Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
214. Merchandise with a list price of $4,700 is purchased on account, terms FOB shipping point, 1/10,
n/30. The seller prepaid freight costs of $100. Prior to payment, $1,400 of the merchandise is returned. The
correct amount is paid within the discount period.
Record the foregoing transactions of the buyer in the sequence indicated below, assuming a perpetual inventory
system is used.
(a)
Purchased the merchandise.
(b)
Recorded receipt of the credit memo for merchandise returned.
(c)
Paid the amount owed.
215. Details of invoices for purchases of merchandise are as follows:
Returns and
Merchandise
Freight
Terms
Allowances
(a)
$2,800
$45
FOB shipping point, 1/10, n/30
$200
(b)
7,600
---
FOB destination, n/30
800
(c)
1,400
55
FOB shipping point, 2/10, n/30
600
(d)
500
---
FOB destination, 1/10, n/30
Determine the amount to be paid in full settlement of each of the invoices, assuming that credit for returns and allowances was received prior to
payment and that all invoices were paid within the discount period.
216. Journalize the entries to record the following selected transactions:
(a)
Sold $900 of merchandise on account, subject to 7% sales tax. The cost of the merchandise sold was $510.
(b)
Paid $436 to the state sales tax department for taxes collected.
217. Using the letter preceding each account, arrange the following selected accounts in the order they would
normally appear in a chart of accounts of a company that uses a multiple-step income statement.
(a)
Accounts Payable
(b)
Accounts Receivable
(c)
Merchandise Inventory
(d)
Miscellaneous Selling Expense
(e)
Sales Discounts
(f)
Interest Expense
(g)
Income Summary
(h)
Misc. Admin. Expense
(i)
Freight Out
(j)
Sales Returns and Allowances
218. Gadget Palace is a retailer selling unique hardware. Gadget Palace uses perpetual inventory. Use a General
Journal to journalize the following four transactions during the month of August:
(a)
On July 5th, Gadget Palace purchases inventory for sale from Turbo Tools for $11,400.00 with terms 2/10, n/30.
(b)
On July 6th, Gadget Palace pays Fast Truck Transport $75 for freight-in on the July 5th order.
(c)
Gadget Palace gets a credit memo from Turbo Tools for $215.00 for damaged merchandise on July 8th.
(d)
On July 15th, Gadget Palace pays Turbo Tools the balance due.
Ge
neral Journal
Date:
Account Title
Debit:
Credit:
219. Marshall Supplies is a janitorial supply store. Marshall Supplies uses perpetual inventory. Use a General
Journal to journalize the following four transactions during the month of July:
(a)
On July 4th, Marshall purchases inventory for sale from Tidy Wholesalers for $8,500.00 with terms 1/10, n/30.
(b)
On July 5th, Marshall pays Express Transfer $45 for freight-in on the July 4th order.
(c)
On July 12th, Marshall buys an additional $11,985 in inventory from Tidy Wholesalers with terms 1/10, n/30.
(d)
On July 22nd, Marshall pays Tidy Wholesalers the balance due.
Ge
neral Journal
Date:
Account Title
Debit:
Credit:
220. Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies. Bargain Wholesalers uses
perpetual inventory. Use a General Journal to journalize the following three transactions during the month of
May:
(a)
On May 4th, Bargain Wholesalers sells inventory to Pet World Supplies for $8,250.00 with terms 1/10, n/30. The cost of the
merchandise is $5,755.00.
(b)
On May 13th, Bargain Wholesalers sells an additional $10,985 in inventory to Pet World Supplies with terms 1/10, n/30. The
cost of the merchandise is $6,925.00.
(c)
On May 23rd, Bargain Wholesalers receives a check from Pet World Supplies paying the balance due.
Ge
neral Journal
GJ Page 85
Date:
Account Title
Post
Ref:
Debit:
Credit:
221. On March 3rd, Blowout Sales makes $3,450.00 in cash sales of general merchandise which have a cost of
$1,215.00. Blowout uses a perpetual inventory system.
(a) Journalize the sale event.
(b) Journal the cost of merchandise sold.
222. On March 5th, Blowout Sales makes $22,500.00 in sales on the company’s own credit cards. The cost of
merchandise sold are $16,825.00. Journalize the sales and recognition of the cost of merchandise sold.
