Question

The following were selected from among the transactions completed by Babcock Company during November of the current year. Babcock uses the net method under a perpetual inventory system.

Nov. 3 Purchased merchandise on account from Moonlight Co., list price $85,000, trade discount 25%, terms FOB destination, 2/10, n/30.
4 Sold merchandise for cash, $37,680. The cost of goods sold was $22,600
5 Purchased merchandise on account from Papoose Creek Co., $47,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice.
6 Returned $13,500 ($18,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co.
8 Sold merchandise on account to Quinn Co., $15,600 with terms n/15. The cost of the goods sold was $9,400.
13 Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
14 Sold merchandise on VISA, $236,000. The cost of the goods sold was $140,000.
15 Paid Papoose Creek Co. on account for purchase of November 5.
23 Received cash on account from sale of November 8 to Quinn Co.
24 Sold merchandise on account to Rabel Co., $56,900, terms 1/10, n/30. Tje cost of the goods sold was $34,000.
28 Paid VISA service fee of $3,540
30 Paid Quinn Co. a cash refund of $6,000 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,300.

Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

al Chart of Accounts CHART OF ACCOUNTS Babcock Company General Ledger ASSETS REVENUE 110 Cash 410 Sales 121 Accounts Receivable-Quinn Co. 610 Interest Revenue 122 Accounts Receivable-Rabel Co EXPENSES 125 Notes Receivable 130 Inventory 131 Estimated Returns Inventory 510 Cost of Goods Sold 521 Delivery Expense

Answer 1

Date Account title Nov 3. Inventory Accounts payable - Moonlight Co. 85000*(1-0.25)*(1-0.02) Debit Credit 62475 62475 Nov 4. cash sales revenue 37680 37680 cost of goods sold Inventory 22600 22600 Nov 5. Inventory Accounts payable - Papoose Creek Co., 47500*(1-0.02)+810 47360 47360 13230 Nov 6. Accounts payable - Moonlight Co. Inventory 13500*(1-0.02) 13230 15600 Nov 8. Accounts Receivable-Quinn Co. sales revenue 15600 9400 cost of goods sold Inventory 9400 49245 Nov 13. Accounts payable - Moonlight Co. cash (62475-13230) 49245

Credit Date Account title Nov 14. cash sales revenue Debit 236000 236000 cost of goods sold Inventory 140000 140000 47360 Nov 15. Accounts payable - Papoose Creek Co., cash 47360 15600 Nov 23. cash Accounts Receivable-Quinn Co. 15600 56331 Nov 24. cash sales revenue 56900*(1-0.01) 56331 34000 cost of goods sold Inventory 34000 3540 Nov 28. credit card expense cash 3540 6000 Nov 30. Customer Refunds Payable cash 6000 3300 Inventory Estimated Returns Inventory 3300