Question

Swifty Corporation completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Swifty Corporation showed Cash of $5,000 and Common Stock of $5,000.

May 1		Purchased merchandise on account from Gray's Wholesale Supply $4,100, terms 2/10, n/30.
2		Sold merchandise on account $2,400, terms 1/10, n/30. The cost of the merchandise sold was $1,400.
5		Received credit from Gray's Wholesale Supply for merchandise returned $300.
9		Received collections in full, less discounts, from customers billed on sales of $2,400 on May 2.
10		Paid Gray's Wholesale Supply in full, less discount.
11		Purchased supplies for cash $300.
12		Purchased merchandise for cash $1,500.
15		Received refund for poor quality merchandise from supplier on cash purchase $200.
17		Purchased merchandise from Amland Distributors $1,400, FOB shipping point, terms 2/10, n/30.
19		Paid freight on May 17 purchase $100.
24		Sold merchandise for cash $3,300. The merchandise sold had a cost of $2,200.
25		Purchased merchandise on account from Horvath, Inc. $750, FOB destination, terms 2/10, n/30.
27		Paid Amland Distributors in full, less discount.
29		Made refunds to cash customers for defective merchandise $60. The returned merchandise had a fair value of $40.
31		Sold merchandise on account $1,500, terms n/30. The cost of the merchandise sold was $500.

Swifty Corporation ’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Answer 1

Answer: Accounts titles & Explanation Debit Credit Date May 1 Inventory 4,100 Accounts Payable 4,100 Accounts Receivable 2,400 May 2 Sales Revenue 2,400 Cost of Goods Sold May 2 1,400 Inventory 1,400 Accounts Receivable 300 May 5 Inventory 300 Cash May 9 2,376 Sales Discount 24 Accounts Receivable 2,400 Accounts Payable ($4,100 - $300) May 10 3,800 Cash 3,724 Purchase Discount ($3,800*2%) 76 Supplies Cash May 11 300 300 May 12 Inventory 1,500 Cash 1,500 Cash May 15 200 Inventory 200 May 17 Inventory Accounts Payable 1,400 1,400 Freight 100 May 19 Cash 100

Cash May 24 3,300 Sales Revenue 3,300 Cost of Goods Sold May 24 2,200 Inventory 2,200 May 25 Inventory Accounts Payable Accounts Payable 750 750 May 27 1,400 Cash 1,372 Purchase Discount 28 Refunds May 29 60 Cash 60 May 29 Inventory 40 Cost of Goods Sold 40 May 31 Accounts Receivable 1,500 Sales Revenue 1,500 Cost of Goods Sold May 31 500 Inventory 500