Brad Company buys merchandise on account from Murray Company. The selling price of the goods is…

Brad Company buys merchandise on account from Murray Company. The selling price of the goods is…

Brad Company buys merchandise on account from Murray Company. The selling price
of the goods is $780, and the cost of the goods is $470. Both companies use perpetual inventory
systems. Journalize the transaction on the books of both companies.
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Prepare the journal entries to record the following transactions on Derrick Company’s
books using a perpetual inventory system.
(a) On March 2, Derrick Company sold $900,000 of merchandise to Rose Company, terms 2/10,
n/30. The cost of the merchandise sold was $620,000.
(b) On March 6, Rose Company returned $90,000 of the merchandise purchased on March 2.
The cost of the returned merchandise was $62,000.
(c) On March 12, Derrick Company received the balance due from Rose Company.

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