Question

Latona Hardware store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Latona Hardware showed cash of $5,000 and Common Stock of $5,000.

Enter the beginning cash and common stock balances and post the transactions.

Problem 5-2A Latona Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Latona Hardware Store showed Cash of $5,000 and Common Stock of $5,000. May 1 Purchased merchandise on account from Gray's Wholesale Supply $4,200, terms 2/10, 1/30. 2 Sold merchandise on account $2,100, terms 1/10, 1/30. The cost of the merchandise sold was $1,300 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 $2,100 on May 2. 10 Paid Gray's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $400 12 Purchased merchandise for cash $1,400. 15 Received refund for poor quality merchandise from supplier on cash purchase $150. 17 Purchased merchandise from Amland Distributors $1,300, FOB shipping point, terms 2/10, 1/30. 19 Paid freight on May 17 purchase $130. 24 Sold merchandise for cash $3,200. The merchandise sold had a cost of $2,000. 25 Purchased merchandise on account from Horvath, Inc. $620, FOB destination, terms 2/10, 1/30. 27 Paid Amland Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $30. 31 Sold merchandise on account $1,000, terms n/30. The cost of the merchandise sold was $560. Latona Hardware Store'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

Latona Hardware Store Journal entries Date Account 1-May Inventory Accounts Payable Credit Calculation Debit $ 4,200 $ 4,200 $ 2,100 $ 2,100 2-May Accounts Receivable Sales revenue 2-May Cost of goods sold Inventory $ 1,300 $ 1,300 $ 300 5-May Accounts Payable Inventory $ 300 9-May Cash Sales Discounts Accounts Receivable $ $ 2,079 21 =2,100-21 =2,100*1% $ 2,100 $ 3,900 10-May Accounts Payable Cash Inventory $ $ 3,822 78 -4,200-300 =3,900-78 =3,900*2% $ 400 11-May Supplies Cash $ 400 $ 1,400 12-May Inventory Cash $ 1,400 $ 150 15-May Cash Inventory 150 $ 1,300 17-May Inventory Accounts Payable $ 1,300 $ 130 19-May Inventory Cash $ 130 $ 3,200 $ 3,200 24-May Cash Sales revenue 24-May Cost of goods sold Inventory $ 2,000 $ 2,000 $ 620 25-May Inventory Accounts Payable $ 620 $ 1,300 27-May Accounts Payable Cash Inventory $ $ 1,274 26 =1,300-26 =1,300*2% $ 70 $ 70 29-May Sales Returns & Allowances Cash 29-May Inventory Cost of goods sold $ 30 $ 30 $ 1,000 $ 1,000 31-May Accounts Receivable Sales revenue 31-May Cost of goods sold Inventory $ 560 $ 560

Credit Balance Credit Balance J1 Latona Hardware Store T Accounts Date Explanation Ref Debit Cash 1-May Balance V $ 5,000 9-May J1 $ 2,079 10-May 11-May 12-May 15-May $ 150 19-May 24-May J1 $ 3,200 27-May 29-May $ 1,300 $ 300 $ 78 $ 150 $ 5,000 $ 7,079 $ 3,822 $ 3,257 $ 400 $ 2,857 $ 1,400 $ 1,457 $ 1,607 $ 130 $ 1,477 $ 4,677 $ 1,274 $ 3,403 $ 70 $ 3,333 $ 3,333 $ 3,333 $ 3,333 Date Explanation Ref Debit Inventory 1-May Ji $ 4,200 2-May 5-May 10-May 12-May $ 1,400 15-May 17-May J1 $ 1,300 19-May J1 $ 130 24-May 25-May u1 $ 620 27-May 29-May J1 $ 30 31-May Supplies 11-May J1 $ 400 $ 4,200 $ 2,900 $ 2,600 $ 2,522 $ 3,922 $ 3,772 $ 5,072 $ 5,202 $3,202 $ 3,822 $ 3,796 $ 3,826 $ 3,266 $ 2,000 $ 26 $ 560 Accounts Receivable ji $2,100 2-May 9-May 31-May $ 2,100 $ 2,100 $ - $ 1,000 $ $ $ 400 400 400 $ 4,200 Ji $ 1,000 Accounts Payable J1 Ji $ 300 Ji $ 3,900 J1 Common Stock 1-May Balance 1-May 5-May 10-May 17-May 25-May 27-May $ 5,000 $ 4,200 $ 3,900 $ - $ 1,300 $ 1,920 $ 620 $5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 1,300 $ 620 J1 $ 1,300 Sales revenue 2-May 24-May 31-May $ 2,100 $ 3,200 $1,000 $ 2,100 $ 5,300 $ 6,300 $ 6,300 Cost of goods sold 2-May J1 $ 1,300 24-May J1 $ 2,000 29-May 31-May J1 $ 560 Sales Returns & Allowances 29-May J1 $ 70 $ 1,300 $ 3,300 $ 3,270 $ 3,830 J1 $ 30 Sales Discounts J1 $ 9-May 21 $ 21 $ 70

Latona Hardware Store Account Names Cash Accounts Receivable Inventory Supplies Accounts Payable Common Stock Sales Revenue Sales Returns & Allowances Sales Discounts Cost of Goods Sold Totals Trial Balance Debit Credit 3,333 1,000 3,266 400 620 5,000 6,300 70 3,830 11,920 11,920