Waters Hardware Store completed the following merchandising transactions in the
ID: 2415622 • Letter: W
Question
Waters Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Water's ledger showed Cash of $8,240 and Common Stock of $8,240. Purchased merchandise on account from Hauke Wholesale Supply for $8,200, terms 1/10, n/30. Sold merchandise on account for $5,300, terms 2/10, n/30. The cost of the merchandise sold was $3,975. Received credit from Hauke Wholesale Supply for merchandise returned $400. Received collections in full, less discounts, from customers billed on May 2. Paid Hauke Wholesale Supply in full, less discount. Purchased supplies for cash $927. Purchased merchandise for cash $3,193. Received $237 refund for return of poor-quality merchandise from supplier on cash purchase. Purchased merchandise from Friedrich Distributors for $5,200, terms 2/10, n/30. Paid freight on May 17 purchase $258. Sold merchandise for cash $5,665. The cost of the merchandise sold was $4,223. Purchased merchandise from Fasteners Inc. for $824, terms 3/10, n/30. Paid Friedrich Distributors in full, less discount. Made refunds to cash customers for returned merchandise $142. The returned merchandise had cost $107. Sold merchandise on account for $1,318, terms n/30. The cost of the merchandise sold was $855. Journalize the transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries if presented in the problem.)Explanation / Answer
May 1) Merchandise Dr $ 8,200
Account payable Cr $ 8,200
May 2) Account receivable Dr $ 5,300
Sales Revenue Cr $ 5,300
Cost of goods sold Dr $ 3,975
merchandise Cr $ 3,975
May 5) Account payable Dr $ 400
merchandise Cr $ 400
May 9) Cash Dr $ 5,194
Discount on sale Dr $ 106
Accounts Receivable Cr $ 5,300
May 10) Accounts payable $ 7,800
Cash Cr $ 7,722
Discount received Cr $ 78
May 11) Supplies Dr $ 927
Cash Cr $ 927
May 12) Merchandise Dr $ 3,193
Cash Cr $ 3,193
May 15) Cash Dr $ 237
Merchandise Cr $ 237
May 17) Merchandise Dr $ 5,200
Accounts Payable Cr $ 5,200
May 19) freight Dr $ 258
Cash Cr $ 258
May 24) Cash Dr $ 5,665
sales Revenue Cr $ 5,665
Cost of goods Sold Dr $ 4,223
merchandise Cr $ 4,223
May 25) Merchandise Dr $ 824
Accounts payable Cr $ 824
May 27) Accounts Payable Dr $ 5,200
Cash Cr $ 5,096
Discount Received Cr $ 104
May 29) Sales return Dr $ 142
Cash Cr $ 142
Merchandise Dr $ 107
Cost of goods sold Cr $ 107
May 31) Accounts receivable dr $ 1,318
sales Revenue Cr $ 1,318
cost of goods sold Dr $ 855
Merchandise Cr $ 855
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