Question

The following were selected from among the transactions completed by Theisen Company during December of the current year: Dec. 3. Purchased merchandise on account from Shipley Co., list price $480,000, trade discount 25%, terms FOB shipping point, 2/10, n/30, with prepaid transportation costs of $122,500 added to the invoice.

5. Purchased merchandise on account from Kirch Co., $100,250, terms FOB destination, 2/10, n/30.

6. Sold merchandise on account to Murdock Co., list price $360,000, trade discount 35%, terms 2/10, n/30. The cost of the merchandise sold was $160,250.

7. Returned $20,800 of merchandise purchased on December 5 from Kirch Co.

13. Paid Shipley Co. on account for purchase of December 3, less discount.

15. Paid Kirch Co. on account for purchase of December 5, less return of December 7 and discount.

16. Received cash on account from sale of December 6 to Murdock Co., less discount.

19. Sold merchandise on MasterCard, $780,500. The cost of the merchandise sold was $460,700. 22. Sold merchandise on account to Milk River Co., $220,300, terms 2/10, n/30. The cost of the merchandise sold was $120,700.

23. Sold merchandise for cash, $340,680. The cost of the merchandise sold was $180,100.

28. Received merchandise returned by Milk River Co. from sale on December 22, $40,000. The cost of the returned merchandise was $20,100.

31. Paid MasterCard service fee of $20,050.

Journalize the transactions.

Answer 1

Journal Entries:

Date	Account Titles and Explanations	Debit	Credit
Dec. 3	Merchandise Inventory {$480,000 - ($480,000*25/100) + $122,500}	$482,500
	Accounts Payable - Shipley Co.		$482,500
	(To record purchase of merchandise inventory on account from Shipley Co.)
Dec. 5	Merchandise Inventory	$100,250
	Accounts Payable - Kirch Co.		$100,250
	(To record the purchase of merchandise inventory on account from Kirch Co.)
Dec. 6	Accounts Receivable - Murdock Co. {$360,000 - ($360,000*35/100)}	$234,000
	Sales Revenue		$234,000
	(To record the sale of merchandise on account to Murdock Co.)
Dec. 6	Cost of Goods Sold	$160,250
	Merchandise Inventory		$160,250
	(To record the cost of goods sold)
Dec. 7	Accounts Payable - Kirch Co.	$20,800
	Merchandise Inventory		$20,800
	(To record the return of merchandise purchased from Kirch Co. on Dec. 5)
Dec. 13	Accounts Payable - Shipley Co.	$482,500
	Discount Received ($482,500*2/100)		$9,650
	Cash ($482,500 - $9,650)		$472,850
	(To record the payment to Shipley Co. for the merchandise purchased on account)
Dec. 15	Accounts Payable - Kirch Co. ($100,250 - $20,800)	$79,450
	Discount Received ($79,450*2/100)		$1,589
	Cash ($79,450 - $1,589)		$77,861
	(To record the payment to Kirch Co. for the merchandise purchased on account)
Dec. 16	Cash ($234,000 - $4,680)	$229,320
	Discount Allowed ($234,000*2/100)	$4,680
	Accounts Receivable - Murdock Co.		$234,000
	(To record the receipt of cash on account from sale of December 6)
Dec. 19	Cash	$780,500
	Sales Revenue		$780,500
	(To record the sale of merchandise on MasterCard)
Dec. 19	Cost of Goods Sold	$460,700.22
	Merchandise Inventory		$460,700.22
	(To record the cost of goods sold)
Dec. 22	Accounts Receivable - Milk River Co.	$220,300
	Sales Revenue		$220,300
	(To record the sale of merchandise inventory on account to Milk River Co.)
Dec. 22	Cost of Goods Sold	$120,700
	Merchandise Inventory		$120,700
	(To record the cost of goods sold)
Dec. 23	Cash	$340,680
	Sales Revenue		$340,680
	(To record the sale of merchandise on Cash)
Dec. 23	Cost of Goods Sold	$180,100
	Merchandise Inventory		$180,100
	(To record the cost of goods sold)
Dec. 28	Sales Returns and Allowances	$40,000
	Accounts Receivable - Milk River Co.		$40,000
	(To record the return of merchandise sold to Milk River on account)
Dec. 28	Merchandise Inventory	$20,100
	Cost of Goods Sold		$20,100
	(To record cost of merchandise sold that was returned)
Dec. 31	Credit Card Expense	$20,050
	Cash		$20,050
	(To record the payment of MasterCard service fees by cash)