Question

2. The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $175,000 (assume Marchetti uses a perpetual inventory system); (2) paid $46,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $132,000 to credit customers for $230,000; (4) collected $210,000 in cash from credit customers; and (5) paid suppliers of inventory $155,000.

Prepare journal entries for each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Answer

Transaction	Accounts title	Debit	Credit
1	Merchandise Inventory (or Inventory)	$175,000
	Accounts Payable		$175,000
	(to record purchases on accounT)
2	Salaries expenses	$46,000
	Cash		$46,000
	(to record payment of salaries)
3	Accounts receivables	$230,000
	Sales Revenue		$230,000
	(to record sales on account
	Cost of Goods Sold	$132,000
	Merchandise Inventory (or Inventory)		$132,000
	(to record the cost of sales)
4	Cash	$210,000
	Accounts receivables		$210,000
	(to record Cash collections)
5	Accounts Payable	$155,000
	Cash		$155,000
	(to record Cash paymnets)