ABC Inc. is a retail company that sells products to customers using both cash and credit. The
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Question:
ABC Inc. is a retail company that sells products to customers using both cash and credit. The company has the following transactions during the month of February 2023:
- On February 1, ABC Inc. purchased inventory on credit for $10,000 with payment due in 30 days.
- On February 10, ABC Inc. sold inventory on credit for $12,000, which cost the company $8,000.
- On February 15, ABC Inc. received payment from a customer for a credit sale made in January 2023 for $3,000.
- On February 18, ABC Inc. paid $5,000 to a supplier for a purchase made in January 2023 on credit.
- On February 20, ABC Inc. sold inventory for cash for $6,000, which cost the company $4,000.
- On February 25, ABC Inc. paid $10,000 to the supplier for the purchase made on February 1, 2023.
Assuming ABC Inc. uses the perpetual inventory system, prepare the journal entries to record the above transactions and calculate the balance of accounts receivable and accounts payable at the end of February 2023.
Related Book For
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780134486840
6th Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
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