Record the following transactions for Sparky’s Pet Shop. Date Transaction Aug. 1
ID: 341707 • Letter: R
Question
Record the following transactions for Sparky’s Pet Shop.
Date
Transaction
Aug. 1
Purchased $6,000 of merchandise on account, terms 2/10, n/30.
3
Returned $1,500 of merchandise purchased on August 1 due to defects.
7
Recorded cash sales for the first week of August, $9,750; cost of the merchandise was $4,000.
10
Made sale on account to a local breeder for $500, terms 1/10, net 30; cost of the merchandise was $200.
11
Paid for the merchandise purchased on August 1, less return.
20
Received payment from sale of August 10. The customer took the discount.
Required:
Journalize the above transactions. Assume Sparky’s uses a perpetual inventory system. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Sparky’s Pet Shop
General Ledger
ASSETS
110
Cash
120
Accounts Receivable
125
Notes Receivable
130
Merchandise Inventory
131
Estimated Returns Inventory
140
Supplies
142
Prepaid Insurance
180
Land
190
Equipment
191
Accumulated Depreciation
LIABILITIES
210
Accounts Payable
216
Salaries Payable
221
Sales Tax Payable
222
Customers Refunds Payable
231
Unearned Rent
241
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
REVENUE
410
Sales
EXPENSES
510
Cost of Merchandise Sold
521
Delivery Expense
522
Advertising Expense
523
Depreciation Expense
526
Salaries Expense
531
Rent Expense
533
Insurance Expense
534
Supplies Expense
536
Credit Card Expense
560
Miscellaneous Expense
710
Interest Expense
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Date
Transaction
Aug. 1
Purchased $6,000 of merchandise on account, terms 2/10, n/30.
3
Returned $1,500 of merchandise purchased on August 1 due to defects.
7
Recorded cash sales for the first week of August, $9,750; cost of the merchandise was $4,000.
10
Made sale on account to a local breeder for $500, terms 1/10, net 30; cost of the merchandise was $200.
11
Paid for the merchandise purchased on August 1, less return.
20
Received payment from sale of August 10. The customer took the discount.
Explanation / Answer
Journal entry :
Date Accounts & explanation Post Ref. debit credit Aug 1 Merchandise inventory 6000 Account payable 6000 (To record inventory purchased) Aug 3 Account payable 1500 Merchandise inventory 1500 (To record purchase return) Aug 7 Cash 9750 Sales revenue 9750 Cost of Merchandise sold 4000 Merchandise inventory 4000 (To record sale and cost of goods sold) Aug 10 Account receivable 500 Sales revenue 500 Cost of merchandise sold 200 Merchandise inventory 200 (To record sale and cost of goods sold) Aug 11 Account payable (6000-1500) 4500 Cash (4500*98%) 4410 Merchandise inventory (4500*2%) 90 (To record amount paid) Aug 20 Cash 495 Sales discount (500*1%) 5 Account receivable 500 (To record amount received)Related Questions
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