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26 August, 05:26

Sheffield Company buys merchandise on account from Cheyenne Corp ... The selling price of the goods is $850, and the cost of the goods is $500. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies. (Credit account titles are automatically indented when 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.)

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  1. 26 August, 07:46
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    See the explanation below

    Explanation:

    In Sheffield Company books:

    Details Dr ($) Cr ($)

    Merchandise Inventory 850

    Accounts Payable 850

    To record purchase of merchandise inventory on account.

    In the book of Cheyenne Corp.

    Details Dr ($) Cr ($)

    Accounts Receivable 850

    Sales 850

    To record the sale of merchandise inventory on account.

    Cost of Goods Sold 500

    Merchandise Inventory 500

    To record the cost of merchandise inventory sold on account.
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