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 $89,000, trade discount 30%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $890 added to the invoice.
5.	Purchased merchandise on account from Kester Co., $51,350, terms FOB destination, 2/10, n/30.
6.	Sold merchandise on account to Parsley Co., $15,730, terms n/15. The cost of the goods sold was $8,590.
7.	Returned merchandise with an invoice amount of $12,600 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, $252,060. The cost of the goods sold was $149,490.
22.	Sold merchandise on account to Tabor Co., $53,500, terms 2/10, n/30. The cost of the goods sold was $36,180.
23.	Sold merchandise for cash, $35,200. The cost of the goods sold was $24,380.
28.	Paid Parsley Co. a cash refund of $5,550 for returned merchandise from sale of July 6. The cost of the returned merchandise was $3,610.
31.	Paid MasterCard service fee of $3,510.

Required:

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

July 3	Inventory
	Accounts Payable-Hamling Co.
July 5	Inventory
	Accounts Payable-Kester Co.
July 6	Accounts Receivable-Parsley Co.
	Sales
July 6	Cost of Goods Sold
	Inventory
July 7	Accounts Payable-Kester Co.
	Inventory
July 13	Accounts Payable-Hamling Co.
	Cash
July 15	Accounts Payable-Kester Co.
	Cash
July 21	Cash
	Accounts Receivable-Parsley Co.
July 21	Cash
	Sales
July 21	Cost of Goods Sold
	Inventory
July 22	Accounts Receivable-Tabor Co.
	Sales
July 22	Cost of Goods Sold
	Inventory
July 23	Cash
	Sales
July 23	Cost of Goods Sold
	Inventory
July 28	Customers Refunds Payable
	Cash
July 28	Inventory
	Estimated Returns Inventory
July 31	Credit Card Expense
	Cash

Answer 1

Answer:

Credit Date July 3 Debit $61,944 Account title and Explanation Inventory [(89,000 x 0.70 x 0.98) + 890] Accounts Payable-Hamling Co. [To record purchase of inventory on account] $61,944 $49,317 July 5 Inventory (51,350 x 0.98] x 0.98 Accounts Payable-Kester Co. [To record purchase of inventory on account] $49,317 July 6 $15,730 Accounts Receivable-Parsley Co. Sales [To record credit sales] $15,730 $8,590 July 6 Cost of Goods Sold Inventory [To record cost of goods sold] $8,590 $12,348 July 7 Accounts Payable-Kester Co. (12,600 x 0.98] Inventory [To record purchase of inventory on account] $12,348 $61,944 July 13 Accounts Payable-Hamling Co. Cash (To record cash paid for accounts payable] $61,944 $36,969 July 15 Accounts Payable-Kester Co. (49,317-12,348] Cash [To record cash paid for accounts payable] $36,969 $15,730 July 21 Cash Accounts Receivable-Parsley Co. [To record collections from customers] $15,730 $252,060 July 21 Cash Sales [To record card sales] $252,060 $149,490 July 21 Cost of Goods Sold Inventory [To record cost of goods sold] $149,490 $52,430 July 22 Accounts Receivable-Tabor Co. (53,500 x 0.98] Sales [To record credit sales] $52,430 $36,180 July 22 Cost of Goods Sold Inventory [To record cost of goods sold] $36,180 $35,200 July 23 Cash Sales [To record cash sales] $35,200 $24,380 July 23 Cost of Goods Sold Inventory [To record cost of goods sold] $24,380 $5,550 July 28 Customers Refunds Payable Cash [To record purchase returns] $5,550 $3,610 July 28 Inventory Estimated Returns Inventory [To record cost of purchase returns] $3,610 $3,510 July 31 Credit Card Expense Cash [To record card fee expense] $3,510