Washington Warehouse is a small retail business that specializes in the sale of
ID: 2496927 • Letter: W
Question
Washington Warehouse is a small retail business that specializes in the sale of top-of-the-line televisions. 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 $1,400 Jan. 18 Purchased 5 additional Flat TVs at $1,400 each Feb. 12 Sold 9 Flat TVs to the Duke Hotel for $15,300 Refer to the information above. If Washington uses a perpetual inventory system, the journal entry to record the purchase on January 18th would include which of the following? A. A debit to the Purchases account for $38,250. B. A debit to the Cost of Goods Sold for $38,250. C. A credit to Inventory for $38,250. D. A debit to Inventory for $38,250.
Explanation / Answer
Answer:
The purchases on 18th will be: A debit to inventory for 7000 (1400 price per unit *5 units purchased)
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