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., $14,100, terms FOB shipping point, n/eom. The cost of merchandise sold was $8,500. 2. Sold merchandise for $25,500 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $16,600. 5. Sold merchandise on account to Peacock Company, $32,800, terms FOB destination, 2/10, n/30. The cost of merchandise sold was $21,300. 8. Sold merchandise for $8,300 plus 5% sales tax to retail customers who used VISA cards. The cost of merchandise sold was $5,000. 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., $9,900, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $5,800. 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, $6,800, terms FOB shipping point, 2/10, n/30. Paid $200 for freight and added it to the invoice. The cost of merchandise sold was $4,100. 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 $1,990 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 $1,010 for service fees for handling MasterCard and VISA sales during July 10. Paid $2,240 to state sales tax division for taxes owed on sales.

Explanation / Answer

In the books of Green Lawn Supplies Co. :

Contd.

Date Account Debit Credit $ $ July 1 Accounts Receivable 14,100 Sales 14,100 July 1 Cost of Goods Sold 8,500 Inventory 8,500 July 2 Cash 27,030 Sales 25,500 Sales Tax Payable 1,530 July 2 Cost of Goods Sold 16,600 Inventory 16,600 July 5 Accounts Receivable 32,800 Sales 32,800 July 5 Cost of Goods Sold 21,300 Inventory 21,300 July 8 Cash 8,715 Sales 8,300 Sales Tax Payable 415 July 8 Cost of Goods Sold 5,000 Inventory 5,000 July 13 Cash 10,000 Sales 10,000 July 13 Cost of Goods Sold 6,300 Inventory 6,300 July 14 Accounts Receivable 9,900 Sales 9,900

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