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1Companies make a month-end adjustment for expected returns by decreasing Sales Revenue and decreasing Cost...

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Accounting

1Companies make a month-end adjustment for expected returns by decreasing Sales Revenue and decreasing Cost of Goods Sold.

Mitchell uses a perpetual inventory system. Mitchell sells a computer from inventory for $1,198 on credit. Mitchell originally bought the computer from IBM for $790. What journal entry (entries) will Mitchell prepare to record the sale? Multiple Choice Debit Cash and credit Sales Revenue for $1,198; debit Cost of Goods Sold and credit Inventory for $790. Debit Accounts Receivable for $1,198, credit Inventory for $790, and credit Gross Profit for $408. Debit Accounts Receivable and credit Sales Revenue for $1,198; debit Cost of Goods Sold and credit Inventory for $790. Debit Inventory for $790, debit Cost of Goods Sold for $408, and credit Accounts Receivable for $1,198.

3 Neakanie Industries sells specialized mountain bikes. Each specialized bike purchased includes free maintenance service for 12 months. The price of the specialized bike is $1,000. When sold separately, a maintenance contract is $200 and a comparable but non-specialized bike is $600. What amount of revenue will Neakanie recognize at the date of sale for each bike?

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