Journalize the Following Transactions for Mercado Company for June 2014

question 19

Essay

Journalize the following transactions for Mercado Company for June 2014, the company's first month of operations. You may omit explanations for the transactions.
1. Purchased equipment on account for $6,000.
2. Billed customers $5,000 for services performed.
3. Made payment of $1,500 on account for equipment purchased earlier in month.
4. Collected $2,400 on customer accounts.

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Definitions:

Manufacturing Costs

These are expenses directly related to the production of goods, including labor, materials, and overhead.

Selling

The process of promoting and transferring goods or services to a buyer in exchange for money.

Contribution Margin Ratio

The percentage of each dollar of sales that is available to apply to fixed costs and contribute to net income; calculated as unit contribution margin divided by unit selling price.

Unit Contribution Margin

The amount of revenue remaining per unit after deducting variable costs; calculated as unit selling price minus unit variable costs.