Question

Clemens Cars' job cost sheet for Job A40 shows that the cost to add security features to a car was $15,500. The car was delivered to the customer, who paid $20,200 in cash for the added features. What journal entries should Clemens record for the completion and delivery of Job A40?

Answer 1

Answer:

Cash 20,200 debit

   Sales revenue 20,200

COGS  15,500

   Finished Goods Invenotry 15,500

Explanation:

The revenue will be recognize by the amount billed to the customer. It is paying on cash, so our cash increases. We record that by debiting cash.

And we credit the sales revenue to increase our revenue.

Then we recognize the cost of goods sold, which are 15,500

This decrease our finished goods inventory by this ammount. Also, we post the expense for the cost of the goods sold.