Assume that a company purchases merchandise for resale on December 20, 2014. The merchandise is still on hand on December 31, the company’s year-end. On January 12, 2015, the merchandise is sold to a...

Assume that a company purchases merchandise for resale on December 20, 2014. The merchandise is still on hand on December 31, the company’s year-end. On January 12, 2015, the merchandise is sold to a customer. Explain how the merchandise will be treated on any of the financial statements at year-end. In which year will revenue from the sale be recorded? In which year will cost of goods sold expense be recorded?