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.

Nov. 3 Purchased merchandise on account from Moonlight Co., list price $89,000, trade discount 30%, terms FOB destination, 2/10, n/30. 4 Sold merchandise for cash, $38,210. The cost of the merchandise sold was $20,810. 5 Purchased merchandise on account from Papoose Creek Co., $51,550, terms FOB shipping point, 2/10, n/30, with prepaid freight of $730 added to the invoice. 6 Returned $14,000 ($20,000 list price less trade discount of 30%) of merchandise purchased on November 3 from Moonlight Co. 8 Sold merchandise on account to Quinn Co., $15,010 with terms n/15. The cost of the merchandise sold was $10,190. 13 Paid Moonlight Co. on account for purchase of November 3, less return of November 6. 14 Sold merchandise on VISA, $231,570. The cost of the merchandise sold was $142,060. 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., $54,800, terms 1/10, n/30. The cost of the merchandise sold was $33,850. 28 Paid VISA service fee of $3,580. 30 Paid Quinn Co. a cash refund of $6,420 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,140.

Explanation / Answer

SOLUTION

Date Accounts title and Explanations Debit ($) Credit ($) Nov.3 Merchandise Inventory (89,000*70%) 62,300   Accounts Payable-Moonlight Co 62,300 Nov, 4 Cash 38,210 Sales 38,210 Cost of Merchandise Sold 20,810   Merchandise Inventory 20,810 Nov. 5 Merchandise Inventory (51,550 + 730) 52,280   Accounts Payable-Papoose Creek Co 52,280 Nov. 6 Accounts Payable-Moonlight Co. 14,000   Merchandise Inventory 14,000 Nov. 8 Accounts Receivable-Quinn Co 15,010   Sales 15,010 Cost of Merchandise Sold 10,190   Merchandise Inventory 10,190 Nov. 13 Accounts payable- Moonlight co. ($62,300-14,000) 48,300 Cash 48,300    Nov. 14 Cash 231,570 Sales 231,570 Cost of Merchandise Sold 142,060 Merchandise Inventory 142,060 Nov. 15 Accounts Payable-Papoose Creek Co. 52,280 Cash 52,280 Nov. 23 Cash 15,010 Accounts Receivable-Quinn Co. 15,010 Nov. 24 Accounts Receivable-Rabel Co. 54,800 Sales 54,800 Cost of Merchandise Sold 33,850 Merchandise Inventory 33,850 Nov. 28 VISA card expense 3,580 Cash 3,580 Nov. 30 Sales Returns and Allowances 6,420 Accounts Receivable-Quinn Co. 6,420 Merchandise Inventory 3,140 Cost of Merchandise Sold 3,140

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