The Marchetti Soup Company entered into the following transactions during the mo

Question

The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $200,000 (assume Marchetti uses a perpetual inventory system); (2) paid $51,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $142,000 to credit customers for $255,000; (4) collected $235,000 in cash from credit customers; and (5) paid suppliers of inventory $180,000. Prepare journal entries for each of the above transactions.

Explanation / Answer

journal Entries No Accounting titles & Explanations Debit Credit 1) Merchandise inventory 200,000 Accounts payable 200,000 2) Salary expense 51,000 cash 51,000 3) Accounts receivable 255,000 sales revenue 255,000 cost of goods sold 142,000 Merchandise inventory 142,000 4) Cash 235,000 Account receivable 235,000 5) Accounts payable 180,000 cash 180,000

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