223. On March 15th Monroe Sales sells $9,525.00 on account to Garrison Brewer with terms of 2/10, n/30. The
cost of merchandise sold was $6,905.00.
(a) Journalize the sale and the recognition of the cost of the sale.
(b) On March 20th a $125.00 credit memo is given to Garrison Brewer due to merchandise that was the wrong
color. Journalize this event. The cost of the returned merchandise was $65.
(c) On March 25th Garrison Brewer submits payment in full. Journalize this event.
224. Journalize the following transactions assuming the perpetual inventory system:
July 3
Sold merchandise on account $3,750. The cost of the merchandise sold was $2,000.
July 5
Issued credit memo for $1,050 for merchandise returned from sale on July 3rd.
The cost of the merchandise returned was $610.
July 12
Received check for the amount due for sale on July 3rd less return on July 5th.
July 17
Sold merchandise for $7,000 plus 6% sales tax to cash customers. The cost of the merchandise sold was $3,830.
Journal
Date
Description
Post Ref
Debit
Credit
225. Journalize the following transactions assuming a perpetual inventory system.:
May 5
Purchased merchandise from Archie Co., $6,000, terms FOB shipping point, 2/10, n/30.
Prepaid freight costs of $100 were added to the invoice.
May 12
Issued a debit memo to Archie Co., for $2,500 of merchandise returned from purchase on May 5th.
May 14
Paid Archie Co. for invoice of May 5, less debit memo of May 12 and discount.
Journal
Date
Description
Post Ref
Debit
Credit
226. Record the following transactions for Sparky’s Pet Shop using the general journal form provided
below. Assume Sparky’s uses a perpetual inventory system. Omit transaction descriptions from entries:
Date
Transaction
August 1
Purchased $6,000 of merchandise on account, terms 2/10, n/30.
August 3
Returned $1,500 of merchandise purchased on August 1 due to defects.
August 7
Recorded cash sales for the first week of August $9,750; cost of the merchandise was $4,000.
August 10
Sale on account made to a local breeder for $500, terms 1/10 net 30; cost of the merchandise was $200.
August 11
Paid for the merchandise purchased on August 1, less return.
August 20
Received payment from sale of August 10. The customer took the discount.
Date
Accounts
Debit
Credit
227. Journalize the following transactions for both Abbott Co. (seller) and Dalton Co. (buyer). Assume both the
companies use the perpetual inventory system.
July 3
Abbott Co.sold merchandise on account to Dalton Co., $7,500, terms FOB shipping point, net/eom. The cost of the
merchandise sold was $4,400.
July 5
Dalton Co. paid $275 freight charges on purchase from Abbott Co.
July 9
Abbott Co. issued Dalton Co. a credit memo for merchandise returned, $2,250.
The cost of the merchandise returned was $1,325.
July 11
Abbott Co. received payment from Dalton Co. for purchase of July 3.
Abbott Co.
Dalton Co.
Date
Accounts
Debit
Credit
Accounts
Debit
Credit
228. Construct a chart of accounts, assigning account numbers and arranging the accounts in balance sheet and
income statement order (“1” for assets, and so on). Each account number is three digits. Contra accounts
should designated with a decimal of the account (100.1 for contra of account 100). Assets and liabilities should
be in order of liquidity, expenses should be in alphabetical order.
Accounts Payable
Equipment
Supplies Expense
Accounts Receivable
Land
Salaries Payable
Accumulated Depr - Equip
Merchandise Inventory
Sales
Advertising Expense
Notes Payable
Sales Discounts
Capital, Owner
Office Supplies
Sales Returns & Allowances
Cash
Utilities Expense
Cost of Merchandise Sold
Unearned Revenue
Depreciation Expense - Equip.
Salaries Expense
Drawing, Owner
Freight Out
229. Journalize the following transactions for the Evans Company. Assume the company uses a perpetual
inventory system.
1.
Sells merchandise for $645. Cost of merchandise sold $375.
2.
Sells merchandise for $432 and accepts VISA as the form of payment.
Cost of merchandise sold $195.
3.
Sells merchandise on account for $670. Cost of merchandise sold $438.
4.
Credit card fees paid for the month is $85.
Journal
P. 46
Date
Description
Debit
Credit
