Question

Pharoah Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Pharoahs’ ledger showed Cash of $8,700 and Common Stock of $8,700.

May 1		Purchased merchandise on account from Black Wholesale Supply for $8,700, terms 1/10, n/30.
2		Sold merchandise on account for $5,100, terms 2/10, n/30. The cost of the merchandise sold was $4,000.
5		Received credit from Black Wholesale Supply for merchandise returned $200.
9		Received collections in full, less discounts, from customers billed on May 2.
10		Paid Black Wholesale Supply in full, less discount.
11		Purchased supplies for cash $900.
12		Purchased merchandise for cash $3,700.
15		Received $230 refund for return of poor-quality merchandise from supplier on cash purchase.
17		Purchased merchandise from Wilhelm Distributors for $3,100, terms 2/10, n/30.
19		Paid freight on May 17 purchase $250.
24		Sold merchandise for cash $5,500. The cost of the merchandise sold was $4,100.
25		Purchased merchandise from Clasps Inc. for $800, terms 3/10, n/30.
27		Paid Wilhelm Distributors in full, less discount.
29		Made refunds to cash customers for returned merchandise $108. The returned merchandise had cost $122.
31		Sold merchandise on account for $1,280, terms n/30. The cost of the merchandise sold was $797.

Answer 1

Date	Account titles and Explanations					Debit	Credit
1-May	Merchandise inventory					8,700
	Accounts payable						8,700
2-May	Accounts receivable					5,100
	sales						5,100
	cost of goods sold					4,000
	Merchandise inventory						4,000
5-May	Accounts payable					200
	Merchandise inventory						200
9-May	Cash					4998
	Sales discount					102
	Accounts receivable						5,100
10-May	Accounts payable		(8700-200)			8,500
	Merchandise inventory						85
	Cash						8,415
11-May	Supplies					900
	cash						900
12-May	Merchandise inventory					3,700
	cash						3,700
15-May	Cash					230
	Merchandise inventory						230
17-May	Merchandise inventory					3,100
	Accounts payable						3,100
19-May	Merchandise inventory					250
	cash						250
24-May	cash					5,500
	sales						5,500
	cost of goods sold					4,100
	Merchandise inventory						4,100
25-May	Merchandise inventory					800
	Accounts payable						800
27-May	Accounts payable					3,100
	Merchandise inventory						62
	cash						3038
29-May	Sales return and allowance					108
	Cash						108
	merchandise inventory					122
	cost of goods sold						122
31-May	Accounts receivable					1,280
	sales						1,280
	cost of goods sold					797
	Merchandise inventory						797