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The following were selected from among the transactions completed by Babcock Company during November of the current year. Babcock uses the net method under a perpetual inventory system.
Nov. 3 Purchased merchandise on account from Moonlight Co., list price $89,000, trade discount 30%, terms FOB destination, 2/10, n/30.
4 Sold merchandise for cash, $38,210. The cost of the goods sold was $20,810.
5 Purchased merchandise on account from Papoose Creek Co., $51,550, terms FOB shipping point, 2/10, n/30, with prepaid freight of $730 added to the invoice.
6 Returned $14,000 ($20,000 list price less trade discount of 30%) of merchandise purchased on November 3 from Moonlight Co.
8 Sold merchandise on account to Quinn Co., $15,010 with terms n/15. The cost of the goods sold was $10,190.
13 Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
14 Sold merchandise on VISA, $231,570. The cost of the goods sold was $142,060.
15 Paid Papoose Creek Co. on account for purchase of November 5.
23 Received cash on account from sale of November 8 to Quinn Co.
24 Sold merchandise on account to Rabel Co., $54,800, terms 1/10, n/30. The cost of the goods sold was $33,850.
28 Paid VISA service fee of $3,580.
30 Paid Quinn Co. a cash refund of $6,420 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,140.
Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTSBabcock CompanyGeneral Ledger
ASSETS
110 Cash
121 Accounts Receivable-Quinn Co.
122 Accounts Receivable-Rabel Co.
125 Notes Receivable
130 Inventory
131 Estimated Returns Inventory
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
180 Land
192 Store Equipment
193 Accumulated Depreciation-Store Equipment
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
211 Accounts Payable-Moonlight Co.
212 Accounts Payable-Papoose Creek Co.
216 Salaries Payable
218 Sales Tax Payable
219 Customer Refunds Payable
221 Notes Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
526 Salaries Expense
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710 Interest Expense

Sagot :

Answer and Explanation:

The journal entries are shown below:

On Nov 3

Merchandise Inventory  $62,300 ($89,000 × (1-30%))

        To Accounts Payable-Moonlight Co $62,300

(Being inventory purchased on account)  

On Nov 4

Cash $38,210  

      To Sales $38,210

(Being cash is recorded)

Cost of goods sold $20,810  

         To Merchandise Inventory $20,810

(Being cost of inventory is recorded)

On Nov 5

Merchandise Inventory $52,280 ($51,550 + $730)

        To Accounts Payable-Papoose Creek $52,280

(Being inventory purchased on account)  

On Nov 6

Accounts Payable-Moonlight Co.  $14,000  

         To Merchandise Inventory $14,000

(Being returned goods is recorded)  

On Nov 8

Accounts Receivable-Quinn Co $ 15,010  

          To Sales $15,010

(Being sales is recorded)

Cost of goods sold $10,190  

        To Merchandise Inventory $10,190

(Being cost of inventory is recorded)

 On Nov 13

Accounts Payable-Moonlight Co.  48,300 (62,300- 14,000)

        To Cash 47,334  

        To Merchandise Inventory 966 ($48,300 × 2%)

(being cash paid is recorded)

On Nov 14

Cash $231,570  

       To Sales $231,570

(Being cash is recorded)

Cost of goods sold $142,060  

       To Merchandise Inventory $142,060

(Being cost of inventory is recorded)

On Nov 15

Accounts Payable-Papoose Creek $52,280  

           To Cash $51,249  

          To Merchandise Inventory 1,031 ($51,550 ×2%)

(Being cash paid is recorded)

On Nov 23

Cash $15,010  

          To Accounts Receivable-Quinn Co $15,010

(Being cash collection is recorded)

On Nov 24

Accounts Receivable-Rabel Co. $54,800  

          To Sales $54,800

(being sales is recorded)

Cost of goods sold $33,850  

         To Merchandise Inventory  $33,850

(Being cost of inventory is recorded)

On Nov 28

VISA service fees $3,580  

          To Cash $3,580

(Being cash paid is recorded)

On Nov 30

Sales returns and allowances $6,420  

            To Cash 6,420

(Being sales return is recorded)

Merchandise Inventory 3,140  

         To Cost of goods sold $3,140

(Being returned inventory is recorded)

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