Record the following transactions on page 21 of the journal. Refer to the Chart
ID: 2446190 • Letter: R
Question
Record the following transactions on page 21 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
May 20 Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,000. The cost of the merchandise sold was $70,000. 21 For the convenience of Crescent Co., paid freight on sale of May 20, $2,300. 21 Received $42,900 cash from Gee Co. on account. 21 Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000. 24 Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000. 26 Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800. 28 Paid sales salaries of $56,000 and office salaries of $29,000. 29 Purchased store supplies for cash, $2,400. 30 Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, $78,750. The cost of the merchandise sold was $47,000. 30 Received cash from sale of May 20 plus freight paid on May 21. 31 Paid for purchase of May 21, less return of May 24.Explanation / Answer
(1) May 20
(a)
DR Accounts Receivable $110,000
Sales $110,000
(To record FOB Shipping point sales made)
(b)
DR Cost of Merchandise Sold $70,000
Merchandise Inventory $70,000
(To record cost of merchandise sold)
(2) May 21
DR Accounts Receivable $2,300
Sales $2,300
(To record freight paid on sales made on May 20)
(3) May 21
DR Cash $42,900
Accounts Payable $42,900
(To record cash received on account from Gee Co)
(4) May 21
DR Cost of Merchandise Sold $88,000
Accounts Payable $88,000
(To record purchase of merchandise on account)
(5) May 24
DR Accounts Payable $5,000
Merchandise Inventory $5,000
(To record return of merchandise purchased on May 21)
(6) May 26
(a)
DR Sales $7,500
Cash $7,500
(To record cash returns made on cash sales)
(b)
DR Merchandise Inventory $4,800
Cost of Merchandise Sold $4,800
(To record inventory cost of the merchandise sales returned)
(7) May 28
DR Sales Salaries Expense $56,000
DR Office Salaries expense $29,000
Cash $85,000
(To record sales salaries and office salaries expenses)
(8) May 29
DR Store Supplies $2,400
Cash $2,400
(To record store supplies purchased for cash)
(9) May 30
(a)
DR Accounts Receivable $78,750
Sales $78,750
(To record sales made on account)
(b)
DR Cost of Merchandise Sold $47,000
Merchandise Inventory $47,000
(To record cost of merchandise sold)
(10) May 30
DR Cash $111,200**
DR Miscellaneous Selling Expense $1,100@
Accounts Receivable $112,300
(To record cash received from on account sales made on May 20)
** Includes: $110,000 x 0.99 = $108,900 of Sales and $2,300 of fright expense paid
@ Discount as per credit terms = $110,000 x 1% = $1,100
(11) May 31
DR Accounts Payable $83,000
Cash $82,170**
Discount received $830@
(To record payment for purchases on account)
** Cash paid = $(88,000 - 5,000 (Purchase returns)) x 99% = $82,170
@ Discount received = $(88,000 - 5,000 (Purchase returns)) x 1% = $830
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