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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Journal Entries Mead Company uses a perpetual inventory system and engaged in the following transactions during the month of May:

Chapter 3, Problem 2E, Journal Entries Mead Company uses a perpetual inventory system and engaged in the following

Required:

Record the preceding transactions in a general journal.

To determine

Prepare journal entry to record the transaction of Company M.

Explanation

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Prepare journal entry to record the transaction of Company M.

...
DateAccount titles and ExplanationDebitCredit
May 1Cash$6,300 
      Sales revenue $6,300
 (To record cash sales)  
    
May 1Cost of goods sold$3,700 
      Inventory $3,700
 (To record cost of goods sold)  
    
May 5Inventory$2,000 
      Accounts Payable $2,000
 (To record purchase inventory on credit)  
    
May 9Accounts receivable$3,300 
      Sales revenue $3,300
 (To record credit sales)  
    
May 9Cost of goods sold$1,900 
      Inventory $1,900
 (To record cost of goods sold)  
    
May 13Sales salaries expense$900 
 Office salaries expense$600 
      Cash $1,500
 (To record salaries paid)  
    
May 14Accounts payable$2,000 
      Cash $2,000
 (To record payment of inventory purchase on May 5)  
    
May 18Equipment$8,000 
      Cash $2,000
      Accounts payable $6,000
 (To record equipment purchased partly on cash and credit)  
    
May 21Inventory$600 
 

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