The following were selected from among the transactions completed by Babcock Com

Question

The following were selected from among the transactions completed by Babcock Company during November of the current year:

Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

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Chart of Accounts

CHART OF ACCOUNTS Babcock Company General Ledger ASSETS 110 Cash 121 Accounts Receivable-Quinn Co. 122 Accounts Receivable-Rabel Co. 125 Notes Receivable 130 Merchandise Inventory 131 Estimated Returns Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 211 Accounts Payable-Moonlight Co. 212 Accounts Payable-Papoose Creek Co. 216 Salaries Payable 218 Sales Tax Payable 219 Customers Refunds Payable 221 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary

The following were selected from among the transactions completed by Babcock Company during November of the current year:

Nov. 3 Purchased merchandise on account from Moonlight Co., list price $85,000, trade discount 25%, terms FOB destination, 2/10, n/30. 4 Sold merchandise for cash, $37,680. The cost of the merchandise sold was $22,600. 5 Purchased merchandise on account from Papoose Creek Co., $47,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice. 6 Returned $13,500 ($18,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co. 8 Sold merchandise on account to Quinn Co., $15,600 with terms n/15. The cost of the merchandise sold was $9,400. 13 Paid Moonlight Co. on account for purchase of November 3, less return of November 6. 14 Sold merchandise on VISA, $236,000. The cost of the merchandise sold was $140,000. 15 Paid Papoose Creek Co. on account for purchase of November 5. 23 Received cash on account from sale of November 8 to Quinn Co. 24 Sold merchandise on account to Rabel Co., $56,900, terms 1/10, n/30. The cost of the merchandise sold was $34,000. 28 Paid VISA service fee of $3,540. 30 Paid Quinn Co. a cash refund of $6,000 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,300.

Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

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Chart of Accounts

REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 521 Delivery Expense 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 526 Salaries Expense 531 Rent Expense 533 Insurance Expense 534 Store Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 539 Miscellaneous Expense 710 Interest Expense

Explanation / Answer

Journal entries are as prepared below:

Date Particulars L.F Debit Credit $ $ Nov-03 Merchandise Inventory 62,475    Accounts payable-Moonlight Co. 62,475 (For merchandise purchased) $85000- $85,000*25% = $63,750 $63,750- $63,750*2% = $62,475 Nov-04 Cash 37,680    Sales 37,680 (For merchandise sold ) Nov-04 Cost of merchandise sold 22,600    Merchandise Inventory 22,600 (For cost of merchandise recorded) Nov-05 Merchandise Inventory 47,360    Accounts payable-Papoose Creek Co. 47,360 (For merchandise purchased) ($47,500- $47,500*2%)+810 Nov-06 Accounts payable-Moonlight Co. 13,230    Merchandise Inventory 13,230 (For merchandise returned, purchased on November 3) $13500-$13,500*2% Nov-08 Accounts Receivable- Quinn Co. 15,600    Sales 15,600 (For merchandise sold ) Nov-08 Cost of merchandise sold 9,400    Merchandise Inventory 9,400 (For cost of merchandise recorded) Nov-13 Accounts payable-Moonlight Co. 49,245    Cash 49,245 (For Paid for purchase on November 3) Nov-14 Cash 236,000    Sales 236,000 (For merchandise sold ) Nov-14 Cost of merchandise sold 140,000    Merchandise Inventory 140,000 (For cost of merchandise recorded) Nov-15 Accounts payable-Papoose Creek Co. 47,360    Cash 47,360 (For Paid for purchase on November 5) Nov-23 Cash 15,600    Accounts Receivable- Quinn Co. 15,600 (For cash received for sale on November 8) Nov-24 Accounts Receivable- Rabel Co. 56,331    Sales 56,331 (For merchandise sold ) ($56,900-$56,900*1%=$56,331) Nov-24 Cost of merchandise sold 34,000    Merchandise Inventory 34,000 (For cost of merchandise recorded) Nov-28 VISA service fees 3,540    Cash 3,540 (For visa service fees paid) Nov-30 Customer Refund payable- Quinn Co. 6,000    Cash 6,000 (For cash paid for sale return $6,000) Nov-30 Merchandise Inventory 3,300    Cost of merchandise sold 3,300 (For cost of merchandise returnedrecorded)

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