Question

The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $240,000 (assume Marchetti uses a perpetual inventory system); (2) paid $59,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $158,000 to credit customers for $295,000; (4) collected $275,000 in cash from credit customers; and (5) paid suppliers of inventory $220,000Prepare journal entries for each of the above transactions.

Answer 1

Answer:

Explanation:

The journal entries are shown below:

1. Merchandise inventory A/c Dr $240,000

           To Account payable A/c $240,000

(Being the inventory is purchased on account)

2. Salaries expense A/c Dr $59,000

        To Cash A/c $59,000

(Being the salaries expense is paid for cash)

3. Accounts receivable A/c Dr  $295,000

             To Sales revenue A/c $295,000

(Being the merchandise of inventory is recorded)

Cost of goods sold A/c Dr $158,000

     To Merchandise inventory A/c $158,000

(Being the merchandise of inventory is recorded)

4. Cash A/c Dr $275,000

       To Account receivable $275,000

(Being the received cash is recorded)

5. Accounts payable A/c Dr $220,000

          To Cash A/c $220,000

(Being the suppliers of inventory is recorded)