5-42PGB
Question
Journalize the following transactions that occurred in January 2018 for Sylvia’s Amusements. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Sylvia estimates sales returns at the end of each month.
Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, \(7,000. Terms 1/10, n/EOM, FOB shipping point.
6 Paid freight bill of \)100 on January 4 purchase.
8 Returned half the inventory purchased on January 4 from Vanderbilt Company.
10 Sold merchandise inventory for cash, \(1,600. Cost of goods, \)640. FOB destination.
11 Sold merchandise inventory to Graceland Corporation, \(10,800, on account, terms of 1/10, n/EOM. Cost of goods, \)5,400. FOB shipping point.
12 Paid freight bill of \(60 on January 10 sale.
13 Sold merchandise inventory to Cabbell Company, \)9,500, on account, terms of n/45. Cost of goods, \(5,225. FOB shipping point.
14 Paid the amount owed on account from January 4, less return and discount.
17 Received defective inventory as a sales return from the January 13 sale, \)600. Cost of goods, \(300.
18 Purchased inventory of \)4,600 on account from Roberts Corporation. Payment terms were 3/10, n/30, FOB destination.
20 Received cash from Graceland Corporation, less discount.
26 Paid amount owed on account from January 18, less discount.
28 Received cash from Cabbell Company, less return.
29 Purchased inventory from Sandra Corporation for cash, \(11,600, FOB shipping point. Freight in paid to shipping company, \)240.
Step-by-Step Solution
VerifiedThe total of debit and credit is $88,965.
In accounting, the term sales allowances refer to the special reduction provided by the seller in the price list of the goods to its customers on retaining the inappropriate goods. Here, inappropriate goods mean the discrepancy between goods ordered and goods received.
Date | Accounts and Explanation | Debit ($) | Credit ($) |
2018 |
|
|
|
Jan 4 | Merchandise inventory | 7,000 |
|
| Accounts payable (Vanderbilt company) |
| 7,000 |
Jan 6 | Merchandise inventory | 100 |
|
| Cash |
| 100 |
Jan 8 | Accounts payable (Vanderbilt company) | 3,500 |
|
| Merchandise inventory |
| 3,500 |
Jan 10 | Cash | 1,600 |
|
| Sales revenue |
| 1,600 |
Jan 10 | Cost of goods sold | 640 |
|
| Merchandise inventory |
| 640 |
Jan 11 | Accounts receivable (Graceland Corp) | 10,800 |
|
| Sales revenue |
| 10,8000 |
Jan 11 | Cost of goods sold | 5,400 |
|
| Merchandise inventory |
| 5,400 |
Jan 12 | Delivery expense | 60 |
|
| Cash |
| 60 |
Jan 13 | Accounts receivable (Cabbell company) | 9,500 |
|
| Sales revenue |
| 9,500 |
Jan 13 | Cost of goods sold | 5,225 |
|
| Merchandise inventory |
| 5,225 |
Jan 14 | Accounts payable (Vanderbilt company) [7000-3500] | 3,500 |
|
| Cash |
| 3,465 |
| Merchandise inventory (3500*1%) |
| 35 |
Jan 17 | Sales returns and allowances | 600 |
|
| Accounts receivable (Cabbell company) |
| 600 |
Jan 17 | Merchandise inventory | 300 |
|
| Cost of goods sold |
| 300 |
Jan 18 | Merchandise inventory | 4,600 |
|
| Accounts payable (Roberts corp.) |
| 4,600 |
Jan 20 | Cash | 10,692 |
|
| Sales discount (10800*1%) | 108 |
|
| Accounts receivable (Graceland corp.) |
| 10,800 |
Jan 26 | Accounts payable (Roberts corp.) | 4,600 |
|
| Merchandise inventory (4600*3%) |
| 138 |
| Cash |
| 4,462 |
Jan 28 | Cash (9500-600) | 8,900 |
|
| Accounts receivable (Cabbell company) |
| 8,900 |
Jan 29 | Merchandise inventory | 11,600 |
|
| Cash |
| 11,600 |
Jan 29 | Merchandise inventory | 240 |
|
| Cash |
| 240 |