Prepare Journal Entries for Sales and Purchases
Rob Corp is a lumber yard on Angel Island.
Apr. 15 Sold lumber on an account to Hard Hat Construction, $500,000. The inventory subsidiary ledger shows the cost of this merchandise was $300,000.
Apr. 19 Purchased lumber on account from LHP Company $100,000.
May 10 Collected in cash the $500,000 accounts receivable from Hard Hat Construction.
May 19 Paid the $100,000 owed to LHP Company.
Dec. 31 Rob Corp personnel counted the inventory on hand and determined its cost to be $120,000. The accounting records, however, indicate inventory of $140,000 and a cost of goods sold of $900,000. The physical count of the inventory was observed by the company's auditors and it is considered correct.
Prepare journal entries to record the above transactions and events in the accounting record of Rob Corp (the company uses a perpetual system).