# Merchandise transactions

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