Sales-related transactions using perpetual inventory system The following select
ID: 2600676 • Letter: S
Question
Sales-related transactions using perpetual inventory system
The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers. Also note that the company uses a clearing house to take care of all bank as well as non-bank credit cards used by its customers.
Record on page 10 of the journal
Record on page 11 of the journal
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
Score: 116/400
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Points:
22.91 / 79
Question not attempted.
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JOURNAL
ACCOUNTING EQUATION
Score: 0/226
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Check My Work
Journalize these transactions from the seller's perspective using the perpetual inventory system. Discounts are given on the amount owed by the buyer, except for any freight costs.
Mar. 2: Note that FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver. Discounts are given on the amount owed by the buyer, except for any freight costs. Keep in mind that two entries are required for this transaction: (1) for the sale on account and (2) for the cost of the merchandise sold (expense) and inventory reduction on the seller's records.
Mar. 3: The sales tax liability is incurred at the time of sale. It is debited when the seller pays the tax to the state. The amount due from the buyer is the sales amount plus the sales tax. Two entries are required: (1) for the sale including sales tax and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 4: Note that FOB shipping point freight is the buyer's expense. Often freight must be prepaid for the carrier to deliver. Two entries are required: (1) for the sale on account and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 5: The sales tax liability is incurred at the time of sale. It is debited when the seller pays the tax to the state. The amount due from the buyer is the sales amount plus the sales tax. Remember that credit card transactions are recorded as cash sales. Two entries are required: (1) for the sale including sales tax and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 12: Since the invoice was paid within the discount period, the seller credits Accounts Receivable for the balance in the account, while debiting Cash for the difference between the invoice and the discount.
Mar. 14: Remember that credit card transactions are recorded as cash sales. Two entries are required: (1) for the sale and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 16: Note that FOB shipping point freight is the buyer's expense. Often freight must be prepaid for the carrier to deliver. Two entries are required: (1) for the sale on account and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 18: Customer Refunds Payable is debited while the credit is applied to the buyer's Account Receivable. A second entry increases Inventory and credits Estimated Returns Inventory for the return cost.
Mar. 19: Note that FOB shipping point freight is the buyer's expense. Often freight must be prepaid for the carrier to deliver, so credit cash for the added freight. Three entries are required: (1) for the sale on account, (2) for the prepaid freight added to the invoice, and (3) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 26: The return of merchandise reduces the original invoice amount paid by the buyer.
Mar. 28: Since no discount is given on freight, the seller credits Accounts Receivable for the balance in the account, while debiting Cash for the invoice amount less the discount amount, plus the prepaid freight.
Mar. 31: Since no discounts are allowed, no discounts are recorded. The cash paid on account is equal to the invoice.
Mar. 31: FOB shipping point freight is the buyer's cost, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.
Apr. 3: Record the service fee as an expense.
Apr. 15: Since all sales taxes from customer transactions are recorded as a liability, Sales Tax Payable must be debited when they are paid to the state in cash.
Sales-related transactions using perpetual inventory system
The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers. Also note that the company uses a clearing house to take care of all bank as well as non-bank credit cards used by its customers.
Record on page 10 of the journal
Record on page 11 of the journal
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
Score: 116/400
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
Points:
22.91 / 79
Question not attempted.
PAGE 11
JOURNAL
ACCOUNTING EQUATION
Score: 0/226
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Points:
0 / 45
Check My Work
Journalize these transactions from the seller's perspective using the perpetual inventory system. Discounts are given on the amount owed by the buyer, except for any freight costs.
Mar. 2: Note that FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver. Discounts are given on the amount owed by the buyer, except for any freight costs. Keep in mind that two entries are required for this transaction: (1) for the sale on account and (2) for the cost of the merchandise sold (expense) and inventory reduction on the seller's records.
Mar. 3: The sales tax liability is incurred at the time of sale. It is debited when the seller pays the tax to the state. The amount due from the buyer is the sales amount plus the sales tax. Two entries are required: (1) for the sale including sales tax and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 4: Note that FOB shipping point freight is the buyer's expense. Often freight must be prepaid for the carrier to deliver. Two entries are required: (1) for the sale on account and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 5: The sales tax liability is incurred at the time of sale. It is debited when the seller pays the tax to the state. The amount due from the buyer is the sales amount plus the sales tax. Remember that credit card transactions are recorded as cash sales. Two entries are required: (1) for the sale including sales tax and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 12: Since the invoice was paid within the discount period, the seller credits Accounts Receivable for the balance in the account, while debiting Cash for the difference between the invoice and the discount.
