Sales-Related Transactions Using Perpetual Inventory System The following select

Question

Sales-Related Transactions Using Perpetual Inventory System

The following selected transactions were completed by Green Lawn Supplies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers:

Required:

Journalize the entries to record the transactions of Green Lawn Supplies Co. For a compound transaction, if no entry is required, leave the entry box blank.

July 1. Sold merchandise on account to Landscapes Co., $13,900, terms FOB shipping point, n/eom. The cost of merchandise sold was $8,300. 2. Sold merchandise for $18,000 plus 8% sales tax to retail cash customers. The cost of merchandise sold was $11,700. 5. Sold merchandise on account to Peacock Company, $30,100, terms FOB destination, 2/10, n/30. The cost of merchandise sold was $19,600. 8. Sold merchandise for $8,700 plus 6% sales tax to retail customers who used VISA cards. The cost of merchandise sold was $5,200. 13. Sold merchandise to customers who used MasterCard cards, $10,000. The cost of merchandise sold was $6,300. 14. Sold merchandise on account to Loeb Co., $10,900, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $6,400. 15. Received check for amount due from Peacock Company for sale on July 5. 16. Issued credit memo for $1,600 to Loeb Co. for merchandise returned from sale on July 14. The cost of the merchandise returned was $900. 18. Sold merchandise on account to Jennings Company, $5,200, terms FOB shipping point, 2/10, n/30. Paid $250 for freight and added it to the invoice. The cost of merchandise sold was $3,100. 24. Received check for amount due from Loeb Co. for sale on July 14 less credit memo of July 16. 28. Received check for amount due from Jennings Company for sale of July 18. 31. Paid Black Lab Delivery Service $2,300 for merchandise delivered during July to customers under shipping terms of FOB destination. 31. Received check for amount due from Landscapes Co. for sale of July 1. Aug. 3. Paid Hays Federal Bank $910 for service fees for handling MasterCard and VISA sales during July 10. Paid $2,260 to state sales tax division for taxes owed on sales.

Explanation / Answer

Date Account titles & Explanations Debit Credit 1-Jul Accounts receivable 13,900 sales 13,900 cost of goods sold 8,300 Merchandise inventory 8,300 2-Jul Accounts receivable 19,440 sales 18,000 Sales tax paayble 1440 cost of goods sold 11,700 Merchandise ivnentory 11,700 5-Jul Accounts receivable 30,100 sales 30,100 cost of goods sold 19,600 Merchandise inventory 19,600 8-Jul cash 9,222 sales 8,700 Sales tax paayble 522 cost of goods sold 5,200 Merchandise ivnentory 5,200 13-Jul Cash 10,000 sales 10,000 cost of goods sold 6,300 Merchandise inventory 6,300 14-Jul Accounts receivable 10,900 sales 10,900 cost of goods sold 6,400 Merchandise inventory 6,400 15-Jul Cash (30100*98%) 29498 Sales discount 602 Account receivable 30,100 16-Jul Sales return 1,600 Account receivable 1,600 Merchandise inventory 900 cost of goods sold 900 18-Jul Accounts receivable (5200+250) 5450 Sales 5450 cost of goods sold 3,100 Merchandise inventory 3,100 24-Jul Cash (9300*99%) 9207 Sales discount 93 Accounts receivable (10900--1600) 9300 28-Jul Cash (5200*98%+250) 5346 Sales discount (5200*2%) 104 Accounts receivable 5,450 31-Jul Merchandise inventory 2,300 cash 2,300 31-Jul Cash 13,900 Account receivable 13,900 3-Aug Service fees 910 cash 910 10-Aug Sales tax payable 2,260 cash 2,260

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