Q1) Create the journal entries essential to record following eight transactions.
1. Purchased inventory on account for $130,000.
2. Sold goods for $100,000 cash. Goods originally cost $65,000.
3. Paid $27,000 cash for employee wages.
4. Paid $12,500 cash for advertising.
5. Sold goods for $25,000 cash and $60,000 on account (a total of $85,000). Goods originally cost $57,000.
6. Collected cash of $47,000 from the $60,000 receivable on account; the remaining $13,000 is expected to be collected later.
7. Paid cash of $55,000 on the $130,000 payable on account; remaining $75,000 is expected to be paid later.
8. Paid cash dividends of $8,500.