Question

The Marchetti Soup Company entered into the following transactions during the month of June:

(1) purchased inventory on account for $165,000 (assume Marchetti uses a perpetual inventory system).
(2) paid $40,000 in salaries to employees for work performed during the month.
(3) sold merchandise that cost $120,000 to credit customers for $200,000.
(4) collected $180,000 in cash from credit customers; and (5) paid suppliers of inventory $145,000.
Required:
(a) Analyze each transaction and show the effect of each on the accounting equation for a corporation.

Answer 1

Kindly find the following transactions of Marchetti Soup Company during the month of June below in the Explanation section

Step-by-step explanation:

Solution

Transaction Account Title Debit Credit

1. Inventory 165,000

Accounts payable 165,000

2. Salaries expense 40,000

Cash 40,000

3. Accounts receivable 200,000

Sales 200,000

Cost of merchandise sold 120,000

Inventory 120,000

4 Cash 180,000

Accounts receivable 180,000

5 Accounts payable 145,000

Cash 145,000