Im doing a project and right now I am recording journal entries/T accounts. I have the following statement I need to record for a PERIODIC INVENTORY (not perpetual) system.

"Week 1 sales were $6000. Of this amount $3000 was in cash, the remainder on credit. The cost of the surfboards sold was $2000"

How do I record "The cost of the surfboards sold was $2000?

Before all of this, "the company received a delivery of surfboards worth $11,000. This was purchased on credit."

So I went ahead and record the week 1 sales, with:

dr. Cash
cr. Sales reveune
dr. Accounts Receivable
cr. Sales revenue

and the surfboards purchase was recorded as:
dr. Surfboard Purchase
cr. Accounts payable

Someone said the "cost of surfboards sold $2000" is also "COGS" (raw/original price of surfboards from manufac.)

So I would:
dr. Sales Revenue
cr. Cost of Goods Sold

Does this look right?


And the last part:

"performed inventory of supplies at the end of June. It shows that there is $500 worth of supplies left on hand at the end of the month."

Am I doing closing entries here?



"Wages for the last 15 days of June will be paid on July 8."
For previous wages I did:

dr. Wage Expense
cr. Wages payable

Do I do the same because I am only recording the month of June.


Let me know !

 

yes, i think you are right

 

I hope so!

Other feedback to verify would be great! I sent an email to siblings to see what they say too.

 

Normally there will be an inventory line but I am assuming all was sold? You can still add the line.

When you bought it from vendor, the surfboard becomes asset as inventory. Then when you sell them, you take it off from inventory and add cost of goods sold

 

RE: - your first question - You have to have a COGS entry:

It should be

DR - COGS ($2,000)
CR Inventory ($2,000)

You don't hit sales revenue again.

The intitial surfboard purchase should be recorded as
DR Inventory
CR Accounts Payable.

RE: the supplies left at the end of the month - I am not sure how the problem reads but your supplies inventory must equal that 500 at the end of the month. If it is over/under you would have to make an adjustment to inventory. If the problem is silent on that, then it might just be in there to throw you off. If you have to make an adjustment to inventory the offset would typically be a COGS account.

RE: The wages accrual. You must have 15 days worth of wages payable accrued at the end of the month. Your entry however is correct:

DR Wage Expense
CR Wages Payable or Accrued Wages

Then in the following month when you pay that amount you will Credit Cash and Debit wages Payable.

Does that make sense?

 

+1 to above

Adjusting entry is a credit to Inventory 8,500 and probably CoGS debit of 8500 but I'd have to read the whole problem to tell you for sure paraphrasing it isn't helping here.

PS why are you asking for help with your accounting home work on a motorcycle forum?

Also I'm graduating in 6 days with my Accounting degree if you want some assurance my advice is good.

 

There is no adjusting entry to COGS for 8500 dollars I am not sure where you are getting that from.

They sold 6k worth of surfboards. 2k of it was COGS.

The ONLY entries we can gleam from what he has above are:

Surfboard Purchase:
DR Inventory - 11,000
CR A/P - 11,000

Cash Sale:
DR Cash - 3000
CR Sales - 3000

Credit Sale
DR A/R - 3,000
CR Sales - 3,000

COGS Entry

DR COGS - 2,000
CR Inventory - 2,000

Supplies Entry - Not enough data from what he has shown to determine if there is any entry needed.

Wages Accrual:

DR Wage Expense (15 Days of Pay)
CR Wage Accrual/Payable (15 Days of Pay)

 

Since it is beginning of the month, and I have to input GL into quickbook, here is what my cash register program produces.

Cash/credit card payment received (asset account) DB
Amount of sale (income account) CR
Inventory cost of goods (asset account:taking out the inventory amount you sold from asset) CR
Cost of Goods ( cost of sale account) DB
Purchase (liability account) CR
Inventory (asset account: adding purchase) DB

 

Its OFF TOPIC - you can post up about anything in here. Clearly not all Off Topic posts are about motorcycles...
Hope you didn't pay too much for that college degree.



And Shok - when in doubt. Just pick B! That got me through college haha

 

LoL i realize its offtopic, I was just curious as to why he asked on here. Not ripping on him at all. I actually enjoyed helping him. Just seems an odd forum to post for help on.