On May 31,a Company Had a Balance in Its Accounts $\$ 12,000$

question 198

Essay

On May 31,a company had a balance in its accounts receivable of $103,200.Prepare journal entries to record the following transactions for June.Assume the company uses a perpetual inventory system.
June 2 Sold merchandise on account, $\$ 12,000$ . The cost of the merchandise was $\$ 7,200$ .
June 8 Sold $15,000 worth of accounts receivable to First Bark. First Bark charged a 4% factoring fee.
June 20 Barrowed $\$ 30,000$ cash from Second National Bark, pledging $31,500 worth of accounts receivable as collateral for the loan.

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Definitions:

Profit-Maximizing

Refers to the process or strategy aimed at achieving the highest possible profit, where marginal cost equals marginal revenue.

Total Revenue

The total income received by a company or market sector from the sale of goods or services, calculated as the unit price times the quantity sold.

Profit-Maximizing Level

The point at which a firm achieves its highest profit, determined by the level of output where marginal cost equals marginal revenue.

Market Price

The actual selling price of a good or service in the marketplace at which buyers and sellers conduct transactions.