Question

1. Journalize the following transactions assuming the perpetual inventory system. (10 points)

Oct 3	Sold merchandise on account for $5,750 including terms.	The cost of the merchandise sold was $2,500.
Oct 17	Sold merchandise for $7,000 plus 5% sales tax to Cash customers.	The cost of the merchandise sold was $2,830.

Date	Description	Debit	Credit

EDIT: Think I got it

Date	Description	Debit	Credit
Oct 3	Accounts Receivable	$5750.00
	Sales Revenue		$5750.00
	Cost of Goods Sold	$2500.00
	Merchandise Inventory		$2500.00
Oct 17	Cash	$7350.00
	Sales Tax Payable		$350.00
	Sales Revenue		$7000.00
	Cost of Good Sold	$2830.00
	Merchandise Inventory		$2830.00

Answer 1

Answer

• When using PERPETUAL METHOD and recording sales, following points will have to be considered:
  >Sales will be recorded as under Periodic Method.
  >Each sales transaction recording must include or follow the recording of ‘Cost of Goods Sold’ by debiting Cost of Goods Sold account and crediting Inventory account.
• You have correctly followed both the aspects.

Date	Description	Debit	Credit
Oct 3	Accounts Receivable	$5750.00
	Sales Revenue		$5750.00
	Cost of Goods Sold	$2500.00
	Merchandise Inventory		$2500.00
Oct 17	Cash [as cash was received]	$7350.00
	Sales Tax Payable [$7000 x 5%]		$350.00
	Sales Revenue		$7000.00
	Cost of Good Sold	$2830.00
	Merchandise Inventory		$2830.00