Question

Marigold Company buys merchandise on account from Whispering Winds Corp.. The selling price of the goods is $830, and the cost of the goods is $480. Both companies use perpetual inventory systems.

Journalize the transactions on the books of both companies.

Answer 1

In the book of Marigold Company

Debit: Inventory 830

Credit: Accounts Payable $830

In the book of Whispering Winds Corp.

Debit: Accounts Receivable $830

Credit: Sales Revenue $830

Debit: Cost of Goods Sold $480

Credit: Inventory $480

Step-by-step explanation:

Note: See the attached showing how the entries will appear as a compliment to the following:

In the book of Marigold Company

Debit: Inventory 830

Credit: Accounts Payable $830

Being the amount of merchandise purchased on account from Whispering Winds Corp.

In the book of Whispering Winds Corp.

Debit: Accounts Receivable $830

Credit: Sales Revenue $830

Being the amount of merchandise sold on account to Whispering Winds Corp.

Debit: Cost of Goods Sold $480

Credit: Inventory $480

Being the cost of merchandise sold on account to Whispering Winds Corp

Answer 2

Marigold Company

Inventory 830

Accounts Payable 8300

Whispering Company

Accounts Receivable 830

Sales Revenue 830

Cost of Goods Sold 480

Inventory 480

Step-by-step explanation:

Journalizing a transaction simply means recording all your business transaction in an accounting record. It is usually done in a chronological order.

Marigold Company

Inventory 830

Accounts Payable 8300

Whispering Company

Accounts Receivable 830

Sales Revenue 830

Cost of Goods Sold 480

Inventory 480