Question & Answer: Mead Company uses a perpetual inventory system and engaged in the following transactions during the month of May:…..

Mead Company uses a perpetual inventory system and engaged in the following transactions during the month of May:

Date Transaction
May 1 Made cash sales of $6,300; the cost of the inventory was $3,700.
5 Purchased $2,000 of inventory on credit.
9 Made credit sales of $3,300; the cost of the inventory sold was $1,900.
13 Paid sales salaries of $900 and office salaries of $600.
14 Paid for the May 5 purchases.
18 Purchased sales equipment costing $8,000; made a down payment of $2,000 and agreed to pay the balance in 60 days.
21 Purchased $600 of inventory for cash.
27 Sold land that had originally cost $1,900 for $2,600.

Required:

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Record the preceding transactions in a general journal.

Expert Answer

 

May 1 Cash sales
Cash $6300
Sales $6300

Cost of goods sold $3700
Merchandise inventory $3700

May 5:
Merchandise inventory $2000
Accounts payable $2000

May 9:

Accounts receivable $3300
Sales $3300

Cost of goods sold $1900
Merchandise inventory $1900

May 13:
Sales Salaries $900
Office salaries $600
Cash $1500

May 14:
Accounts payable $2000
Cash $2000

May 18:
Sales Equipment $8000
Cash $2000
Accounts payable $6000

May 21:
Merchandise inventory $600
Cash $600

May 27:
Cash $2600
Land $1900
Profit on sale $700

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