On January 1, 2020 Amazon purchased 1,000 Nike sneakers by $100 each, in total for $100,000 on account. By December 15, 2020, Amazon sold 800 sneakers by $130 each, in total for $104,000 cash. Their operating expenses were $18,000. First, record the purchase of inventory on account on January 1, 2020. Date Transaction Account Debit Credit Second, record the sales revenue and cash on December 15. Date Transaction Account Debit Credit Third, record the cost of goods sold and the change in inventory on December 15. Date Transaction Account Debit Credit Calculate gross profit and gross profit rate Gross profit = = Gross profit rate = Calculate net income Net Income =
On January 1, 2020 Amazon purchased 1,000 Nike sneakers by $100 each, in total for $100,000 on account. By December 15, 2020, Amazon sold 800 sneakers by $130 each, in total for $104,000 cash. Their operating expenses were $18,000.
First, record the purchase of inventory on account on January 1, 2020.
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Transaction Account |
Debit |
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Second, record the sales revenue and cash on December 15.
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Date |
Transaction Account |
Debit |
Credit |
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Third, record the cost of goods sold and the change in inventory on December 15.
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Date |
Transaction Account |
Debit |
Credit |
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Calculate gross profit and gross profit rate
Gross profit =
=
Gross profit rate =
Calculate net income
Net Income =
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