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Radomir Company buys merchandise on account from Lemke Company. The selling price of the goods is $1,350, and the cost of the goods is $940. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies

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Answer:

See explanation section.

Explanation:

In the book of Radomir Company

merchandise inventory                      Debit = $1,350

account payable - Lemke Company Credit = $1,350

To record the purchase from Lemke Company on account.

In the book of Lemke Company,

Accounts receivable Radomir Company Debit  $1,350

Sales revenue                                            Credit $1,350

To record the sales on account.

Cost of goods sold Debit         = $940

Merchandise inventory Credit = $940

As the company uses perpetual inventory system therefore, the company will gave cost of goods sold journal.