Question

On May 1, Shilling Company sold merchandise in the amount of $5,800 to Anders, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Shilling uses the perpetual inventory system and the gross method. The journal entry or entries that Shilling will make on May 1 is:a. Sales 5,800 Accounts receivable 5,800 b. Merchandise Inventory 5,800 Accounts payable 5,800 c. Accounts payable 5,800 Sales 5,800 d. Merchandise Inventory 5,800 Cash 5,800

Answer 1

Answer:

The correct answer is:

Debit: Account receivable $5,800

Credit: Sales revenue $5,800

Debit: Cost of goods sold $4,000

Credit: Merchandise inventory $4,000

Explanation:

On 1st May

Upon sale of inventory on credit

Debit: Account receivable $5,800

Credit: Sales revenue $5,800

On 1st May

To record cost of goods sold of merchandise inventory:

Debit: Cost of goods sold $4,000

Credit: Merchandise inventory $4,000