Using perpetual inventory system a merchandising company wil

Using perpetual inventory system, a merchandising company will record 2 journal entries when a sale is made. The first entry is to record the (i) “revenue” and the second entry is to record the (ii) “expense”. Write/Complete the journal entries for the following:

Dave’s Doors sold $40,000 of its premium made doors for $82,000 to a department store chain on account. Using the information provided, how much Revenue does Dave’s have? ____________ How much expense does Dave’s have? _____________ What is this expense called on the income statement?__________________ Complete the 2 journal entries below to record Dave’s Revenue and expense.

                                                                        (ii)

dr. Accounts Receivable      _______________         dr. COGS      ________________

cr. Sales Revenue          ______________              cr. Inventory      ____________

On April 18^th, Bill’s Bakery sold $2,000 worth of bread loafs to a local grocery store for $2,400 on account. Write the two journal entries to record the revenue and expense for Bill’s.

Shelly’s Shampoo collected $800 in cash for hair products it originally paid $540 for. The transaction took place on November 28^th. Write the two journal entries to record the revenue and expense for Shelly’s.

Greg’s Groceries had cash sales in the amount of $36,000. Greg’s cost of the items sold was $28,000. Write the two journal entries to record the revenue and expense for Greg’s.

Solution

1)Revenue is 82000 and expense is 40000. Expense called on income statement is 40000
Account receivable(db) 82000
Sales revenue(cr) 82000

COGS(db)40000
Inventory(cr) 40000

2)Account receivable(db) 2400
Sales revenue(cr) 2400

COGS(db) 2000
Inventory(cr) 2000

3)cash(db) 800
Sales revenue(cr) 800

COGS(db) 540
Inventory(cr) 540

4)cash(db) 36000
Sales revenue(cr) 36000

COGS(db) 28000
Inventory(cr) 28000