A company uses a perpetual inventory system. The company began its fiscal year with inventory of $998,000. Purchases of merchandise on account during the year totaled $3,124,089. Merchandise costing $3,456,980 was sold on account for $6,909,879. Prepare the journal entries to record these transactions.

Date  Account Titles and Explanation              Debit            Credit

          Inventory                                                 $3,124,089

                Account payable                                                    $3,124,089

          (To record purchase of merchandise inventory)

            Account receivables                             $6,909,879

                  Sales revenues                                                    $6,909,879

           (To record sales on account)

            Cost of goods sold                                $3,456,980

                  Inventory                                                               $3,456,980

             (To record the cost of sales)

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