6 Merchandise Inventory: Recording Example 1 Lothridge Wholesale Beverage Company (LWBC) begins 2013 with $120,000 in inventory. During the period it purchases on account $600,000 of merchandise for resale to customers. During 2013, LWBC sold, on account, inventory with a retail price of $820,000 and a cost basis of $540,000, to customers. Lothridge applies perpetualrecording system. Complete journal entries for inventory purchase and sales, and adjusting entry if necessary.