The Only Shirt Wholesalers spent $13,000 to purchase 1,000 shirts from a shirt manufacturer as inventory. Worn Star Shirt Retailers paid $18,000 for the 1,000 shirts from The Only Shirt Wholesalers on June 16, 2018. Payment is due in one month. Both companies use the perpetual inventory system.

Do not enter dollar signs or commas in the input boxes.

Required

a) Prepare the journal entry for Worn Star Shirt Retailers on June 16.

Date	Account Title and Explanation	Debit	Credit
2018
Jun 16	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseCashCost of Goods SoldEquipmentInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueMerchandise InventoryPrepaid InsurancePrepaid RentPrepaid ServicesRent ExpenseSales Revenue	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseCashCost of Goods SoldEquipmentInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueMerchandise InventoryPrepaid InsurancePrepaid RentPrepaid ServicesRent ExpenseSales Revenue		Answer
	Purchased inventory

b) Prepare the journal entries for The Only Shirt Wholesalers on June 16. Record the revenue transaction first.

Date	Account Title and Explanation	Debit	Credit
2018
Jun 16	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseCashCost of Goods SoldEquipmentInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueMerchandise InventoryPrepaid InsurancePrepaid RentPrepaid ServicesRent ExpenseSales Revenue	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseCashCost of Goods SoldEquipmentInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueMerchandise InventoryPrepaid InsurancePrepaid RentPrepaid ServicesRent ExpenseSales Revenue		Answer
	Sold inventory on account
Jun 16	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseCashCost of Goods SoldEquipmentInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueMerchandise InventoryPrepaid InsurancePrepaid RentPrepaid ServicesRent ExpenseSales Revenue	Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseCashCost of Goods SoldEquipmentInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueMerchandise InventoryPrepaid InsurancePrepaid RentPrepaid ServicesRent ExpenseSales Revenue		Answer
	COGS for the sale