APPLYING THE CONCEPTS: Purchases and sales in action This is a list of purchases

Question

APPLYING THE CONCEPTS: Purchases and sales in action

This is a list of purchases and sales transactions that occurred in the month of November. Correctly journalize these transactions below. Use Smart Entry when dropdowns are not available. For compound entries, if amount box does not require an entry, leave it blank. If required, round to the nearest cent.

+ Assets

- Liabilities

+ Equity

+ Revenues/Gains

+ Expenses/Losses

GENERAL JOURNAL

   

Nov. 1

  

   

   

                  

           

  

   

   

                  

           

   

   

   

Nov. 2

  

   

   

                  

           

  

   

   

                  

           

   

   

   

Nov. 6

  

   

   

                  

           

  

   

   

                  

           

   

   

   

Nov. 8 Record sale

  

   

   

                  

           

  

   

   

                  

           

   

   

   

Nov. 8 Record cost

  

   

   

                  

           

  

   

   

                  

           

   

   

   

Nov. 10

  

   

   

                  

                  

           

  

   

   

                  

                  

           

  

   

   

                  

                  

           

   

   

   

Nov. 15 Record sales return

  

   

   

                  

           

  

   

   

                  

           

   

   

   

Nov. 15 Record goods returned

  

   

   

                  

           

  

   

   

                  

           

   

   

   

Nov. 16

  

   

   

                  

           

  

   

   

                  

           

   

   

   

Nov. 17

  

   

   

                  

                  

           

  

   

   

                  

                  

           

  

   

   

                  

                  

           

   

   

   

APPLYING THE CONCEPTS: Purchases and sales in action

See an illustrated example.

This is a list of purchases and sales transactions that occurred in the month of November. Correctly journalize these transactions below. Use Smart Entry when dropdowns are not available. For compound entries, if amount box does not require an entry, leave it blank. If required, round to the nearest cent.

November 1 Purchased inventory with credit terms 2/10, n/30, $3,700. November 2 Paid transportation costs, FOB shipping point, $100. November 6 Returned part of inventory purchased on 11/1 for a credit, $740. November 8 Sold inventory on credit, terms 2/10, n/30, $3,600; cost of inventory $2,160; transportation costs FOB shipping point at a cost of $100, paid by the buyer. November 10 Paid one half of the amount due for the purchase on 11/1. November 15 Accepted return of part of inventory sold on 11/8 for credit, $720; cost of the inventory, $432. November 16 Paid the remaining balance of the amount due for the purchase on 11/1. November 17 Collected in full for the sale on 11/8. Not sure about the account title? Click here to view the chart of accounts.

+ Assets

- Liabilities

Accounts Payable Sales Tax Payable State Income Tax Payable Notes Payable Estimated Warranty Liability Social Security Tax Payable Interest Payable Bonds Payable Medicare Tax Payable Salaries Payable Income Tax Payable Federal Unemployment Tax Payable Utilities Payable Unearned Revenue State Unemployment Tax Payable Dividends Payable Federal Income Tax Payable

+ Equity

+ Revenues/Gains

+ Expenses/Losses

GENERAL JOURNAL

page

   

             DATE         DESCRIPTION DOC.
NO. POST.
REF. DEBIT CREDIT      1

Nov. 1

  

   

   

                  

1 2

           

  

   

   

                  

2 3

           

   

   

   

3 4

Nov. 2

  

   

   

                  

4 5

           

  

   

   

                  

5 6

           

   

   

   

6 7

Nov. 6

  

   

   

                  

7 8

           

  

   

   

                  

8 9

           

   

   

   

9 10

Nov. 8 Record sale

  

   

   

                  

10 11

           

  

   

   

                  

11 12

           

   

   

   

12 13

Nov. 8 Record cost

  

   

   

                  

13 14

           

  

   

   

                  

14 15

           

   

   

   

15 16

Nov. 10

  

   

   

                  

                  

16 17

           

  

   

   

                  

                  

17 18

           

  

   

   

                  

                  

18 19

           

   

   

   

19 20

Nov. 15 Record sales return

  

   

   

                  

20 21

           

  

   

   

                  

21 22

           

   

   

   

22 23

Nov. 15 Record goods returned

  

   

   

                  

23 24

           

  

   

   

                  

24 25

           

   

   

   

25 26

Nov. 16

  

   

   

                  

26 27

           

  

   

   

                  

27 28

           

   

   

   

28 29

Nov. 17

  

   

   

                  

                  

29 30

           

  

   

   

                  

                  

30 31

           

  

   

   

                  

                  

31 32

           

   

   

   

32

Explanation / Answer

Journal Entries

Date

Description

Debit

Credit

Nov 1

Merchandise inventory

$3,700

To Accounts payable

$3,700

Nov 2

Merchandise inventory

$100

To Cash

$100

Nov 6

Accounts payable

$740

To Merchandise inventory

$740

Nov 8

Account receivable

$3,600

To Sales

$3,600

Cost of goods sold

$2,160

To Merchandise inventory

$2,160

Nov 10

Accounts payable(3700-740)/2

1,480

To Merchandise inventory 1480@2%

29.60

To Cash

1,450.40

Nov 15

Sales return and allowances

720

To Accounts receivable

720

Merchandise inventory

$432

To Cost of goods sold

$432

Nov 16

Accounts payable

$1,480

To Cash

$1,480

Nov 17

Account receivable

(3600 – 720)

$2,880

Sales discount

(2,880 @ 2%)

$57.60

To Cash

$2822.40

Date

Description

Debit

Credit

Nov 1

Merchandise inventory

$3,700

To Accounts payable

$3,700

Nov 2

Merchandise inventory

$100

To Cash

$100

Nov 6

Accounts payable

$740

To Merchandise inventory

$740

Nov 8

Account receivable

$3,600

To Sales

$3,600

Cost of goods sold

$2,160

To Merchandise inventory

$2,160

Nov 10

Accounts payable(3700-740)/2

1,480

To Merchandise inventory 1480@2%

29.60

To Cash

1,450.40

Nov 15

Sales return and allowances

720

To Accounts receivable

720

Merchandise inventory

$432

To Cost of goods sold

$432

Nov 16

Accounts payable

$1,480

To Cash

$1,480

Nov 17

Account receivable

(3600 – 720)

$2,880

Sales discount

(2,880 @ 2%)

$57.60

To Cash

$2822.40

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