Q22E
Question
Journalize the following transactions for Soul Art Gift Shop. Explanations are not required.
Feb. 3 Purchased \(3,300 of merchandise inventory under terms 3/10, n/EOM, and FOB shipping point.
7 Returned \)900 of defective merchandise purchased on February 3.
9 Paid freight bill of \(400 on February 3 purchase.
10 Sold merchandise inventory on account for \)4,700. Payment terms were 2/15, n/30. These goods cost the company $2,350.
12 Paid amount owed on credit purchase of February 3, less the return and the discount.
28 Received cash from February 10 customer in full settlement of their debt.
Step-by-Step Solution
VerifiedThe total of debits and credits is $18,750.
In accounting, the term journalizing refers to recording a business’s financial transactions in the books of accounts. The journalizing process is applicable where the management adopts the double-entry bookkeeping format of accounting.
Date | Accounts and Explanation | Debit ($) | Credit ($) |
Feb 3 | Merchandise inventory | 3,300 |
|
| Accounts payable |
| 3,300 |
Feb 7 | Accounts payable | 900 |
|
| Merchandise inventory |
| 900 |
Feb 9 | Freight-in | 400 |
|
| Cash |
| 400 |
Feb 10 | Accounts receivable | 4,700 |
|
| Sales revenue |
| 4,700 |
Feb 10 | Cost of goods sold | 2,350 |
|
| Merchandise inventory |
| 2,350 |
Feb 12 | Accounts payable (3300-900) | 2,400 |
|
| Cash (2400-3%*2400) |
| 2,328 |
| Merchandise inventory |
| 72 |
Feb 28 | Cash | 4,606 |
|
| Sales discount (2%*4700) | 94 |
|
| Accounts receivable |
| 4,700 |