HH #9-JANUARY ORIGINAL JES Prepare the January JE\'s on the pages indicated. (J7

Question

HH #9-JANUARY ORIGINAL JES Prepare the January JE's on the pages indicated. (J7-J9 attached) There are several January transactions that will require looking back to the December transactions in order to determine the appropriate accounts/amounts to use in January. Beginning this month, HH has decided to start offering SALES DISCOUNTS to their customers, with CREDIT TERMS 2/10,n/30. You must now start checking to see if payments received from HH's customers are received within 10 days from the original date of the sale. If so, you must apply a 2% Sales Discount. See the Merchandising Review Notes for examples. Beginning on Jan 9th, MMLC will start offering HH PURCHASE DISCOUNTS with CREDIT TERMS 2/10, n/30, You will need to start checking to see if payments made by HH to MMLC are paid within the 10 day discount period. See the Merchandising Review Notes for examples HH renegotiated their credit limit with MMLC and HH may now charge up to $20.000 on account. * Jan 1 HH sells inventory to Inside Out Construction on account for $3,200. HH's cost of the inventory is $1,800. Record this just like the sales made on account by HH in December. Don't forget to make two entries-one for the sale on account at the selling price, and one to record HH's cost of goods sold and decrease in inventory. Jan 2 HH pays MMLC for the purchases HH made on account on December 4th Look back to the original transaction on Dec. 4th and record HH's payment to MMLC accordingly Jan 3 HH pays the salaries that were accrued and recorded as an adjustment on Dec. 31st in AJE (a) Look back at AJE (a) and record the cash payment of the accrued salaries. Jan 4 HH pays the January rent Make the same entry you made when HH paid the December rent. Inside Out Construction calls HH to complain that some of the lumber HH shipped in their January 1 order was defective. The office manager investigates the problem and agrees to grant Inside Out a Sales Allowance of $200. Be careful-this is just an allowance,NOT a RETURN of inventory, so it should NOT go back into the inventory account. And even if the merchandise had been returned to HH, it still wouldn't go back into inventory because it is defective. Also, remember not to refund Cash to Inside Out because they purchased the inventory on account on January 1st. Refer to examples in the Merchandising Review Notes Jan 5 Jan 6 Individual customer J. Bond realized that he miscalculated the amount of lumber he needed for his home improvement project and asks the HH office manager if he can return part of the inventory he had purchased back on 11/25/16. The selling price of the inventory he is returning is $350 + 8.25%

Explanation / Answer

Journal Entries for the month of January Date Account title Debit Credit Jan.1 Accounts Receivable 3200 Sales 3200 (To record sale to Inside out construction) Cost of goods sold 1800 Merchandise Inventory 1800 (To record cost of the goods sold to Inside out construction) Jan.2 The details of Dec.4 purchase required to make the entry Jan.3 No details given Jan.4 No details given Jan.5 Sales returnsand allowances 200 Accounts Receivable 200 (To record sales allowance given to Inside out construction) Jan.6 Sales 350.00 Sales tax payable 28.88 Cash 378.88 (To record return of goods by customer J.Bond) Merchandise Inventory 180 Cost of goods sold 180 (To record return of inventory from J.Bond) Jan.8 Cash 2940 Sales discount 60 Accounts Receivable 3000 (To record check received from Inside out construction) Jan.9 Merchandise Inventory 18000 Cash 4000 Accounts payable 14000 (To record purchase of merchandise from MMLC) Jan.10 Accounts Receivable 30000 Sales 30000 (To record sale made to Spotlight Construction) Cost of goods sold 18000 Merchandise Inventory 18000 (To record cost of goods sold to Spotlight Construction) Jan.15 Cash 29400 Sales discount 600 Accounts Receivable 30000 (To record check received from Spotlight Construction) Jan.16 Accounts payable 112.50 Cost of goods sold 112.50 (To record allowance granted by supplier) Jan.17 Accounts payable 13609.75 Cost of goods sold 277.75 Cash 13887.50 (To record ceck issued to MMLC for setlement of Jan.9 purchase) Jan.20 Merchandise Inventory 635 Cash 635 (To record purchase of special inventory +shipping charges) Jan.21 Accounts Receivable 1019.40 Sales 1019.40 (To record sale of special inventory to Star Wars Construction Co.) Jan.21 Cost of goods sold 635 Merchandise Inventory 635 (To record cost of special inventory sold) Jan.25 Details not available Jan.26 Merchandise Inventory 27000 Accounts payable 27000 (To record purchase of inventory from MMLC) Jan.29 Salaries and wages expense 6232 Cash 6232 (To record payment of salary and wages upto Jan.29) Jan.31 Details not available

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