Q36. Merchandise transactions
Entity A had the following transactions:
(1) May 1, 20×1: Purchased 260 units of merchandise at $10 per unit and paid $2,600 in cash.
(2) May 10, 20×1: Sold 50 units of merchandise at $14 per unit and received $700 in cash.
Prepare journal entries to record these transactions.
A36. Merchandise transactions
(1) May 1, 20×1: to record the purchase of merchandise
| Debit | Credit | |
| Merchandise | 2,600 | |
| Cash | 2,600 |
[Note]
260 units x $10 = $2,600
(2a) May 10, 20×1: to record the sale of merchandise
| Debit | Credit | |
| Cash | 700 | |
| Sales revenue | 700 |
[Note]
Sales revenue = 50 units x $14 = $700
(2b) May 10, 20×1: to record the cost of goods sold
| Debit | Credit | |
| Cost of goods sold | 500 | |
| Merchandise | 500 |
[Note]
Cost of goods sold = 50 units x $10 = $500
[Exercise]
Entity B had the following transactions:
(1) April 1, 20×1: Purchased 300 units of merchandise at $12 per unit and paid $3,600 in cash.
(2) April 6, 20×1: Sold 100 units of merchandise at $15 per unit and received $1,500 in cash.
(1) April 1, 20×1: to record the purchase of merchandise
| Debit | Credit | |
| Merchandise | 3,600 | |
| Cash | 3,600 |
[Note]
300 units x $12 = $3,600
(2a) April 6, 20×1: to record the sale of merchandise
| Debit | Credit | |
| Cash | 1,500 | |
| Sales revenue | 1,500 |
[Note]
Sales revenue = 100 units x $15 = $1,500
(2b) April 6, 20×1: to record the cost of goods sold
| Debit | Credit | |
| Cost of goods sold | 1,200 | |
| Merchandise | 1,200 |
[Note]
Cost of goods sold = 100 units x $12 = $1,200