Question

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Brief Exercise 5-03 Radomir Company buys merchandise on account from Lemke Company. The selling price of the goods is $780, and the cost of the goods is $470. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Debit Credit Account Titles and Explanation Radomir Company Lemke Company (To record credit sale) (To record cost of merchandise sold)

Answer 1

Credit Radomir Company Account Titles and Explanation Merchandise Inventory Accounts Payable Debit $780 $780 Credit Debit $780 $780 Lemke Company Account Titles and Explanation Accounts Receivable Sales Revenue (To record credit sale) Cost of Goods Sold Merchandise Inventory (To record cost of merchandise sold) $470 $470 Litwin Company Account Titles and Explanation Cost of Goods Sold Merchandise Inventory Debit $2,300 Credit ($98,000 - $95,700] $2,300