journal entries are made as follows;

Step-by-step explanation:

March 2. Account Receivable-Mcleena Co. Dr.$800,000

Sales Revenue Cr.$800,000

Cost of Goods Sold Dr.$540,000

Inventory Cr.$540,000

March 6. Sales Revenue Dr.$140,000

A/R-Mcleena Co. Cr.$140,000

Inventory Dr.$94,000

Cost of Goods Sold Cr.$94,000