Question

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.

Answer 1

Answer:

Explanation:

The journal entries are shown below:

May 1

Cash A/c Dr $6,300

       To Sales revenue A/c $6,300

(Being the cash sales is recorded)

May 1

Cost of goods sold A/c Dr $3,700

       To Merchandise inventory A/c $3,700

(Being the cost of the inventory is recorded)

May 5

Merchandise inventory A/c Dr $2,000

        To Account payable A/c $2,000

(Being the merchandise on account is recorded)

May 9

Account receivable A/c Dr $3,300

                To Sales revenue $3,300

(Being the goods are sold on credit)

May 9

Cost of goods sold A/c Dr $1,900

           To Merchandise inventory A/c $1,900

(Being the merchandise of inventory is recorded)

May 13

Sales salaries expense A/c Dr $900

Office salaries expense A/c Dr $600

      To Cash A/c $1,500

(Being the expenses are recorded)

May 14

Account payable A/c Dr $2,000

    To Cash A/c $2,000

(Being the amount is paid)

May 18

Equipment A/c Dr $8,000

      To Cash A/c $2,000

      To Account payable A/c $6,000

(Being equipment is purchased on account and on cash is recorded)

May 21

Inventory A/c Dr $600

    To Cash A/c $600

(Being the purchase of inventory is recorded for cash)

May 26

Cash A/c Dr $2,600

    To Land A/c $1,900

    To Gain on sale of land A/c $700

(Being the land is sold)