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22 September, 23:43

Mead Company uses a perpetual inventory system and engaged in the following transactions during the month of May: Date Transaction May 1 Made cash sales of $6,300; the cost of the inventory was $3,700. 5 Purchased $2,000 of inventory on credit. 9 Made credit sales of $3,300; the cost of the inventory sold was $1,900. 13 Paid sales salaries of $900 and office salaries of $600. 14 Paid for the May 5 purchases. 18 Purchased sales equipment costing $8,000; made a down payment of $2,000 and agreed to pay the balance in 60 days. 21 Purchased $600 of inventory for cash.

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  1. 23 September, 00:25
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    The journal entries are shown below:

    May 1

    Cash A/c Dr $6,300

    To Sales revenue A/c $6,300

    (Being the cash sales is recorded)

    May 1

    Cost of goods sold A/c Dr $3,700

    To Merchandise inventory A/c $3,700

    (Being the cost of the inventory is recorded)

    May 5

    Merchandise inventory A/c Dr $2,000

    To Account payable A/c $2,000

    (Being the merchandise on account is recorded)

    May 9

    Account receivable A/c Dr $3,300

    To Sales revenue $3,300

    (Being the goods are sold on credit)

    May 9

    Cost of goods sold A/c Dr $1,900

    To Merchandise inventory A/c $1,900

    (Being the merchandise of inventory is recorded)

    May 13

    Sales salaries expense A/c Dr $900

    Office salaries expense A/c Dr $600

    To Cash A/c $1,500

    (Being the expenses are recorded)

    May 14

    Account payable A/c Dr $2,000

    To Cash A/c $2,000

    (Being the amount is paid)

    May 18

    Equipment A/c Dr $8,000

    To Cash A/c $2,000

    To Account payable A/c $6,000

    (Being equipment is purchased on account and on cash is recorded)

    May 21

    Inventory A/c Dr $600

    To Cash A/c $600

    (Being the purchase of inventory is recorded for cash)

    May 26

    Cash A/c Dr $2,600

    To Land A/c $1,900

    To Gain on sale of land A/c $700

    (Being the land is sold)
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