Question
GL0701 - Based on Problem 7-1A LO P1
Sanchez Company completes these transactions and events during March of the current year (terms for all its credit sales are 2/10, n/30).
Mar. 1 Purchased $45,300 of merchandise from Lee Industries, invoice dated March 1, terms 2/15, n/30. Mar. 2 Sold merchandise on credit to Gonzalez Co., Invoice No. 854, for $37,200 (cost is $22,000). Mar. 3 Purchased $1,300 of office supplies on credit from Walker Company, invoice dated March 3, terms n/10 EOM. Mar. 3 Sold merchandise on credit to Jose Garcia, Invoice No. 855, for $19,000 (cost is $11,400). Mar. 6 Borrowed $98,000 cash from First Bank by signing a long-term note payable. Mar. 9 Purchased $22,050 of office equipment on credit from Perez Supply, invoice dated March 9, terms n/10 EOM. Mar. 10 Sold merchandise on credit to Hillary Mannion, Invoice No. 856, for $15,200 (cost is $9,100). Mar. 12 Received payment from Gonzalez Co. for the March 2 sale less the discount. Mar. 13 Sent Lee Industries Check No. 416 in payment of the March 1 invoice less the discount. Mar. 13 Received payment from Jose Garcia for the March 3 sale less the discount. Mar. 14 Purchased $46,200 of merchandise from the Hall Co., invoice dated March 13, terms 2/10, n/30. Mar. 15 Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first half of the month, $21,700. Cashed the check and paid the employees. Mar. 15 Cash sales for the first half of the month are $35,000 (cost is $21,000). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.) Mar. 16 Purchased $2,200 of store supplies on credit from Walker Company, invoice dated March 16, terms n/10 EOM. Mar. 17 Received a $4,200 credit memorandum from Hall Co. for the return of unsatisfactory merchandise purchased on March 14. Mar. 19 Received a $3,310 credit memorandum from Perez Supply for office equipment received on March 9 and returned for credit. Mar. 20 Received payment from Hillary Mannion for the sale of March 10 less the discount. Mar. 23 Issued Check No. 418 to Hall Co. in payment of the invoice of March 13 less the March 17 return and the discount. Mar. 27 Sold merchandise on credit to Hillary Mannion, Invoice No. 857, for $33,000 (cost is $19,800). Mar. 28 Sold merchandise on credit to Jose Garcia, Invoice No. 858, for $11,400 (cost is $6,800). Mar. 31 Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the month, $21,700. Cashed the check and paid the employees. Mar. 31 Cash sales for the last half of the month are $31,500 (cost is $18,900).
Explanation / Answer
In the books of Sanchez Company Journal entries Date Particulars Debit Credit 01-Mar Investory $45,300 To Accounts payable $45,300 (being goods purchased from lee industries) 02-Mar Accounts receivable $37,200 Cost of goods sold $22,000 To Inventory $22,000 To Sales $37,200 (being goods sold to gonzalez Co.) 03-Mar Office Supplies $1,300 To Accounts payable $1,300 (Being office supplies purchased from walker co.) 03-Mar Accounts receivable $19,000 Cost of goods sold $11,400 To Inventory $11,400 To Sales $19,000 (being goods sold to jose garcia) 05-Mar Cash $98,000 To Long term note payable $98,000 (being borrowed from first bank) 09-Mar Office equipment $22,050 To Accounts payable $22,050 (Being office equipment purchased on credit.)
