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17 April, 01:52

Radomir Company buys merchandise on account from Lemke Company. The selling price of the goods is $1,350, and the cost of the goods is $940. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies

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  1. 17 April, 04:05
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    See explanation section.

    Explanation:

    In the book of Radomir Company

    merchandise inventory Debit = $1,350

    account payable - Lemke Company Credit = $1,350

    To record the purchase from Lemke Company on account.

    In the book of Lemke Company,

    Accounts receivable Radomir Company Debit $1,350

    Sales revenue Credit $1,350

    To record the sales on account.

    Cost of goods sold Debit = $940

    Merchandise inventory Credit = $940

    As the company uses perpetual inventory system therefore, the company will gave cost of goods sold journal.
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