This year, the store has begun to carry the Flat TV manufactured by Bass Co. Thu

Question

This year, the store has begun to carry the Flat TV manufactured by Bass Co. Thus far, Washington has recorded the following transactions involving the Flat TV:Jan. 5 Purchased 8 Flat TVs at a unit cost of $1,400Jan. 18 Purchased 5 additional Flat TVs at $1,400 eachFeb. 12 Sold 9 Flat TVs to the Duke Hotel for $15,300Refer to the information above. The gross profit on the Flat TVs as of February 12th is:

A) $15,300.

B) $11,200.

C) $2,700.

D) $4,100.

Refer to the information above. If Washington uses a perpetual inventory system, the journal entry to record the sale on February 12th would include all of the following except:

A) A credit to Inventory for $15,300.

B) A credit to Sales Revenue for $18,200.

C) A credit to Purchases for $15,300.

D) A debit to the Cost of Goods Sold for $15,300.

Explanation / Answer

1) C$2,700.

2) If they were sold for $15,300 the entry would be:

DR Accounts Receivable $15,300
DR Cost of Sales $12,600
CR Sales $15,300
CR Inventory $12,600

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