Grandpa Clocks, Inc

Finance Oct 15, 2020

Grandpa Clocks, Inc. (GCI), is a retailer of wall, mantle, and grandfather clocks. Assume GCI sells a grandfather clock for $13,500 cash plus 4 percent sales tax. The clock had originally cost GCI $9,500. Show the accounting equation effects and prepare the journal entries related to this transaction. Assume GCI uses a perpetual inventory system.
2. Prepare the journal entries related for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
A). Record the sales revenue of $13,500 plus 4 percent sales tax.
B). Record the cost of goods sold of $9,500

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