Question

289 SHOW ME HOW Obj. 2 Chapter 5 Accounting for Retail Business PR 5-3B Sales and purchase-related transactions using perpetual inventory system The following were selected from among the transactions completed by Essex Company during July of the current year: July 3. Purchased merchandise on account from Hamling Co., list price $72,000, trade discount 15%, terms FOB ship- ping point, 2/10, n/30, with prepaid freight of $1.450 added to the invoice. 5. Purchased merchandise on account from Kester Co., $33,450, terms FOB destination, 2/10,n/30. 6. Sold merchandise on account to Parsley Co., $36,000, terms /15. The cost of the goods sold was $25,000 7. Returned merchandise with an invoice amount of $6,850 purchased on July 5 from Kester Co. 13. Paid Hamling Co. on account for purchase of July 3. 15. Paid Kester Co. on account for purchase of July 5, less return of July 7. 21. Received cash on account from sale of July 6 to Parsley Co. 21. Sold merchandise on MasterCard, $108,000. The cost of the goods sold was $64,800. 22. Sold merchandise on account to Tabor Co., $16,650, terms 2/10, 1/30. The cost of the goods sold was $10,000. 23. Sold merchandise for cash, $91,200. The cost of the goods sold was $55,000. 28. Paid Parsley Co. a cash refund of $7,150 for returned merchandise from sale of July 6. The cost of the returned merchandise was $4,250. 31. Paid MasterCard service fee of $1,650. Instructions Journalize the transactions.

Answer 1

Please hit LIKE button if this helped. Credit Date July Debit $ 62,650 $ 62,650 Account 3 Merchandise Inventory Accounts Payable-Hamling Co. (To record purchase of inventory) [$72,000 -($72,000 x 15%)] = $61,200 $61,200 + $1,450 = $62,650. $ 33,450 5 Merchandise Inventory Accounts Payable-Kester Co. $ 33,450 $ 36,000 6 Accounts Receivable-Parsley Co. Sales $ 36,000 $ 25,000 6 Cost of Merchandise Sold Merchandise Inventory $ 25,000 $ 6,850 7 Accounts Payable-Kester Co. Merchandise Inventory $ 6,850 $ 62,650 13 Accounts Payable-Hamling Co. Cash Merchandise Inventory ($61,200*2%) $ 61,426 $ 1,224 15 $ 26,600 Accounts Payable-Kester Co. Cash Merchandise Inventory ($26,600*2%) $ 26,068 $ 532 21 $ 36,000 Cash Accounts Receivable-Parsley Co. $ 36,000 21 $ 108,000 Cash Sales $ 108,000 21 $ 64,800 Cost of Merchandise Sold Merchandise Inventory $ 64,800

22 $ 16,650 Accounts Receivable-Tabor Co. Sales $ 16,650 $ 10,000 22 Cost of Merchandise Sold Merchandise Inventory $ 10,000 23 $ 91,200 Cash Sales $ 91,200 23 $ 55,000 Cost of Merchandise Sold Merchandise Inventory $ 55,000 $ 7,150 28 Sales Returns and Allowances Accounts Receivable-Tabor Co. $ 7,150 $ 4,250 28 Merchandise Inventory Cost of Merchandise Sold $ 4,250 $ 1,650 31 Credit Card Expense Cash $ 1,650