Question

The Adam Company uses the perpetual inventory system to record its merchandising transactions. At the beginning of 2019 the company had the following selected account balances:

                                                Debit                      Credit

Merchandise inventory $1,000,000

Cost of goods sold              200,000

Sales                                                                      2,000,000

Accounts receivable           800,000

Prepare journal entries for the following transactions that the Company completed during January:

	Account	Debit	Credit
Jan 6	Collected the 800,000 account receivable balance with terms 2/10 net 30 within the discount period.
Jan 7	Paid within the discount period 60% of the merchandise that was purchased for 1,000,000 with credit terms 2/10 net 30
Jan 8	Sold for 2,000,000 to Aisha Company 4/10 net 30 with cost 500,000
Jan 9	Paid within the discount period 40% of the merchandise that was purchased for 1,000,000 with credit terms 2/10 net 30
Jan 12	Collected 65% of the sale to Aisha Company terms 4/10 net 30
Jan 17	Collected the remaining 35% of the sale to Aisha Company terms 4/10 net 30

Answer 1