Question

 Sales and purchase-related transactions using perpetual inventory system

 The following were selected from among the transactions completed by Essex Company during July of the current year. Essex uses the net method under a perpetual inventory system.

 July 3. Purchased merchandise on account from Hamling Co., list price $82,000, trade discount 20%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $930 added to the invoice.

 5. Purchased merchandise on account from Kester Co., $43,050, terms FOB destination, 2/10, n/30.

 6. Sold merchandise on account to Parsley Co., $14,460, terms n/15. The cost of the goods sold was $8,670.

 7. Returned merchandise with an invoice amount of $16,000 purchased on July 5 from Kester Co.

 13. Paid Hamling Co. on account for purchase of July 3.

 15. Paid Kester Co. on account for purchase of July 5, less return of July 7.

 21. Received cash on account from sale of July 6 to Parsley Co.

 21. Sold merchandise on MasterCard, $236,900. The cost of the goods sold was $127,080.

 22. Sold merchandise on account to Tabor Co., $62,100, terms 2/10, n/30. The cost of the goods sold was $33,560.

 23. Sold merchandise for cash, $35,080. The cost of the goods sold was $24,620.

 28. Paid Parsley Co. a cash refund of $6,210 for returned merchandise from sale of July 6. The cost of the returned merchandise was $3,580.

 31. Paid MasterCard service fee of $3,290.

 Required:

 Journalize the transactions. If an amount box does not require an entry, leave it blank.

..................

Answer 1

Essex Company
Journal entries
Date	Account	Debit	Credit	Calculation
3-Jul	Inventory	$     65,218		=((82,000*(1-20%))*(1-2%))+930
	Accounts Payable - Hamling Co.		$     65,218	Working below
5-Jul	Inventory	$     42,189		=43,050*(1-2%)
	Accounts Payable - Kestor Co.		$     42,189
6-Jul	Accounts Receivable - Parsley Co.	$     14,460
	Sales		$     14,460
6-Jul	Cost of goods sold	$        8,670
	Inventory		$        8,670
7-Jul	Accounts Payable - Kestor Co.	$     15,680		=16,000*(1-2%)
	Inventory		$     15,680
13-Jul	Accounts Payable - Hamling Co.	$     65,218
	Cash		$     65,218
15-Jul	Accounts Payable - Kestor Co.	$     26,509		=42,189-15,680
	Cash		$     26,509
21-Jul	Cash	$     14,460
	Accounts Receivable - Parsley Co.		$     14,460
21-Jul	Cash	$   236,900
	Sales		$   236,900
21-Jul	Cost of goods sold	$   127,080
	Inventory		$   127,080
22-Jul	Accounts Receivable - Tabor Co.	$     60,858		=62,100*(1-2%)
	Sales		$     60,858
22-Jul	Cost of goods sold	$     33,560
	Inventory		$     33,560
23-Jul	Cash	$     35,080
	Sales		$     35,080
23-Jul	Cost of goods sold	$     24,620
	Inventory		$     24,620
28-Jul	Customer Refunds Payable	$        6,210
	Cash		$        6,210
28-Jul	Inventory	$        3,580
	Estimated Returns Inventory		$        3,580
31-Jul	Credit Card Expense	$        3,290
	Cash		$        3,290
	Workings
	List Price	$     82,000
	Trade Discount @ 20%	$     16,400		=82,000*20%
	Invoice Price	$     65,600
	Cash Discount @ 2%	$        1,312		=65,600*2%
	Net Amount Payable	$     64,288
	Prepaid Freight	$           930		No discount on freight
	Total Payable	$     65,218