Question

question 2

Prepare the journal entries to record the following transactions on Cheyenne Company's books under a perpetual inventory system. (a) On March 2, Oriole Company sold $932,000 of merchandise on account to Cheyenne Company, terms 3/10, n/30. The cost of the merchandise sold was $581,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit Account Titles and Explanation Debit

Answer 1

Solution

Accounts title and explanation	Debit	credit
Accounts receivable	$      932,000.00
Sales revenue		$     932,000.00
(To record sales)
Cost of goods sold	$      581,000.00
Merchandise inventory		$     581,000.00
(To record cost of goods sold)

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In perpetual inventory cost of goods sold is recorded each time sales is made.