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., $16,400, terms FOB shipping point, n/eom. The cost of merchandise sold was $9,800. 2. Sold merchandise for $24,600 plus 5% sales tax to retail cash customers. The cost of merchandise sold was $16,000. 5. Sold merchandise on account to Peacock Company, $34,800, terms FOB destination, 2/10, n/30. The cost of merchandise sold was $22,600. 8. Sold merchandise for $10,100 plus 5% sales tax to retail customers who used VISA cards. The cost of merchandise sold was $6,100. 13. Sold merchandise to customers who used MasterCard cards, $8,000. The cost of merchandise sold was $5,000. 14. Sold merchandise on account to Loeb Co., $10,000, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $5,900. 15. Received check for amount due from Peacock Company for sale on July 5. 16. Issued credit memo for $1,500 to Loeb Co. for merchandise returned from sale on July 14. The cost of the merchandise returned was $800. 18. Sold merchandise on account to Jennings Company, $6,600, terms FOB shipping point, 2/10, n/30. Paid $230 for freight and added it to the invoice. The cost of merchandise sold was $4,000. 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 $1,800 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 $1,100 for service fees for handling MasterCard and VISA sales during July 10. Paid $2,000 to state sales tax division for taxes owed on sales.

Explanation / Answer

Date Account Debit Credit 1-Jul Accounts receivable-Lad sacpes 16,400 sales 16,400 cost of goods sold 9,800 Merchandise inventory 9,800 2-Jul Cash 25,830 Sales 24,600 Sales tax payable 1230 cost of goods sold 16,000 merchandise inventory 16,000 5-Jul Accounts receivable-peacock 34,800 sales 34,800 cost of goods sold 22,600 Merchandise inventory 22,600 8-Jul Cash 10,605 Sales 10,100 Sales tax payable 505 cost of goods sold 6,100 merchandise inventory 6,100 13-Jul Cash 8,000 sales 8,000 cost of goods sold 5,000 Merchandise inventory 5,000 jlu 14 Accounts receivable-Loeb Co 10,000 sales 10,000 cost of goods sold 5,900 Merchandise inventory 5,900 15-Jul Cash 34104 Sales discount (34,800*2%) 696 Accounts receivable peacock 34,800 16-Jul Sales return & allowance 1,500 Accounts recievable-Loeb co 1,500 Merchandise inventory 800 cost of goods sold 800 18-Jul Accounts receivable(6600+230) 6830 Sales - 6,830 cost of goods sold 4,000 Merchandise inventory 4,000 24-Jul Cash 8415 Sales discount (8500*1%) 85 Accounts receivable loeb(10000-1500) 8500 28-Jul Cash (6600*98%+230) 6698 Sales discount (6600*2%) 132 Accont receivable 6,830 31-Jul Freight out 1,800 cash 1,800 31-Jul Cash 16,400 Account receivable-landscape 16,400 3-Aug Service fee 1,100 cash 1,100 10-Aug Sales tax payable 2,000 cash 2,000

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