Required ata for June 2012 are for Rusk Company\'s first moth of Prepare and pol
ID: 2583698 • Letter: R
Question
Required ata for June 2012 are for Rusk Company's first moth of Prepare and pol was organized, and the stockholders invested $1,008,000 cashaland 1Rusk Company of merchandise inventory, and a $288,000 plot of land in exchange for and desified ncan capital stock. 4 chandise cuhofsio,080 was paid to atrucking cormpany fr delivery ofthe was purchased for cash,S432FOB shippingpoint,hedaoled. ement (L.O 1 was purchased for cash, $432,000, FOB shipping point, fcigh collec Hn/ merchandise purchased June 4. 13 The company sold merchandise on account, $288,000, terms 2/10, n30 15 The company sold merchandise on account, $230,400, terms 2/10, n/30. 16 Of the merchandise sold June 13, $31,680 was returned for crodit. 20 Salaries for services received were paid as follows: to office employees 22 The company collected the amount due on the remaining $256.320 of accounts 24 The company purchased merchandise on account at a cost of $345,600, term 26 The company returned $$7,600 of the merchandise parchased June 24 to the $31,680, to salespersons, $83,520. receivable arising from the sale of June 13. 2/10, n/30, FOB shipping point, freight collect vendor for credit. 27 A trucking company was paid $7,200 for delivery to Rusk Company of the goods purchased June 24 29 The company sold merchandise on account, $384,000, terms 2/10, n/30. 30 Sold merchandise for cash, $172,800. 30 Payment was received for the sale of June 15. 30 Paid store rent for June, $43,200 30 Paid the amount due on the purchase of June 24. The inventory on hand at the close of business June 30 was $672,000 at cost You are required to prepare all the neccessary journal entries for the buver and seller THank vouExplanation / Answer
JOURNAL ENTRIES IN THE BOOKS OF RUSK COMPANY
_________________________________________________________________________________
Date Description Debit ($) Debit ($)
2012
June 1 Dr Cash 1,008,000
Dr Merchandise Inventory 336,000
Dr Plot of land 288,000
Cr Capital stock 1,632,000
(For recording capital stock)
June 4 Dr Purchases 432,000
Cr Cash 432,000
( For purchase of merchandise)
June 9 Dr Freight 10,080
Cr Cash 10,080
(For payment of delivery of goods)
June 13 Dr Accounts Receivable 288,000
Cr Revenue 288,000
(For receiving payment)
June 15 Dr Accounts Receivable 230,400
Cr Revenue 230,400
(For sale of merchandise on credit)
June 16 Dr Revenue 31,680
Cr Accounts Receivbale 31,680
(For receiving return of goods)
June 20 Dr Salaries 115,200
Cr Cash 115,200
( For payment of salaries)
June 22 Dr Cash 256,320
Cr Accounts Receivble 256,320
(For receiving cash)
June 24 Dr Purchases 345,600
Cr Accouns payable 345,600
(For purchasing goods on credit)
June 26 Dr Accounts payable 57,600
Cr Purchases 57,600
(For returning the goods)
June 27 Dr Freight 7,200
Cr Cash 7,200
(For payment of shippment)
June 29 Dr Accounts Receivable 384,000
Cr Revenue 384,000
(For sale of merchandise on credit)
June 30 Dr Cash 172,800
Cr Revenue 172,800
(for making sales for cash)
June 30 Dr Cash 225,792
Dr Discount 4,608
Cr Accounts Receivable 230,400
(For receiving cash @2% discount)
June 30 Dr Rent 43,200
Cr Cash 43,200
(For payment of rent)
June 30 Dr Accounts payable 288,000
Cr Cash 282,240
Cr Discount 5,760
(For payment of payables @2%discount)
Note:
1. On June 30 cash received from accounts receivable @2% discount as they have paid with in 10 days, for that it is offered 2% discount ie. 4,608 (i.e total amount due 230,400 x 2% discount)
2/10 n 30 means customer allowed credit period 30 days, but if he pays within 10 days, he will be offered 2% discount
2. On June 30 payment made to payables with 2% discount ie. $5,760 (i.e toal payables $345,600 less returns 57,600 made on June 26 = 288,000 on this 2% discount) as payment is made within 10 days
Entries in other parties books :
June 24: Journal entry in seller books :
Dr Cash 432,000
Cr Revenue 432,000
June 13: Journal entry in the buyer books
Dr Purchases 288,000
Cr Accounts payable 288,000
June 15 Dr Purchases 230,400
Cr Accounts payables 230,400
June 16 Dr Accounts payable 31,680
Cr Purchases 31,680
June 22 Dr Accounts payable 256,320
Cr Cash 256,320
June 24 Journal entry in the books of seller
Dr Accounts Receivables 345,600
Cr Revenue 345,000
June 26 Dr Revenue 57,600
Cr Accounts receivable 57,600
June 29: Journal entry in the books of buyer
Dr Purchases 384,000
Cr Accounts payable 384,000
June 30 Dr Purchases 172,800
Cr Cash 172,800
June 30 Dr Accounts payables 230,400
Cr Cash 225,792
Cr Discount 4,608
June 30: Journal entry in the books of seller
Dr Cash 282,240
Dr Discount 5,760
Cr Accounts receivbles 288,000
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