Grey Co. sold $45,000 of inventory for $55,000. The customer paid $13,000 in cash for the...
Grey Co. sold $45,000 of inventory for $55,000. The customer paid $13,000 in cash for the inventory and will pay the remainder in 30 days. The customer plans to sell the inventory for $65,000. Prepare the journal entry for Grey Co. Sales for the period were $50,000. Gross profit margin is 10% of sales. What was the dollar amount of the cost of goods sold?
Homework Answers
Journal
|
Date |
Account Title and Explanation |
Debit |
Credit |
| a | Cash | 13,000 | |
| Accounts receivable | 42,000 | ||
| Sales | 55,000 | ||
| (To record sales) | |||
| b | Cost of goods sold | 45,000 | |
| Inventory | 45,000 | ||
| (To record cost of goods sold) |
Sales = $50,000
Gross profit margin = 10% of sales
= 50,000 x 10%
= $5,000
Cost of goods sold = Sales - Gross profit margin
= 50,000 - 5,000
= $45,000
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