Question

On March 2, Concord Corporation sold $821,000 of merchandise on account to Sarasota Company, terms 2/10, n/30. The cost of the merchandise sold was $613,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

I strongly believe that the question requires the necessary journal entries to record the sale of the merchandise as well as the cost of the merchandise.

For the sales value the journal entries are:

Dr Accounts receivable $821,000

Cr Sales revenue $821,000

Being sale of merchandise on account

For the cost of goods sold:

Dr Cost of goods sold $613000

Cr Inventory $613,000

Being of cost of merchandise transferred to costs of good sold

Step-by-step explanation:

The cash discount offered of 2% cannot be recorded until the payment is received within the discount period.

There is also the need to move inventory from inventory account to cost of goods sold