Journal Entry Review Questions 2



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

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