Cottonwood received an order from the Del Norte County Rodeo in Trinity, CA for

Question

Cottonwood   received an order from the Del Norte County Rodeo in Trinity, CA for $18,000   of resale merchandise.  This is a new   rodeo with no credit history.  Cottonwood   has requested payment in full prior to the delivery of goods.  The cost of the goods ordered is   $10,440.   

Cottonwood   received an order from the Del Norte County Rodeo in Trinity, CA for $18,000   of resale merchandise.  This is a new   rodeo with no credit history.  Cottonwood   has requested payment in full prior to the delivery of goods.  The cost of the goods ordered is   $10,440.   

Explanation / Answer

Hi,

Please find the journal entry as follows:

For Sales:

Cash Dr. 18000

Unearned Sales Revenue Cr. 18000

For Booking to Inventory

Cost of Goods Sold Dr. 10440

Merchandise Inventory 10440

Thanks.

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