February 1 Paid $3,750 accounts payable balance due to a supplier. March 15 Rece
ID: 2375738 • Letter: F
Question
February 1 Paid $3,750 accounts payable balance due to a supplier.
March 15 Received $2,500 partial payment on a $5,000 accounts receivable balance. Wrote off the rest of the account as uncollectible.
April 1 Purchased on account $53,700 merchandise for resale, with 2/10, n/30 terms.
April 5 Paid the invoice for April 1 purchase
October 10 Sold merchandise for cash of $28,000. Cost of the merchandise sold was $12,200.
November 1 Borrowed $20,000 at 6% interest for 5 years with annual payments of principal and interest on October 31. Used the loan proceeds to purchase a $20,000 delivery truck.
December 5 Sold merchandise on account for $91,500. Cost of the merchandise sold was $40,500. Payment terms on the invoice were 1/10, n/30.
December 7 Of the merchandise sold on December 5, $2,000 was returned. Cost of the merchandise was $1,100.
INSTRUCTIONS: Journalize the appropriate entries for the above transactions. The company uses a perpetual inventory system.
Explanation / Answer
DR Accounts Payable 3,750 CR Cash 3,750 DR Cash 2,500 DR Allowance for doubtful accounts 2,500 CR Accounts Receivable 2,500 DR Inventory 53,000 CR Accounts Payable 53,000 DR Accounts Payable 53,000 CR Inventory 1,060 CR Cash 51,940 DR Cash 28,000 CR Sales Revenue 28,000 DR Cost of goods sold 12,200 CR Inventory 12,200 DR Accounts Receivable 91,500 CR Sales Revenue 91,500 DR Cost of goods sold 40,500 CR Inventory 40,500 DR Sales Returns 2,200 CR Accounts Receivable 2,200 DR Inventory 1,100 CR Cost of goods sold 1,100 DR Fixed Assets -Vehicles 20,000 CR Notes Payable 20,000
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