Question

Co. Sold merchandise inventory for $8,000; received $3,000 in cash and customers owed the rest on account. The inventory cost the company $6,800. Write a journal entry for this event.

Answer 1

The journal entry to record the sale of merchandise inventory includes debits to Cash for $3,000, Accounts Receivable for $5,000, and Cost of Goods Sold for $6,800, with credits to Sales Revenue for $8,000 and Inventory for $6,800.

Step-by-step explanation:

The student is asking for a journal entry to record the sale of merchandise inventory. To record the sale, we must acknowledge both the revenue aspect and the cost of goods sold. The sale was for $8,000, of which $3,000 was received in cash and the remaining $5,000 is on account. Since the inventory cost $6,800, we also need to record the cost of goods sold. Here is the needed journal entry:

• Debit Cash $3,000
• Debit Accounts Receivable $5,000
• Credit Sales Revenue $8,000
• Debit Cost of Goods Sold $6,800
• Credit Inventory $6,800

This entry reflects the inflow of cash and the promise to pay (Accounts Receivable), the recognition of sales revenue, and the matching of the cost of the goods that were sold to the revenue they generated, as per the matching principle in accounting.