Prepare the journal entries

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Problem - For each of the following transactions or events pertaining to ABC Lid., answer the following questions:

(a) Prepare the journal entry/entries.

(b) Identify the source document(s) that would support recording the journal entry.

Transaction 1: ABC has purchased inventory on credit for $445,000. Assume ABC uses a periodic inventory system.

Transaction 2: ABC has made a sale of goods, on credit, for $100,000. ABC's gross profit on this transaction was 93% of revenue. Assume ABC uses a perpetual inventory system and further assume that revenue should be recognized at the date of sale.

Transaction 3: ABC has received a cheque from a customer in the amount of $71,000 for settlement of a promissory note receivable.

Reference no: EM132655946

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