Question

ales and notes receivable transactions Chart of Accounts Journal Instructions The following were selected from among the transactions completed by Caldemeyer Co. during the current year Caldemeyer sells and installs home and business security systems Jan 3 Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8 % note Feb 10 Sold merchandise on account to Bradford & Co, $24,000. The cost of the goods sold was $14,400 Sold merchandise on account to Dry Creek Co, $60,000 The cost of goods sold was $54,000 13 Mar 12 Accepted a 60-day, 7 % note for $24,000 from Bradford & Co on account Accepted a 60-day, 9 % note for $60,000 from Dry Creek Co. on bccount 14 Apr. 3 Received the interest due from Trina Gelhaus and a new 120-day, 9 % note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account) May 11 Received from Bradford & Co the amount due on the note of March 12 Dry Creek Co dishonpred its note dated March 14) 13 July 12 Received from Dry Creek Co the amount owed on the dishonored note plus interest for 60 days at 12% computed on the maturity value of the note Aug 1 Received from Trina Gehaus the amount due on her note of April 3 Ocdt 5 Sold merchandise on account, termi2/10 n/30, to Haloran Co $13,500 Record the sale net of the 2% discount The cost of goods sold was $8.100

Accepted a 60-day, 7% note for $24,000 from Bradford & Co. on account Mar. 12 Accepted a 60-day, 9% note for $60,000 from Dry Creek Co. on account. 14 Apr. 3 Received the interest due from Trina Gelhaus and a new 120-day, 9 % note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account) Received from Bradford & Co. the amount due on the note of March 12 May 11 Dry Creek Co. dishonored its note dated March 14. 13 Received from Dry Creek Co. the amount owed on the dishonored note. plus interest for 60 days at July 12 12% computed on the maturity value of the note. Received from Trina Gelhaus the amount due on her note of April 3 Aug. 1 Sold merchandise on account, terms 2/10, n/30, to Halloran Co $13.500 Record the sale net of the Oct. 5 2% discount The cost of goods sold was $8,100 Received from Halloran Co the amount of the invoice of October 5, less 2% discount 15 Journalize the entries to record the transections Refer to the Chant of Accounts for exect wording of account tites Assume a 360-day yE

apter 8 Hmwrk Book Calculator Print item Sales and notes receivable transactions structions Journal Joumal Jounalce the entres to record the transacttions Refer to the Chart of Accounts for exact wording of account se Assume a 360-day year Assume his a year in which February ha 20 days PAGE 0 JOURNAL ACCOUNTING EQUATION DTE DESCRIPTION POST REF CREDT ASSETS LIABUTIES DERIT EQUTY

Sales and notes receivable transactions stuctions Journal Joumal 11 12 13 14 15 16 17 19 20

pter & Hmwrk eBook Calculator Print Item Sales and notes receivable transactions nstructions Journal Journal 24 251 26 21 52

Answer 1

Journal Account Titles and Explanation No. Date Debit (S) Credit ($) 3-Jan 8% Notes Receivable 18,000 Cash 18,000 (To record the issuance of of note) 24,000 10-Feb Accounts receivable Sales 24.000 (To record the credit sales) Cost of goods sold 14,400 Inventory 14,400 (To record the cost of goods sold) 13-Feb Accounts receivable 60,000 60,000 Sales (To record the credit sales) Cost of goods sold 54,000 54,000 Inventory (To record the cost of goods sold) 12-Mar 7% Notes Receivable Accounts receivable (To record the acceptance of of note for payment due) 24,000 24,000 14-Mar 9 % Notes Receivable 60,000 60,000 Accounts receivable (To record the acceptance of of note for payment due) 3-Apr Cash (18000 8 % + 3 / 12 ) 360 360 Interest income (To record the interest received on notes) 9% Notes Receivable 18,000 8% Notes Receivable 18,000 (To record the renewal of note) 11-May Cash 24,280 Interest income (24000 7 % 2 / 12 ) 7% Notes Receivable 280 24,000 (To record the payment received from note) 13-May Accounts receivable 60,000 60,000 9% Notes Receivable (To record the dishonour of note) 12-Jul Cash 61,200 Accounts receivable 60.000 Interest income (60000 12 % 2 / 12 ) (To record the payment received form dishonoured note) 1,200 1-Aug Cash 18,540 Interest income (18000*9 % 4 / 12 ) 540 18,000 9% Notes Receivable (To record the payment received from note) 5-Oct Accounts receivable 13,500 Discount on sales (13500 2 %) 270 Since it is mentioned in the question to record the sales at 2 % discount Sales So we have reduced the sales amount by 29% 13,230 (To record the credit sales) Cost of goods sold Inventory (To record the cost of goods sold) 8,100 8,100 15-Oct Cash Discount on sales 13,230 270 Accounts receivable 13,500 (To record the payment received from credit sale)