XY merchandising has 20 coffee mugs in the beginning inventory at a cost of $5 per coffee mug . on february 1,2012 they purchase 10 coffee mugs on account (Each coffee mug cost $6). On februay 5,2012 they sell coffee mugs for $10 per coffee mug on account. The business uses first in first out. prepare the entry XY merchandising would make to record the sale of february 5,2012.

a) debt: accounts receivable -$150

credit: revenue - $150 debit:

cost of goods sold-$85

credit: inventory -$85

b) debt: accounts receivable - $150

credit: revenue - $150

debt: cost of goods sold - $80

credit: inventory - $80

c) debt: accounts receivable - $150

credit: revenue - $150

debt: cost of goods sold - $75

credit: inventory - $75

d) no entries needed on february 5, 2012