Question

Morgan Manufacturing recently sold goods that cost $35,000 for $45,000 cash. The journal entries to record this transaction would include:
A. a credit to Work-in-Process Inventory for $35,000.
B. a debit to Sales Revenue for $45,000.
C. a credit to Profit on Sale for $10,000.
D. a debit to Finished-Goods Inventory for $35,000.
E. a credit to Sales Revenue for $45,000.

Answer 1

Answer:

The journal entries to record this transaction would include: E. a credit to Sales Revenue for $45,000.

Explanation:

When Morgan Manufacturing sold goods, the company should make two journal entry to record Cost of goods sold and Sales revenue.

The entries:

1. Debit Cost of goods sold $35,000

Credit Finished-Goods Inventory $35,000

2. Debit Cash $45,000

Credit Sales revenue $45,000

The journal entries to record this transaction would include: E. a credit to Sales Revenue for $45,000.