Let's say your customer purchases a table for $500 with cash. There's a 5% sales tax rate, meaning you receive $25 in sales tax ($500 X 0.05). The customer's total bill is $525.

The table cost you $400. To reflect this, debit your COGS account $400. And, credit your Inventory account $400.

Date	Account	Notes	Debit	Credit
xxx/xxx	Cash		525
	Sales Tax Payable			25
	Revenue			500
	COGS		400
	Inventory			400

Please explain COGS and Inventory part $400