The Lothridge Wholesale Beverage Company purchases soft drinks from producers and then sells them to retailers. The company begins 2021 with merchandise inventory of $120,000 on hand. During 2021 additional merchandise is purchased on account at a cost of $600,000. Sales for the year, all on account, totaled $820,000. The cost of the soft drinks sold is $540,000. 1. Assuming that the company uses a perpetual inventory system and that the system indicates that the cost of inventory on hand at the end of the year is $180,000. Prepare the following journal entries. Journal entry for purchase of inventory on account: Journal entry to record sales: Chanter \& P1