Question

On August 24, Rag Doll Inc. purchased inventory on account from Lavish Lizards Inc. The selling...

On August 24, Rag Doll Inc. purchased inventory on account from Lavish Lizards Inc. The selling price of the goods is $29,200 and the cost of goods sold is $13,320. Both companies use perpetual inventory systems. Record the above transactions on the books of both companies. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Rag Doll Inc. (Buyer):

Date

Account Titles and Explanation

Debit

Credit

Aug. 24

enter an account title to record purchase of merchandise on account on August 24

enter a debit amount

enter a credit amount

enter an account title to record purchase of merchandise on account on August 24

enter a debit amount

enter a credit amount

(Purchase of merchandise on account)



Lavish Lizards Inc. (Seller):

Date

Account Titles and Explanation

Debit

Credit

Aug. 24

enter an account title to record sale of merchandise on August 24

enter a debit amount

enter a credit amount

enter an account title to record sale of merchandise on August 24

enter a debit amount

enter a credit amount

(Sale of merchandise)

24

enter an account title to record cost of goods sold recorded on August 24

enter a debit amount

enter a credit amount

enter an account title to record cost of goods sold recorded on August 24

enter a debit amount

enter a credit amount

(Cost of goods sold recorded)

Homework Answers

Answer #1


Rag Doll Inc. (Buyer):

Date

Account Titles and Explanation

Debit

Credit

Aug. 24

Merchandise inventory 29200
Account payable 29200
(Purchase of merchandise on account)



Lavish Lizards Inc. (Seller):

Date

Account Titles and Explanation

Debit

Credit

Aug. 24

Account receivable 29200
Sales revenue 29200
(Sale of merchandise)

24

Cost of goods sold 13320
Merchandise inventory 13320
(Cost of goods sold recorded)
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