On may 1, shilling company, inc. sold merchandise in the amount of $5,800 to anders, with credit terms of 2/10, n/30. the cost of the items sold is $4,000. shilling uses the gross method of recording sales and a perpetual inventory system. the journal entry or entries that shilling will make on may 1 is:

Explanation:

The journal entries are shown below:

On May 1

Accounts receivable A/c Dr $5,800

       To Sales A/c  $5,800

(Being the sale is recorded)

Cost of goods sold A/c Dr $4,000

       To Merchandise inventory A/c $4,000

(Being the cost of the item sold is recorded)

Only these two entries are recorded under the perpetual inventory system

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