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Question
Question: Journalize the following transactions that occurred in September 2018 for Cardinal. Assume Cardinal 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.
Sep. 3 Purchased merchandise inventory on account from Sherry Wholesalers, \(4,000. Terms 1/15, n/EOM, FOB shipping point.
4 Paid freight bill of \)75 on September 3 purchase.
4 Purchased merchandise inventory for cash of \(1,900.
6 Returned \)1,100 of inventory from September 3 purchase.
8 Sold merchandise inventory to Houston Company, \(5,500, on account. Terms 3/15, n/35. Cost of goods, \)2,365.
9 Purchased merchandise inventory on account from Tarin Wholesalers, \(12,000. Terms 3/10, n/30, FOB destination.
10 Made payment to Sherry Wholesalers for goods purchased on September 3, less return and discount.
13 After negotiations, received a \)200 allowance from Tarin Wholesalers.
15 Sold merchandise inventory to Java Company, \(3,300, on account. Terms 2/10, n/EOM. Cost of goods, \)1,320.
22 Made payment, less allowance, to Tarin Wholesalers for goods purchased on September 9.
25 Sold merchandise inventory to Smecker for \(1,900 on account that cost \)722. Terms of 1/10, n/30 were offered, FOB shipping point. As a courtesy to Smecker, $85 of freight was added to the invoice for which cash was paid by Cardinal.
28 Received payment from Houston Company.
29 Received payment from Smecker, less discount.
30 Received payment from Java Company.
Step-by-Step Solution
VerifiedAnswer
The total of debits and credits is $59,867.
In accounting, the term freight refers to the cost associated with the acquisition of goods delivered by any mode of transportation. Freight expense is generally categorized into two parts- freight-in and freight-out.
Date | Accounts and Explanation | Debit ($) | Credit ($) |
Sep 3 | Merchandise inventory | 4,000 |
|
| Accounts payable (Sherry) |
| 4,000 |
Sep 4 | Freight-in | 75 |
|
| Cash |
| 75 |
Sep 4 | Merchandise inventory | 1,900 |
|
| Cash |
| 1,900 |
Sep 6 | Accounts payable (Sherry) | 1,100 |
|
| Merchandise inventory |
| 1,100 |
Sep 8 | Accounts receivable (Houston) | 5,500 |
|
| Sales revenue |
| 5,500 |
Sep 8 | Cost of goods sold | 2,365 |
|
| Merchandise inventory |
| 2,365 |
Sep 9 | Merchandise inventory | 12,000 |
|
| Accounts payable (Tarin) |
| 12,000 |
Sep 10 | Accounts payable (Sherry) [4000-1100] | 2,900 |
|
| Merchandise inventory (2900*1%) |
| 29 |
| Cash |
| 2,871 |
Sep 13 | Accounts payable (Tarin) | 200 |
|
| Purchase returns and allowances |
| 200 |
Sep 15 | Accounts receivable (Java) | 3,300 |
|
| Sales revenue |
| 3,300 |
Sep 15 | Cost of goods sold | 1,320 |
|
| Merchandise inventory |
| 1,320 |
Sep 22 | Accounts payable (Tarin) [12000-200] | 11,800 |
|
| Cash |
| 11,800 |
Sep 25 | Accounts receivable (Smecker) | 1,985 |
|
| Sales revenue |
| 1,900 |
| Cash |
| 85 |
Sep 25 | Cost of goods sold | 722 |
|
| Merchandise inventory |
| 722 |
Sep 28 | Cash | 5,500 |
|
| Accounts receivable (Houston) |
| 5,500 |
Sep 29 | Cash | 1,881 |
|
| Sales discount (1900*1%) | 19 |
|
| Accounts receivable (Smecker) [1900-85] |
| 1,900 |
Sep 30 | Cash | 3,300 |
|
| Accounts receivable (Java) |
| 3,300 |