Question

On July 8, Compusoft receives $200,000 from a customer toward a cash sale of $0.90 million for customized computer equipment to be completed on August 1. The remaining $700,000 payment is received upon delivery of the product on August 1. The equipment had a total production cost of $690,000. What journal entries should Compusoft record on July 8 and August 1? Assume Compusoft uses the perpetual inventory system. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions.)

Answer 1

Date Account Title and Explanation Debit Credit

July 8 Cash $200,000

Unearned sales revenue $200,000

(To record unearned sales revenue)

August 1 Cash $700,000

Unearned sales revenue $200,000

Sales revenue $1,000,000

(To record sales revenue)

Cost of goods sold $690,000

Merchandise inventory $690,000

(To record cost of goods sold)