Question

Rita Company buys merchandise on account from Linus Company for $590. Rita sells the goods to Ellis for $900 cash. Use a tabular summary to record the transactions for Rita Company using a perpetual inventory system.

Answer 1

Answer:

Record of transaction is given below

Explanation:

given data

Selling price of goods =  $900

Cost of goods sold = $590

solution

we get here Record of transaction in Rita Company that is

Inventory accounts   Dr   $900

Account payable    Cr      $900

and

Record of transaction in Linus Company is

Account receive able  Dr  $900

Sales revenue              Cr  $900

and

Cost of goods sold    Dr   $590

Inventory                    Cr    $590