ANALYZING THE ACCOUNTS Casey Company engaged in the following transactions:

a. Made credit sales of $600,000. The cost of the merchandise sold was $410,000

b. Collected accounts receivable in the amount of $580,000

c. Purchased goods on credit in the amount of $425,000

d. Paid accounts payable in the amount of $392,000 Required:

Recreate the journal entries necessary to record the transactions. Indicate whether each transaction increased cash, decreased cash, or had no effect on cash.

Exercise