On July 5, ABC sold $2,800 merchandise and received cash. Its cost
Was $2,000 from Ajax’s invoice.
On July 10, ABC sold $13,400 merchandise on credit to its customer,
Giovanni. Its cost was $8,600.
How do you write these in journal form?
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On July 5, ABC sold $2,800 merchandise and received cash. Its cost
Was $2,000 from Ajax’s invoice.
On July 10, ABC sold $13,400 merchandise on credit to its customer,
Giovanni. Its cost was $8,600.
How do you write these in journal form?
Next time, please post what you think are the answers, then we'll correct it if needed... thanks!
I'm no expert, but here are my thoughts:
I'm not completely sure about the July 5th journal entry because of the part when you say "its cost was $2000 from Ajax's invoice" that threw me off... how would it be from someone else's invoice?
I suppose for the first part of the entry you would debit cash for $2,800 and credit inventory for the same amount.
As far as July 10th :
You would debit inventory for $13,400 and credit accounts payable for the same amount.
Then you would do another journal entry for that date and debit cost of goods sold for $8,600, and credit inventory for that same amount.
laurnenw makes a good point. Next time show YOUR attempt at the work:
July 5.
You sold merchandise for $2,800 for cash which cost you $2,000.
Dr. Cash 2,800
Cr. Revenue 2,800
Dr. COGS 2,000
Cr. Inventory 2,000
July 10.
You sold merchandise for $13,400 on account, which cost you $8,600.
Dr. Accounts Receivable - Giovanni 13,400
Cr. Revenue 13,400
Dr. COGS 8,600
Cr. Inventory 8,600
You would NOT debit inventory. You are selling it, therefore you need to credit it.Quote:
Originally Posted by laurnenw
It should be assumed that this inventory has already been purchases and recorded. You must record the sale and the decrease of it from your stock.
5 JulyQuote:
Originally Posted by jamesfinance
Cash - debit 2800
Sales - credit 2800
10 July
Debtor (Giovanni) - debit 13400
Sales - credit 13400
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