Question

1. Rackley Company completes these transactions and events during March of the current year (terms of all credit sales are 2/10,n/30, unless otherwise stated in the transaction): perpetual inventory system was adopted by Rackley Company in recording its inventory transactions. March 1 Received $87,200 of merchandise and an invoice dated March 1, terms 2/15, 1/30, from Fox Industries. 2. Sold merchandise on credit to Armand Leon. Invoice No. 854, for $33.600 (cost $16.800). 3. Purchased $2460 of office supplies on credit from Hilary Company, invoice dated March 3, terms 2/10, EOM. 3. Sold merchandise on credit to Kit Dean. Invoice No. 855. for $20.400 (cost. $11,600). 6. Borrowed $164,000 cash by giving Commerce Bank a long-term note payable. 9. Purchased S43,700 of office equipment on credit from Rose Supply, Invoice dated March 9. terms 3/10, EOM. 10. Sold merchandise on credit to Taylor Wood, Invoice No. 856, for $11.200 (cost, $5,800). 12. Received payment from Armand Leon for the March 2 sales less discount. 13. Sent Check No. 416 to Fox Industries in payment of the amount due on the March 1. invoice 13. With respect to the sale of March 3. received the amount due from Kit Dean. 13. Received $32,625 of merchandise and an invoice dated March 13, terms 2/10, 1/30, from the LR Company 15. Issuod Check No. 417, in payment of sales salaries for the first half of the month $18,000. 15. Cash sales for the first half of the month are $69.000 (cost is $40.400). 16. Purchased $1.700 of store supplies on credit from Hilary Company, invoice dated

Answer 1

Journal Entries - Perpetual Inventory Method:

Date	Account Titles and Explanations	Debit	Credit
Mar. 1	Merchandise Inventory	$87,200
	Accounts Payable - Fox Industries		$87,200
	(To record the purchase of merchandise inventory on account)
Mar. 2	Accounts Receivable - Armand Leon	$33,600
	Sales Revenue		$33,600
	(To record the sale made on account)
	Cost of Goods Sold	$16,800
	Merchandise Inventory		$16,800
	(To record the cost of goods sold)
Mar. 3	Office Supplies	$2,460
	Accounts Payable - Hilary Company		$2,460
	(To record the purchase of office supplies on account)
Mar. 3	Accounts Receivable - Kit Dean	$20,400
	Sales Revenue		$20,400
	(To record the sale made on account)
	Cost of Goods Sold	$11,600
	Merchandise Inventory		$11,600
	(To record the cost of goods sold)
Mar. 6	Cash	$164,000
	Long-term Notes Payable		$164,000
	(To record the cash borrowed by issuing long-term note)
Mar. 9	Office Equipment	$43,700
	Accounts Payable - Rose Supply		$43,700
	(To record the purchase of office equipment on account)
Mar. 10	Accounts Receivable - Taylor Wood	$11,200
	Sales Revenue		$11,200
	(To record the sale made on account)
	Cost of Goods Sold	$5,800
	Merchandise Inventory		$5,800
	(To record the cost of goods sold)
Mar. 12	Cash ($33,600 - $672)	$32,928
	Discount Allowed ($33,600*2/100)	$672
	Accounts Receivable - Armand Leon		$33,600
	(To record the collection of cash from credit sales)
Mar. 13	Accounts Payable - Fox Industries	$87,200
	Discount Received ($87,200*2/100)		$1,744
	Cash ($87,200 - $1,744)		$85,456
	(To record the payment for amount due on credit purchases)
Mar. 13	Cash	$20,400
	Accounts Receivable - Kit Dean		$20,400
	(To record the collection of cash from credit sales)
Mar. 13	Merchandise Inventory	$32,625
	Accounts Payable - LR Company		$32,625
	(To record the purchase of merchandise inventory on account)
Mar. 15	Salaries Expense	$18,000
	Cash		$18,000
	(To record the payment of sales salaries)
Mar. 15	Cash	$69,000
	Sales Revenue		$69,000
	(To record the cash sales)
	Cost of Goods Sold	$40,400
	Merchandise Inventory		$40,400
	(To record the cost of goods sold)
Mar. 16	Store Supplies	$1,700
	Accounts Payable - Hilary Company		$1,700
	(To record the purchase of store supplies on account)
Mar. 17	Accounts Payable - LR Company	$2,400
	Merchandise Inventory		$2,400
	(To record the return of merchandise inventory purchased on account)
Mar. 19	Accounts Payable - Rose Supply	$630
	Office Equipment		$630
	(To record the receipt of credit memorandum on purchase of office equipment on account)
Mar. 19	Accounts Payable - Rose Supply ($43,700 - $630)	$43,070
	Cash		$43,070
	(To record the payment for amount due on credit purchases)
Mar. 20	Cash	$11,200
	Accounts Receivable - Taylor Wood		$11,200
	(To record the collection of cash from credit sales)
Mar. 23	Accounts Payable - LR Company ($32,625 - $2,400)	$30,225
	Discount Received ($30,225*2/100)		$604.50
	Cash ($30,225 - $604.50)		$29,620.50
	(To record the payment for amount due on credit purchases)
Mar. 27	Accounts Receivable - Taylor Wood	$14,900
	Sales Revenue		$14,900
	(To record the sale made on account)
	Cost of Goods Sold	$7,000
	Merchandise Inventory		$7,000
	(To record the cost of goods sold)
Mar. 28	Accounts Receivable - Kit Dean	$6,300
	Sales Revenue		$6,300
	(To record the sale made on account)
	Cost of Goods Sold	$3,200
	Merchandise Inventory		$3,200
	(To record the cost of goods sold)
Mar. 31	Salaries Expense	$18,600
	Salaries Payable		$18,600
	(To record the salaries accrued)
Mar. 31	Cash	$30,000
	Sales Revenue		$30,000
	(To record the cash sales)
	Cost of Goods Sold	$16,000
	Merchandise Inventory		$16,000
	(To record the cost of goods sold)