Sales and Notes Receivable Transactions The following were selected from among t

Question

Sales and Notes Receivable Transactions

The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale company:

Required:

Journalize the entries to record the transactions. Assume 360 days in a year. For a compound entry, if an amount box does not require an entry, leave it blank. Assume this is a year in which February has 28 days. Each date has the corresponding number of rows that the specific date should have. These rows are shown as spaces.

Jan. 13-sale ________

________

Jan. 13-cost ________

_________

Mar. 10 _________

_________

May 9 _________

_________

_________

June 10-sale ___________

___________

June 10-cost __________

___________

June 15 ___________

___________

June 20 ___________

___________

July 15 ___________

___________

___________

___________

Sept. 13-note ___________

_____________

____________

Sept. 13-sale ____________

____________

Sept. 13-cost ____________

_____________

Oct. 12 _____________

____________

Dec. 11 _____________

_____________

_____________

Dec. 26 ______________

_____________

_____________

Jan. 13. Sold merchandise on account to Black Tie Co., $36,300. The cost of goods sold was $21,780. Mar. 10. Accepted a 60-day, 9% note for $36,300 from Black Tie Co. on account. May 9. Received from Black Tie Co. the amount due on the note of March 10. June 10. Sold merchandise on account, terms 1/10, n/30, to Holen for $12,300. Record the sale net of the discount. The cost of goods sold was $7,380. 15. Loaned $18,000 cash to Pioneer Co., receiving a 30-day, 6% note. 20. Received from Holen the amount due on the invoice of June 10, less 1% discount. July 15. Received the interest due from Pioneer Co. and a new 60-day, 8% note as a renewal of the loan of June 15. (Record both the debit and the credit to the notes receivable account.) Sept. 13. Received from Pioneer Co. the amount due on its note of July 15. 13. Sold merchandise on account toWycoff Co., $20,000. The cost of goods sold was $12,000. Oct. 12. Accepted a 60-day, 6% note for $20,000 from Wycoff Co. on account. Dec. 11. Wycoff Co. dishonored the note dated October 12. 26. Received from Wycoff Co. the amount owed on the dishonored note, plus interest for 15 days at 12% computed on the maturity value of the note.

Explanation / Answer

Journal

Date Account Name Debit Credit Jan 13 Accounts receivable $36300 Sales revenue $36300 Jan 13 Cost of goods sold 21780 Inventory 21780 Mar 10 Notes receivable 36300 Accounts receivable 36300 May 9 Cash 36845 Interest revenue ($36300 x 9% x 60/360) 545 Accounts receivable 36300 Jun 10 Accounts receivable 12300 Sales revenue 12300 Jun 10 Cost of goods sold 7380 Inventory 7380 Jun 15 Note receivable 18000 Cash 18000 Jun 20 Cash 12177 Sales discounts (12300 x 1%) 123 Accounts receivable 12300 Jul 15 Cash 90 Note receivable 18000 Interest revenue ($18000 x6% x 30/360) 90 Note receivable 18000 Sept 13 Cash 18000 Note receivable 18000 Sept 13 Accounts receivable 20000 Sales revenue 20000 Sept 13 Cost of goods sold 12000 Inventory 12000 Oct 12 Note receivable 20000 Accounts receivable 20000 Dec 11 Accounts receivable 20000 Note receivable 20000 Dec 26 Cash 20300 Interest revenue [($20000 x 6% x 60/360) + ($20000 x 12% x 15/360)] 300 Accounts receivable 20000

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