Sales-Related and Purchase-Related Transactions Using Perpetual Inventory System
ID: 341318 • Letter: S
Question
Sales-Related and Purchase-Related Transactions Using Perpetual Inventory System
The following were selected from among the transactions completed by Babcock Company during November of the current year:
Required:
Journalize the transactions.
Nov. 3. Purchased merchandise on account from Moonlight Co., list price $82,000, trade discount 20%, terms FOB destination, 2/10, n/30. 4. Sold merchandise for cash, $34,860. The cost of the goods sold was $21,290. 5. Purchased merchandise on account from Papoose Creek Co., $43,000, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice. 6. Returned $14,400 ($18,000 list price less trade discount of 20%) of merchandise purchased on November 3 from Moonlight Co. 8. Sold merchandise on account to Quinn Co., $14,650 with terms n/15. The cost of the merchandise sold was $9,800. 13. Paid Moonlight Co. on account for purchase of November 3, less return of November 6. 14. Sold merchandise on VISA, $253,780. The cost of the goods sold was $153,950. 15. Paid Papoose Creek Co. on account for purchase of November 5. 23. Received cash on account from sale of November 8 to Quinn Co. 24. Sold merchandise on account to Rabel Co., $56,500, terms 1/10, n/30. The cost of the goods sold was $33,500. 28. Paid VISA service fee of $3,190. 30. Paid Quinn Co. a cash refund of $6,140 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,090.Explanation / Answer
Date Accouunts Title & Explanation Debit Credit Nov 3 Merchandise Inventory 65,600 Accounts Payable—Moonlight Co. 65,600 [$82,000 – ($82,000 × 20%)] = $65,600. Nov 4 Cash 34,860 Sales 34,860 Nov 4 Cost of Merchandise Sold 21,290 Merchandise Inventory 21,290 Nov 5 Merchandise Inventory 43,810 Accounts Payable—Papoose Creek Co. 43,810 Nov 6 Accounts Payable—Moonlight Co. 14,400 Merchandise Inventory 14,400 Nov 8 Accounts Receivable—Quinn Co. 14,650 Sales 14,650 Nov 8 Cost of Merchandise Sold 9,800 Merchandise Inventory 9,800 Nov 13 Accounts Payable—Moonlight Co. 51,200 Cash 50,176 Merchandise Inventory 1,024 Nov 14 Cash 253,780 Sales 253,780 Nov 14 Cost of Merchandise Sold 153,950 Merchandise Inventory 153,950 Nov 15 Accounts Payable—Papoose Creek Co. 43,810 Cash 42,950 Merchandise Inventory(43000 x 2%) 860 Nov 23 Cash 14,650 Accounts Receivable—Quinn Co. 14,650 Nov 24 Accounts Receivable—Rabel Co. 56,500 Sales 56,500 Nov 24 Cost of Merchandise Sold 33,500 Merchandise Inventory 33,500 Nov 28 Credit Card Expense 3,190 Cash 3,190 Nov 30 Sales Returns and Allowances 6,140 Cash 6,140 Nov 30 Merchandise Inventory 3,090 Cost of Merchandise Sold 3,090
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