9PGB
Question
Journalize the following transactions that occurred in January 2018 for Mike’s Amusements. Assume Mike’s uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.
Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, \(5,000. Terms 1/10, n/EOM, FOB shipping point.
6 Paid freight bill of \)150 on January 4 purchase.
8 Returned half the inventory purchased on January 4 from Vanderbilt Company.
10 Sold merchandise inventory for cash, \(1,100. Cost of goods, \)440. FOB destination.
11 Sold merchandise inventory to Gilmore Corporation, \(10,100, on account, terms of 3/10, n/EOM. Cost of goods, \)5,555. FOB shipping point.
12 Paid freight bill of \(30 on January 10 sale.
13 Sold merchandise inventory to Cadet Company, \)8,800, on account, terms of 3/10, n/45. Cost of goods, \(4,400. FOB shipping point.
14 Paid the amount owed on account from January 4, less return and discount.
18 Purchased inventory of \)4,600 on account from Roberts Corporation. Payment terms were 1/10, n/30, FOB destination.
20 Received cash from Gilmore Corporation, less discount.
26 Paid amount owed on account from January 18, less discount.
28 Received cash from Cadet Company.
29 Purchased inventory from Silk Corporation for cash, \(12,000, FOB shipping point. Freight in paid to shipping company, \)240.
Step-by-Step Solution
VerifiedThe total of debits and credits is $80,915.
In accounting, sales returns refer to the goods returned by the customers. Sales returns occur when goods are not up to the mark, are defective, or are found damaged by the customers. Sales returns decrease the sales revenues of the business entity and are treated separately in the books.
Date | Accounts and Explanation | Debit ($) | Credit ($) |
Jan 4 | Merchandise inventory | 5,000 |
|
| Accounts payable (Vanderbilt) |
| 5,000 |
Jan 6 | Freight-in | 150 |
|
| Cash |
| 150 |
Jan 8 | Accounts payable (Vanderbilt) | 2,500 |
|
| Merchandise inventory |
| 2,500 |
Jan 10 | Cash | 1,100 |
|
| Sales revenue |
| 1,100 |
Jan 10 | Cost of goods sold | 440 |
|
| Merchandise inventory |
| 440 |
Jan 11 | Accounts receivable (Gilmore) | 10,100 |
|
| Sales revenue |
| 10,100 |
Jan 11 | Cost of goods sold | 5,555 |
|
| Merchandise inventory |
| 5,555 |
Jan 12 | Delivery expense | 30 |
|
| Cash |
| 30 |
Jan 13 | Accounts receivable (Cadet) | 8,800 |
|
| Sales revenue |
| 8,800 |
Jan 13 | Cost of goods sold | 4,400 |
|
| Merchandise inventory |
| 4,400 |
Jan 14 | Accounts payable (Vanderbilt) [5000-2500] | 2,500 |
|
| Merchandise inventory (2500*1%) |
| 25 |
| Cash |
| 2,475 |
Jan 18 | Merchandise inventory | 4,600 |
|
| Accounts payable (Roberts) |
| 4,600 |
Jan 20 | Cash | 9,797 |
|
| Sales discount (10100*3%) | 303 |
|
| Accounts receivable (Gilmore) |
| 10,100 |
Jan 26 | Accounts payable (Roberts) | 4,600 |
|
| Merchandise inventory (4600*1%) |
| 46 |
| Cash |
| 4,554 |
Jan 28 | Cash | 8,800 |
|
| Accounts receivable (Cadet) |
| 8,800 |
Jan 29 | Merchandise inventory | 12,000 |
|
| Cash |
| 12,000 |
Jan 29 | Freight-in | 240 |
|
| Cash |
| 240 |