Q47. Review questions 2
(1) On May 2, 20×1, Entity A purchased 600 units of merchandise at $9 per unit and paid $5,400 in cash.
(2) On May 10, 20×1, Entity A sold 200 units of merchandise at $12 per unit and received $2,400 in cash.
Prepare journal entries to record these transactions.
A47. Cash purchase and cash sale
(1) May 2, 20×1: to record the purchase of merchandise
| Debit | Credit | |
| Merchandise | 5,400 | |
| Cash | 5,400 |
[Note]
600 units x $9 per unit = $5,400
(2) Entity A sold 200 units of merchandise at $12 per unit and received $2,400 in cash.
(2a) May 10, 20×1: to record sales revenue
| Debit | Credit | |
| Cash | 2,400 | |
| Sales revenue | 2,400 |
[Note]
Sales revenue = 200 units x $12 per unit = $2,400
(2b) May 10, 20×1: to record the cost of goods sold
| Debit | Credit | |
| Cost of goods sold | 1,800 | |
| Merchandise | 1,800 |
[Note]
Cost of goods sold = 200 units x $9 per unit = $1,800