Can someone please help with this entry ?

Cash sales for the week totaled $20,000 with a gross profit rate of 38%.
Make a summary journal entry.


I know the entry for the sales, but I am having trouble on what to do
With the 38 %?

Quote:

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Originally Posted by KrystalLea

Can someone please help with this entry ?

Cash sales for the week totaled $20,000 with a gross profit rate of 38%.
Make a summary journal entry.


I know the entry for the sales, but I am having trouble on what to do
with the 38 %?

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I think that this is what you have to do,
record the sale
Dr.Cash... 20,000
Cr.Sales... 20,000
----------------------------------------------------
20,000 x .38= $7,600 this is the profict
20,000 - 7,600= 12,400 this is the cost of the goods sold
then,
Dr.Cost of goods sold... 12,400
Cr.Merchandise Inventory... 12,400
Hope this could help you.