Mountain Cycles started August with 12 bicycles that cost $ 42 each. On August 16, Mountain bought 40 bicycles at $ 68 each. On August 31, Mountain sold 36 bicycles for $ 84.

Required

1. Prepare Mountain Cycle’s perpetual inventory record assuming the ­company uses the specific identification inventory costing method. Assume that Mountain sold 8 bicycles that cost $ 42 each and 28 bicycles that cost $ 68 each.

2. Journalize the August 16 purchase of merchandise inventory on account and the August 31 sale of merchandise inventory on account.