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P5B-39A Journalizing purchase and sale transactions—periodic inventory system
Learning Objective 8 Appendix 5B
Journalize the following transactions that occurred in March 2018 for Double Company. Assume
Double uses the periodic inventory system. No explanations are needed. Identify each accounts
payable and accounts receivable with the vendor or customer name. Double estimates sales
returns at the end of each month.
Mar. 3 Purchased merchandise inventory on account from Sidecki Wholesalers, $5,500. Terms
2/15, n/EOM, FOB shipping point.
4 Paid freight bill of $70 on March 3 purchase.
4 Purchased merchandise inventory for cash of $1,100.
6 Returned $900 of inventory from March 3 purchase.
8 Sold merchandise inventory to Herrick Company, $3,400, on account. Terms 1/15, n/35.
9 Purchased merchandise inventory on account from Tex Wholesalers, $5,600. Terms 2/10,
n/30, FOB destination.
10 Made payment to Sidecki Wholesalers for goods purchased on March 3, less return and
discount.
12 Received payment from Herrick Company, less discount.
13 After negotiations, received a $500 allowance from Tex Wholesalers.
15 Sold merchandise inventory to Jesper Company, $1,700, on account. Terms n/EOM.
22 Made payment, less allowance, to Tex Wholesalers for goods purchased on March 9.
23 Jesper Company returned $300 of the merchandise sold on March 15.
25 Sold merchandise inventory to Salter for $1,000 on account. Terms of 1/10, n/30 was
offered, FOB shipping point.
29 Received payment from Salter, less discount.
30 Received payment from Jesper Company, less return.
SOLUTION
P5B-39A, cont.
P5B-40A Preparing a multi-step income statement and journalizing closing entries
Learning Objective 8 Appendix 5B
1. Gross Profit $192,600
Triton Department Store uses a periodic inventory system. The adjusted trial balance of Triton
Department Store at December 31, 2018, follows:
Requirements
1. Prepare Triton Department Store’s multi-step income statement for the year ended December
31, 2018. Assume ending Merchandise Inventory is $36,300.
2. Journalize Triton Department Store’s closing entries.
SOLUTION
Requirement 1
P5B-40A, cont.
Requirement 2
P5-41B Journalizing purchase and sale transactions
Learning Objectives 2, 3
Journalize the following transactions that occurred in February 2018 for Oceanic. No
explanations are needed. Identify each accounts payable and accounts receivable with the vendor
or customer name. Oceanic estimates sales returns at the end of each month.
Feb. 3 Purchased merchandise inventory on account from Silton Wholesalers, $5,200. Terms 2/15,
n/EOM, FOB shipping point.
4 Paid freight bill of $70 on February 3 purchase.
4 Purchased merchandise inventory for cash of $1,500.
6 Returned $900 of inventory from February 3 purchase.
8 Sold merchandise inventory to Herenda Company, $5,600, on account. Terms 3/15, n/35. Cost of
goods, $2,352.
9 Purchased merchandise inventory on account from Teddy Wholesalers, $7,000. Terms 1/10, n/30,
FOB destination.
10 Made payment to Silton Wholesalers for goods purchased on February 3, less return and discount.
12 Received payment from Herenda Company, less discount.
13 After negotiations, received a $500 allowance from Teddy Wholesalers.
15 Sold merchandise inventory to Jordon Company, $3,400, on account. Terms n/EOM. Cost of
goods, $1,496.
22 Made payment, less allowance, to Teddy Wholesalers for goods purchased on February 9.
23 Jordon Company returned $1,000 of the merchandise sold on February 15. Cost of goods, $440.
25 Sold merchandise inventory to Smith for $1,700 on account that cost $663. Terms of 2/10, n/30
were offered, FOB shipping point. As a courtesy to Smith, $70 of freight was added to the invoice
for which cash was paid by Oceanic.
27 Received payment from Smith, less discount.
28 Received payment from Jordon Company, less return.
SOLUTION
P5-41B, cont.
P5-42B Journalizing purchase and sale transactions
Learning Objectives 2, 3
Journalize the following transactions that occurred in January 2018 for Sylvia’s Amusements. No
explanations are needed. Identify each accounts payable and accounts receivable with the vendor
or customer name. Sylvia estimates sales returns at the end of each month.
Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, $7,000. Terms
1/10, n/EOM, FOB shipping point.
6 Paid freight bill of $100 on January 4 purchase.
8 Returned half the inventory purchased on January 4 from Vanderbilt Company.
10 Sold merchandise inventory for cash, $1,600. Cost of goods, $640. FOB destination.
11 Sold merchandise inventory to Graceland Corporation, $10,800, on account, terms of 1/10,
n/EOM. Cost of goods, $5,400. FOB shipping point.
12 Paid freight bill of $60 on January 10 sale.
13 Sold merchandise inventory to Cabbell Company, $9,500, on account, terms of n/45. Cost
of goods, $5,225. FOB shipping point.
14 Paid the amount owed on account from January 4, less return and discount.
17 Received defective inventory as a sales return from the January 13 sale, $600. Cost of
goods, $300.
18 Purchased inventory of $4,600 on account from Roberts Corporation. Payment terms were
3/10, n/30, FOB destination.
20 Received cash from Graceland Corporation, less discount.
26 Paid amount owed on account from January 18, less discount.
28 Received cash from Cabbell Company, less return.
29 Purchased inventory from Sandra Corporation for cash, $11,600, FOB shipping point.
Freight in paid to shipping company, $240.
SOLUTION
P5-42B, cont.
