AB-12SE - Horngren'S Financial And Managerial Accounting

Question

Recording transactions in a general journal

 

Mar. 2 Sold merchandise inventory on account, terms n/30, to B. Kelp, issuing

invoice no. 501 for \(1,000 (cost, \)680).

6 Issued credit memo to B. Kelp for \(1,000 for merchandise returned to 

thebusiness by the customer. Also accounted for receipt of the 

merchandiseinventory at cost.

21 Purchased merchandise inventory on credit terms of 3/10, n/30 from 

PondCo., \)600.

28 Returned damaged merchandise inventory to Pond Co., issuing a debit

memo for $600.

Journalize the above transactions that should be recorded in the general journal.If a transaction should not be recorded in the general journal, identify the specialjournal that should be used. Assume the company uses the perpetual inventorysystem.

 

Step-by-Step Solution

Answer

Total of general journal amounts to $2,280.

Step1: Transactions to be recorded in General Journal

Date	Particular	Debit	Credit
Mar. 6	Sales Return	$1,000
	B. Kelp		$1,000
	Being goods returned by the customer
6	Merchandise Inventory	680
	Cost of goods sold		680
	Being cost of inventory returned to pool
28	Pond Co.	600
	Purchase Return		600
	Being goods returned to the creditor

 

Step 2: Transactions not to be recorded in General Journal

March 2– This transaction would not be recorded in the general journal. This is a sales transaction on account and would be recorded in the sales journal. 

 

March 21– This transaction would also not be recorded in the general journal. This is related to purchase on account and would be reported in the purchase journal.