Wildlife Wholesale Supply sold birdseed to a retailer for $860,receiving cash at the time of sale.The cost of the birdseed was $370.When recording the collection from the customer,in its cash receipts journal,Wildlife would enter:

Question

Quizplus · Accepted Answer

- The cash received from the customer is entered in the cash receipt journal as a debit in the Cash column for $860.
- Since the company made a sale, it should also record the transaction in the Sales column for $860. The corresponding credit entry is made in the Sales column.
- The cost of goods sold (COGS) is recorded in the Cost of Goods Sold/Inventory column as a debit for $370. This is to account for the expense incurred by the company to produce the birdseed that they sold.
- The corresponding credit entry for the COGS is made in the Inventory column. However, since the problem does not specify that the company is using perpetual inventory system, we do not need to make an entry in the Inventory column.

Wildlife Wholesale Supply Sold Birdseed to a Retailer for $860,receiving