1. Warner Corporation sold $80,000 of merchandise on credit. The merchandise originally cost $55,000. Warner uses the perpetual method of inventory and records the cost of all sales at the time of the sale. Select ALL debits and credits that would be made to reflect this transaction.
a. Debit Revenue (Ret. Earn) for $80,000
b. Debit Accounts Receivable $80,000
c. Debit Cost of Goods Sold (Ret. Earn) for $80,000
d. Debit Cost of Goods (Ret. Earn) sold for $55,000
e. Credit Revenue (Ret. Earn) for $80,000
f. Credit Inventory for $55,000
g. Credit Proft (Ret. Earn) for $25,000
2. James Corporation sold $80,000 of merchandise for cash. The merchandise originally cost $55,000. Warner uses the perpetual method of inventory and records the cost of all sales at the time of the sale. Select ALL debits and credits that would be made to reflect this transaction.
a. Debit Revenue (Ret. Earn) for $80,000
b. Debit Cash $80,000
c. Debit Cost of Goods Sold (Ret. Earn) for $80,000
d. Debit Cost of Goods Sold (Ret. Earn) for $55,000
e. Credit Revenue (Ret. Earn) for $80,000
f. Credit Inventory for $55,000
g. Credit Proft (Ret. Earn) for $25,000