Journal Entries for Merchandise Transactions

1. March 1, 2011
Purchased 200 units of merchandise at $10 per unit in cash.

debit credit Merchandise 2,000         Cash   2,000 2. March 5, 2011 Purchased 500 units of merchandise at $10 per unit on credit.

debit credit Merchandise 5,000         Accounts payable   5,000 3. March 10, 2011 Sold 300 units of merchandise at $15 per unit on credit. Journal entry to record sales revenue.

debit credit Accounts receivable 4,500         Sales   4,500 Journal entry to record cost of goods sold.

	debit	credit
Cost of goods sold	3,000
Merchandise		3,000

4. Merchandise in inventory

700 units purchased - 300 units sold = 400 units in inventory
400 units x $10 per unit = $4,000

5. Gross profit
= Sales - Cost of goods sold
= $4,500 - $3,000 = $1,500