American Meter Company closes its books and prepares financial statements at the
ID: 2575892 • Letter: A
Question
American Meter Company closes its books and prepares financial statements at the end of each month. American uses the perpetual inventory system. The company completed the following transactions during August, 2017:
Aug 1 Issued check no. 682 for August rent of $1,000
2. Issued check no. 683 to pay salaries of $1,240, which includes salary payable of $930 from July 31 (ignore payroll deductions).
2. Issued invoice no. 503 for sale on account to R. T. Loeb, $600. American’s cost of this merchandise was $190.
3. Purchased inventory on credit terms of 1/15, n/60 from Grant, Inc., $1,400
4. Received net amount of cash on account from Fullam Company, $2,156, within the discount period. The invoice, dated July 26 with terms of 2/10, net 30, was in the amount of $2,200.
4. Sold inventory for cash, $330 (cost, $104)
5. Received from Park-Hee, Inc. merchandise that had been sold earlier for $550 (cost, $174)
5. Issued check no. 684 to purchase supplies for cash, $780
6. Collected interest revenue of $1,100
7. Issued invoice no. 504 for sale on account to K. D. Skipper, $2,400 (cost, $759)
8. Issued check no. 685 to pay Federal Company $2,600 of the amount owed at July 31. This payment occurred after the discount period.
11. Issued check no. 686 to pay Grant, Inc. the net amount owed from August 3
12. Received cash from R. T. Loeb in full settlement of her account receivable from August 2
16. Issued check no. 687 to pay salary expense of $1,240
19. Received half the July 31 amount receivable from K. D. Skipper—after the end of the discount period
19. Purchased inventory for cash $850, issuing check no. 688
22. Purchased furniture on credit terms of 3/15, n/60 from Beaver Corporation, $510
23. Sold inventory on account to Fullam Company, issuing invoice no. 505 for $9,966 (cost, $3,152)
25. Issued check no. 689 to pay utilities, $432
26. Purchased supplies on credit terms 2/10, n/30 from Federal Company, $180
30. Returned damaged inventory to company from whom American made the cash purchase on August 19, receiving cash of $850
30. Granted a sales allowance of $175 to K. D. Skipper
31. Purchased inventory on credit terms 1/10, n/30 from Suncrest Supply, $8,330
31. Issued check no. 690 to Lester Mednick, owner of the business, for personal withdrawal, $1,700
The chart of accounts with account balances as of July 31, 2017 are as follows:
General Ledger
101 Cash $ 8,650 401 Sales Revenue
102 Accounts Receivable 19,560 402 Sales Discounts
104 Interest Receivable 403 Sales Returns & Allowances
105 Merchandise Inventory 41,800 410 Interest Revenue
109 Supplies 2,150 501 Cost of Goods Sold
117 Prepaid Insurance 2,200 510 Salary Expense
140 Note Receivable, Long-Term 11,000 513 Rent Expense
160 Furniture 37,270 514 Depreciation Expense
161 Accumulated Depreciation 10,550 516 Insurance Expense
201 Accounts Payable 13,410 517 Utilities Expense
204 Salary Payable 930 519 Supplies Expense
207 Interest Payable 320 523 Interest Expense
220 Note Payable, Long-Term 42,000
301 Lester Mednick, Capital 55,420
302 Lester Mednick, Withdrawals
400 Income Summary
Accounts Receivable Subsidiary Ledger:
Fullam Company, $3,200
R T. Loeb, 0
Park-Hee Inc., 7,590
K.D. Skipper, 8,770
Accounts Payable Subsidiary Ledger:
Beaver Corporation $ 0
Federal Company 13,410
Grant, Inc, 0
Suncrest Supply 0
Journalize the August transactions in the general journal (page 9). Do not include the explanations. American makes all credit sales on terms of 2/10, n/30 unless otherwise indicated. I have posted the beginning balances to the general ledgers and subsidiary ledgers for you.
Explanation / Answer
AMERICAN METER COMPANY General journal for the month of August 2017 Date Account Title Debit Credit Aug.1 Rent expense 1000 Cash 1000 Aug.2 Salary payable 930 Salary expense 310 Cash 1240 Aug.2 Accounts receivable 600 Sales Revenue 600 Cost of goods sold 190 Merchandise inventory 190 Aug.3 Merchandise inventory 1400 Accounts payable 1400 Aug.4 Cash 2156 Sales discount 44 Accounts receivable 2200 Aug.4 Cash 330 Sales Revenue 330 Cost of goods sold 104 Merchandise inventory 104 Aug.5 Sales returns and allowances 550 Accounts receivable 550 Merchandise inventory 174 Cost of goods sold 174 Aug.5 Supplies 780 Cash 780 Aug.6 Cash 1100 Interest revenue 1100 Aug.7 Accounts receivable 2400 Sales Revenue 2400 Cost of goods sold 759 Merchandise inventory 759 Aug.8 Accounts payable 2600 Cash 2600 Aug.11 Accounts payable 1400 Cash 1386 Cost of goods sold 14 Aug.12 Cash 588 Sales discount 12 Accounts receivable 600 Aug.16 Salary expense 1240 Cash 1240 Aug.19 Cash 4385 Accounts receivable 4385 Aug.19 Merchandise inventory 850 Cash 850 Aug.22 Furniture 510 Accounts payable 510 Aug.23 Accounts receivable 9966 Sales Revenue 9966 Cost of goods sold 3152 Merchandise inventory 3152 Aug.25 Utilities expense 432 Cash 432 Aug.26 Supplies 180 Accounts payable 180 Aug.30 Cash 850 Merchandise inventory 850 Aug.30 Sales returns and allowances 175 Accounts receivable 175 Aug.31 Merchandise inventory 8330 Accounts payable 8330 Aug.31 Lester Mednik - Withdrawal 1700 Cash 1700
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.