Question

Ch 4 Ex & Prob Saved Help Save & Exit Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion Return to que 1 Exercise 4-4A Recording Inventory transactions in the general Journal and posting entries to T-accounts: Perpetual system LO 4-1 9 points Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $15,000 cash from the issue of common stock. 2. Purchased inventory for $6,900 cash. 3. Sold inventory costing $4,140 for $7,038 cash. 4. Paid $700 for advertising expense. Required a. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts. c. Prepare a trial balance to prove the equality of debits and credits. Answer is not complete Complete this question by entering your answers in the tabs below.

Answer 1

a)Journal entries are as follows:

Date	Account and Explanation	Debit ($)	Credit ($)
1)	Cash	15,000
	Common Stock		15,000
	(Recorded the Common Stock issued)
2)	Merchandise Inventory	6,900
	Cash		6,900
	(Recorded the purchase of merchandise Inventory)
3)	Cash	7,038
	Sales Revenue		7,038
	(Recorded the sales revenue)
	Cost of goods sold	4,140
	Merchandise Inventory		4,140
	(Recorded the cost of goods sold)
4)	Advertising Expenses	700
	Cash		700
	(Recorded the advertising expenses)

B) T accounts are as follows:

                                        Cash

Particular	$	Particular	$
Common Stock	15,000	Merchandise Inventory	6,900
Sales Revenue	7,038	Advertising Expenses	700
		Ending Balance	14,438
Total	$22,038	Total	$22,038
Ending Balance	$14,438

                                                            Common Stock

Particular	$	Particular	$
Ending Balance	15,000	Cash	15,000
Total	$15,000	Total	$15,000
		Ending Balance	15,000

                                                     Merchandise Inventory

Particular	$	Particular	$
Cash	6,900	Cost of goods sold	4,140
		Ending Balance	2,760
Total	$6,900	Total	$6,900
Ending Balance	2,760

                                                        Sales Revenue

Particular	$	Particular	$
Ending Balance	7,038	Cash	7,038
Total	7,038	Total	7,038
		Ending Balance	7,038

                                                        Cost of goods sold

Particular	$	Particular	$
Merchandise Inventory	4,140	Ending Balance	4,140
Total	$4,140	Total	$4,140
Ending Balance	$4,140

                                                   Advertising Expenses

Particular	$	Particular	$
Cash	700	Ending Balance	700
Total	$700	Total	$700
Ending Balance	$ 700

                                             

           Trial Balance is prepared as follows:

	Debit($)	Credit($)
Cash	14,438
Common Stock		15,000
Merchandise Inventory	2,760
Sales Revenue		7,038
Cost of Goods Sold	4,140
Advertising Expenses	700
Total	$22,038	$22,038