Question

Prepare journal entries to record the following merchandising transactions of Taylor's, which uses the perpe the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable-Walker.) Jul. 1 Purchased merchandise from Walker Company for $8,600 under credit terms of 1/15, 1/30, FOB shipping point, invoice dated July 1. Jul. 2 Sold merchandise to Perry Co. for $2,200 under credit terms of 2/10, 1/60, POB shipping point, invoice dated July 2. The merchandise had cost $1,320. Jul. 3 Paid $645 cash for freight charges on the purchase of July 1. Jul. Sold merchandise that had cost $2,600 for $4,300 cash. Jul. 9 Purchased merchandise from Ryan Co. for $3,500 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. Jul. 11 Received a $700 credit memorandum from Ryan Co. for the return of part of the merchandise purchased on July 9. Jul. 12 Received the balance due from Perry Co. for the invoice dated July 2, net of the discount. Jul. 16 Paid the balance due to Walker Company within the discount period. Jul. 19 Sold merchandise that cost $2,700 to Clinton Co. for $3,800 under credit terms of 2/15, n/60, TOB shipping point, invoice dated July 19. Jul. 21 Issued a $800 credit memorandum to clinton Co. for an allowance on goods sold on July 19. Jul. 24 Paid Ryan Co. the balance due, net of discount. Jul. 30 Received the balance due from Clinton Co. for the invoice dated July 19, net of discount. Jul. 31 Sold merchandise that cost $5,800 to Perry Co. for $9,600 under credit terms of 2/10, n/60, POB shipping point, invoice dated July 31. Requirement General Journal General Ledger Trial Balance Schedule of Receivables Schedule of Payables Income Statement Impact on Income Journalize the merchandising transactions. The General Ledger, trial balance, and schedules of accounts receivable and accounts payable will be updated based on your entries. View transaction list View journal entry worksheet No Date Jul 01 Credit Account Title Merchandise inventory Accounts payable. Walker Debit 8,600 8.600 2 Jul 02 Accounts payable. Perry 2.200

Answer 1

Solution of the above problem is as under:

Satement showing Journal Entries to record the merchandising transactions of Taylor's
S. No	Date	Account Tiltle	Debit ($)	Credit ($)
1	Jul-01	Merchandise Inventory A/c Dr.	8600
		To Accounts Payable-Walker A/c		8600
		(Being merchandise purchased on credit)
2	Jul-02	Accounts Receivable-Perry Co A/c Dr.	2200
		To Merchandise Inventory A/c		2200
		(Being merchandise sold on credit)
3	Jul-03	Freight Charges A/c Dr.	645
		To Cash A/c		645
		(Being freight charges paid in cash)
4	Jul-08	Cash A/c Dr.	4300
		To Merchandise Inventory A/c		4300
		(Being merchandise sold for cash)
5	Jul-09	Merchandise Inventory A/c Dr.	3500
		To Accounts Payable-Ryan Co. A/c		3500
		(Being merchandise purchased on credit)
6	Jul-11	Accounts Payable-Ryan Co A/c Dr	700
		To Merchandise Inventory A/c		700
		(Being purchases return recorded)
7	Jul-12	Cash A/c Dr	2156
		Discount A/c Dr	44
		To Accounts Receivable-Perry Co. A/c		2200
		(Being amount received from Perry co net of discount)
8	Jul-16	Accounts Payable-Walker A/c Dr	8600
		To Cash A/c		8514
		To Discount Received A/c		86
		(Being amount paid to Walker Co for the purchases made, net of discount)
9	Jul-19	Accounts Receivable-Clinton Co A/c Dr.	3800
		To Merchandise Inventory A/c		3800
		(Being merchandise sold on credit)
10	Jul-21	Merchandise Inventory A/c Dr.	800
		To Accounts Receivable-Clinton Co A/c		800
		(Being sales return recorded)
11	Jul-24	Accounts Payable-Ryan Co A/c Dr.	2800
		To Cash A/c		2744
		To Discount Received A/c		56
		(Being amount paid to Ryan Co net of discount)
12	Jul-30	Cash A/c Dr.	2940
		Dicount A/c Dr.	60
		To Accounts Receivable-Clinton Co A/c		3000
		(Being amount received from Clinton Co net of discount)
13	Jul-31	Accounts Receivables-Perry Co A/c Dr.	9600
		To Merchandise Inventory A/c		9600
		(Being merchandise sold on credit)

Taylor's Company
Partial Income Statement
For the Month Ended July 31,2017
Particulrs	Debit ($)	Credit ($)
Merchandise Purchased	12100
Purchases Return		700
Merchandise Sold		19900
Sales Return	800
Freight Inward	645
Gross Profit	7055
Total	20600	20600
Gross Profit Carried Forward		7055
Discount Allowed	104
Discount Received		142
Net Profit	7093
Total	7197	7197