During February Gregs Groceries purchased 50000 and sold 540

During February, Greg’s Groceries purchased $50,000 and sold $54,000 of inventory for $75,000. Greg’s Groceries had $10,000 worth of inventory on hand on February 28^th. Complete the T account for Greg’s Inventory. How much Revenue does Greg’s have? _______________ How much expense? ___________________What is their Gross Margin? _____________ How much inventory did Greg’s have on hand on February 1 (beginning of the month)? __________

Write the journal entry to record Greg’s purchases:

Write the journal entry to record Greg’s revenue:

Write the journal entry to record Greg’s expense (COGS):

Solution

1..Journal entry to record Greg’s purchases: Inventory 50000 Cash/Accounts Payable 50000 2..Journal entry to record Greg’s revenue: Cash/Accounts Receivable 75000 Sales Revenue 75000 3.Journal entry to record Greg’s expense (COGS): COGS 54000 Inventory 54000 Inventory a/c Beginning balance(Bal.fig.) 14000 Purchases-Cash/Accounts Payable 50000 COGS 54000 Closing balance 10000 64000 64000 Revenue does Greg’s have (Sales) 75000 Greg\'s expense 54000 Gross margin(75000-54000) 21000 Inventory a/c Beginning balance on Feb 1 14000