Mar. 14: Remember that credit card transactions are recorded as cash sales. Two entries are required: (1) for the sale and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 16: Note that FOB shipping point freight is the buyer's expense. Often freight must be prepaid for the carrier to deliver. Two entries are required: (1) for the sale on account and (2) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 18: Customer Refunds Payable is debited while the credit is applied to the buyer's Account Receivable. A second entry increases Inventory and credits Estimated Returns Inventory for the return cost.
Mar. 19: Note that FOB shipping point freight is the buyer's expense. Often freight must be prepaid for the carrier to deliver, so credit cash for the added freight. Three entries are required: (1) for the sale on account, (2) for the prepaid freight added to the invoice, and (3) for the cost of the merchandise sold and inventory decrease on the seller's records.
Mar. 26: The return of merchandise reduces the original invoice amount paid by the buyer.
Mar. 28: Since no discount is given on freight, the seller credits Accounts Receivable for the balance in the account, while debiting Cash for the invoice amount less the discount amount, plus the prepaid freight.
Mar. 31: Since no discounts are allowed, no discounts are recorded. The cash paid on account is equal to the invoice.
Mar. 31: FOB shipping point freight is the buyer's cost, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.
Apr. 3: Record the service fee as an expense.
Apr. 15: Since all sales taxes from customer transactions are recorded as a liability, Sales Tax Payable must be debited when they are paid to the state in cash.
Mar. 2 Sold merchandise on account to Equinox Co., $18,900, terms FOB destination, 1/10, n/30. The cost of the goods sold was $13,300. 3 Sold merchandise for $11,350 plus 6% sales tax to retail cash customers. The cost of the goods sold was $7,000. 4 Sold merchandise on account to Empire Co., $55,400, terms FOB shipping point, n/eom. The cost of the goods sold was $33,200. 5 Sold merchandise for $30,000 plus 6% sales tax to retail customers who used MasterCard. The cost of the goods sold was $19,400. 12 Received check for amount due from Equinox Co. for sale on March 2. 14 Sold merchandise to customers who used American Express cards, $13,700. The cost of the goods sold was $8,350. 16 Sold merchandise on account to Targhee Co., $27,500, terms FOB shipping point, 1/10, n/30. The cost of the goods sold was $16,000. 18 Issued credit memo for $4,800 to Targhee Co. for merchandise returned from sale on March 16. The cost of the merchandise returned was $2,900.Explanation / Answer
AMSTERDAM SUPPLY COMPANY General journal for the monht of March Ref. Date Account Title Debit Credit Assets = Liability + Equity 1 Mar.2 Sales to Equinox Co. 18900 18900 18900 = + 18900 2 Mar.2 Cost of goods sold to Equinox Co. 13300 13300 -13300 = + -13300 3 Mar.3 Cash sales 12031 12031 12031 = 681 + 11350 4 Mar.3 Cost of goods sold on cash 7000 7000 -7000 = + -7000 5 Mar.4 Sales to Empire Co. 55400 55400 55400 = + 55400 6 Mar.4 Cost of goods sold to Empire Co. 33200 33200 -33200 = + -33200 7 Mar.5 Sales to Master card customers 31800 31800 31800 = 1800 + 30000 8 Mar.5 Cost of goods sold to Master card customers 19400 19400 -19400 = + -19400 9 Mar.12 Cash collected from Equinox Co. 189 189 -189 = + -189 10 Mar.14 Sales to American Express card customers 13700 13700 13700 = + 13700 11 Mar.14 Cost of goods sold to American Express card customers 8350 8350 -8350 = + -8350 12 Mar.16 Sales to Targhee Co. 27500 27500 27500 = + 27500 13 Mar.16 Cost of goods sold to Targhee Co. 16000 16000 -16000 = + -16000 14 Mar.18 Return of merchandise from Targhee Co. 4800 4800 -4800 = + -4800 15 Mar.18 Cost of goods returned from Targhee Co. 2900 2900 2900 = + 2900 16 Mar.19 Sale to Vista Co. 8325 8325 8325 = 75 + 8250 17 Mar.19 Cost of goods sold to Vista Co. 5000 5000 -5000 = + -5000 18 Mar.26 Collection from Targee Co. Less return and discount 227 227 -227 = + -227 19 Mar.28 Collection from Vista Co. 75 75 -75 = -75 + 20 Mar.31 Collection from Vista Co. 55400 55400 0 = 0 + 0 21 Mar.31 Paid to Fleetwood delivery services for deliveries to customers 5600 5600 -5600 = + -5600 22 Apr.3 Payment made to City Bank for service charges 940 940 -940 = + -940 23 Apr.15 Payment of sales tax 6544 6544 -6544 = -6544 + 49931 = -4063 + 53994
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