On July 8, Compusoft receives $350,000 from a customer toward a cash sale of $1.

Question

On July 8, Compusoft receives $350,000 from a customer toward a cash sale of $1.00 million for customized computer equipment to be completed on August 1. The remaining $650,000 payment is received upon delivery of the product on August 1. The equipment had a total production cost of $670,000. What journal entries should Compusoft record on July 8 and August 1? Assume Compusoft uses the perpetual inventory system. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars, not in millions.)

Explanation / Answer

Solution.

Date Genral Journal Debit Credit 8-Jul Cash            350,000.00 Unearned Revenue          350,000.00 1-Aug Cash            650,000.00 Unearned Revenue          650,000.00 1-Aug Cost of Goods Sold            670,000.00 Merchandise Inventory          670,000.00

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