Cullumber Company buys merchandise on account from Oriole Company. The selling p

Question

Cullumber Company buys merchandise on account from Oriole Company. The selling price of the goods is $ 975 and the cost of the goods sold is $ 610. Both companies use perpetual inventory systems.

Journalize the transactions on the books of both companies. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

(To record sale of merchandise)

Account Titles and Explanation

Debit

Credit

Cullumber Company Oriole Company

(To record sale of merchandise)

Explanation / Answer

Answer:

In the book of Cullumber Company

Account Titles and Explanation

Debit $

Credit $

Merchandie Inventory

975

Accounts payable

975

( to record the purchase)

__________________________________________-

On the book of Oriole Company

Account Titles and Explanation

Debit $

Credit $

Accounts recivable

975

Sales

975

( to record the sales)

Cost of goods sold

610

Merchandie Inventory

610

( to record the cost of goods sold)

Account Titles and Explanation

Debit $

Credit $

Merchandie Inventory

975

Accounts payable

975

( to record the purchase)

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