Turnadot & Sons is a small wholesaler of decorative cast iron objects. The following events, related to a special customer order, occur as described below;August 5, 2015: Turnadot receives the special order for 200 outdoor planters at a selling price of $50 each, including delivery at a future convenient time and location. The customer, with whom Turnadot has had a long-term, trouble-free relationship, pays $3,000 as a deposit and agrees to pay the rest on delivery. Turnadot immediately orders $4,000 worth of planters from its supplier and pays a $1,000 deposit for them.;August 27, 2015: Turnadot pays $3,000 balance due to the supplier upon delivery of the planters to its warehouse.;September 5, 2015: The customer calls for delivery of the planters, and pays the balance of $7,000 when they arrive at the customer site.;On August 27, 2015, upon delivery of planters to Turnadot's warehouse and payment of $3,000 balance due to the supplier, which one of the following journal entries best reflects the economic impact of the transaction?;Debit inventory $3,000, credit cash $3,000;Debit inventory $4,000, credit the current asset 'advances to suppliers' $1,000, credit cash $3,000;Debit cost of goods sold $4,000, credit cash $3,000, credit accounts payable $1,000;Debit inventory $4,000, credit revenues $4,000;It is #2 correct?
Paper#21696 | Written in 18-Jul-2015Price : $27