Accounts Receivable started off with a balance of $1000 Inventory started off with a balance of...

Accounts Receivable started off with a balance of $1000

Inventory started off with a balance of $1800

Smith Foods sub ledger started off with a balance of 50.

Sold $500 to Smith Foods our cost 375

Sold $700 to Smith Foods our cost 525

Received payment from Smith Foods of $1200

Sold to $1000 to Smith Foods our cost 750

What is the ending balance of the inventory account, accounts receivable account and what is our Gross Profit? Show your work. (T accounts)

Expert Solution

Particulars	AR	Inventory	Smith foods	Gross profit
Balances	1,000	1,800	50
Sales	500	(375)	500	125
Sales	700	(525)	700	175
Receipt	(1,200)		(1,200)
Sales	1,000	(750)	1,000	250

Ending balance	2,000	150	1,050	550

Accounts receivable
Particulars	Debit	Particulars	Credit
Opening balance	1,000	Cash	1,200
Sales	500
Sales	700
Sales	1,000
		Ending balance	2,000


Inventory
Particulars	Debit	Particulars	Credit
Opening balance	1,800	Cost of goods sold	375
		Cost of goods sold	525
		Cost of goods sold	750
Ending balance	150

ekkarill92 answered 2 years ago

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