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1. A firm just made a $1,000,000.00 sale to a retail chain. The firm will be...

1. A firm just made a $1,000,000.00 sale to a retail chain. The firm will be 50.00% in cash today, and then pay the remainder in 30 days (a receivable for the firm). The firm fills the sale with $400,000.00 in inventory. Consider how an accountant will handle this transaction.

1a. Revenues will be adjusted by _______________.

1b. Accounts receivable will be adjusted by _______________.

1c. Cash will be adjusted by ______________.

1d. Inventory will be adjusted by ______________.

1e. If COGS is 40% of sales, COGS will be adjusted by _______________.

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Answer #1

A firm just made a $1,000,000.00 sale to a retail chain. The firm will be 50.00% in cash today, and then pay the remainder in 30 days (a receivable for the firm). The firm fills the sale with $400,000.00 in inventory.

Answers :

1a. Revenues will be adjusted by $1,000,000

1b. Accounts receivable will be adjusted by $1,000,000*50% = $500,000.

1c. Cash will be adjusted by $1,000,000*50% = $500,000.

1d. Inventory will be adjusted by $400,000..

1e. If COGS is 40% of sales, COGS will be adjusted by $1,000,000*40% = $400,000.

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