Question

BetterBuy uses a perpetual inventory system. BetterBuy sells a computer from inventory for $599 on credit. BetterBuy originally bought the computer from IBM for $395. What journal entry (entries) will BetterBuy prepare to record the sale

Answer 1

Answer:

1. Accounts receivable Dr.  $599

      To credit sales                $599

2. Cost of goods sold  Dr.     $395

      To credit inventory         $395

Explanation:

Below is the journal entries:

Accounts receivable Dr.  $599

  To credit sales                $599

Now the second journal entry.

Cost of goods sold  Dr.     $395

  To credit inventory         $395

The above journal entries are the sale of a commodity (computer) on credit and the second entry shows the original price of the computer.