Mead Company uses a perpetual inventory system and engaged in the following transactions during the month of May:DateTransactionMay 1Made cash sales of $6,300; the cost of the inventory was $3,700.5Purchased $2,000 of inventory on credit.9Made credit sales of $3,300; the cost of the inventory sold was $1,900.13Paid sales salaries of $900 and office salaries of $600.14Paid for the May 5 purchases.18Purchased sales equipment costing $8,000; made a down payment of $2,000 and agreed to pay the balance in 60 days.21Purchased $600 of inventory for cash.27Sold land that had originally cost $1,900 for $2,600.

Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Answered: Mead Company uses a perpetual inventory…

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

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Mead Company uses a perpetual inventory system and engaged in the following transactions during the month of May:

Date	Transaction
May 1	Made cash sales of $6,300; the cost of the inventory was $3,700.
5	Purchased $2,000 of inventory on credit.
9	Made credit sales of $3,300; the cost of the inventory sold was $1,900.
13	Paid sales salaries of $900 and office salaries of $600.
14	Paid for the May 5 purchases.
18	Purchased sales equipment costing $8,000; made a down payment of $2,000 and agreed to pay the balance in 60 days.
21	Purchased $600 of inventory for cash.
27	Sold land that had originally cost $1,900 for $2,600.