Question

Koala Ltd. closes its books and prepares a financial statement at the end of each month. Koala Ltd. uses the perpetual inventory system. Journalize the following transactions for August 2019.
*Koala Ltd. sold inventory on account to P. Pyatt on August 2 and collected in full on August 12. P. Pyatt indicated that the shipment was incomplete and arranged with Koala Ltd. to have the goods shipped to P. Pyatt. in September. The cost of these goods was $71

1- Issued cheque no.682 for August office rent, $1200. (debit Rent expense)
2- Issued cheque no. 683 to pay salaries of $1620, which includes salaries payable of $465 from Jul31. Koala Ltd. does not use reversing entries.
2*-Issued invoice no. 503 for sale on account to P. Pyatt, $300. Koala Ltd's cost of this merchandise was $95
3- Purchased inventory on credit terms of 1/15, net60 from Bear Ltd. $700. The invoice was dated August 3
4- Sold inventory for cash, $1165, (cost $552)
5- Received from Panda Inc. merchandise that had been sold earlier for $275 (cost $87). The wrong merchandise had been sent.
5- Issued cheque no. 684 purchase supplies for Cash, $390
6- Collected interest revenue of $550
7- Issued cheque no. 504 for sale on account to B.Morrison Inc., $1200. (cost $380)
8- Issued cheque no. 685 to pay Yeti Corp. $1300 of the amount owed at Jul 31. This payment occurred after the end of this discount period.
11- Issued cheque no. 686 to pay Bear Ltd. The net amount from August 3,
12*- Received cash from P.Pyatt in full settlement of her account from August 2. P.Pyatt notified Koala Ltd. that only 1/4 of the goods had been received, but agreed to pay now if Koala Ltd. held the remaining goods until next September.
16- Issued cheque no.687 to pay salary expense of $620
19- Purchased inventory for cash, $425, issuing cheque no.688
22- Purchased furniture on credit terms of 3/15, net 60 from Dam Corp., $255. The invoice was dated August 22.
23- Sold inventory on account to Kangaroo Corp., issuing invoice no. 505 for $4983 (cost $1576)
24- Received $2193 of the July 31 amount receivable from B.Morrison Inc, after the end of the discount period
25- Issued cheque no. 689 to pay $1216 in utilities
26- Purchased supplies on credit terms of 2/10, net 30 from Yeti Corp, $90. The invoice was dated August 26.
30- Returned damaged inventory to company from whom Koala Ltd. made the cash purchase on August 19, receiving cash of $425
30- Granted a sales allowance of $88 to B.Morrison Inc.
31- Purchased inventory on credit terms of 1/10, net 30 from Tulip Supply Ltd, $5165. The invoice was dated August 31.
31- Issued cheque no.690 to Adrian Koala, owner of Koala Ltd., for $850

Answer 1

1). On Aug 1^st 2019

Rent expense A/c                    Dr. $1,200

        To Bank A/c                                           Cr. $1,200

(Being cheque no. 682 paid for rent expense)

2). On Aug 2^nd 2019

Salary payable A/c                  Dr. $465

Salary expense A/c                 Dr. $1,155

                To Bank A/c                                   Cr. $1,620

(Being salary paid)

3). On 2^nd Aug 2019

Accounts receivable A/c                     Dr. $300

                To Sales A/c                                               Cr. $300

(Being sales made)

COGS A/c                   Dr. $95

       To Inventory A/c                         Cr. $95

(Being inventory sold)

4). On 3^rd Aug, 2019

Inventory A/c                                     Dr. 700

         To Discount received A/c                                  Cr. $7

         To Accounts payable A/c                                  Cr. $693

(Being goods purchased at 1/15 net 60 terms)

Note:

Discount = $700*1%

                = $7

5). On 4^th Aug, 2019

Cash A/c                                             Dr. 1,165

      To Accounts receivable A/c                                 Cr. $1,265

(Being goods sold for cash)

COGS A/c                   Dr. $552

     To Inventory A/c                           Cr. $552

(Being goods sold)

5). On 5^th Aug, 2019

Sales return A/c                                  Dr. $275

         To Accounts receivable A/c                              Cr. $275

(Being goods return)

Inventory A/c              Dr. $87

      To COGS A/c                               Cr. $87

(Being goods return)

5). On 5^th Aug 2019

Supplies A/c                Dr. 390

        To Bank A/c                               Cr. $390

(Being supplies purchased)

6). On 6^th Aug 2019

Cash A/c                                 Dr. $550

       To Interest revenue A/c                           Cr. $550

(Being interest received)

7). On 7^th Aug 2019

Accounts receivable A/c                     Dr. $1,200

                To Sales A/c                                               Cr. $1,200

(Being sales made)

COGS A/c                   Dr. $380

       To Inventory A/c                         Cr. $380

(Being inventory sold)

8). On 8^th Aug 2019

Accounts payable A/c             Dr. $1,300

            To Bank A/c                                       Cr. $1,300

(Being payment made to Yeti Corp.)

9). On 11^th Aug 2019

Accounts payable A/c                         Dr. 693

         To Bank A/c                                                      Cr. $693

(Being payment made to Bear Ltd)

10). On 12^th Aug 2019

Cash A/c                                             Dr. $300

     To Accounts receivable A/c                                  Cr. $300

(Being cash received in full settlement)

11). On 16^th Aug 2019

Salary expense A/c                 Dr. $620
           To Bank A/c                                        Cr. $620

(Being cheque issued for salary)

12). On 19^th Aug 2019

Inventory A/c                          Dr. $425

       To Bank A/c                                            Cr. $425

(Being inventory purchase)

13). On 22^nd Aug 2019

Furniture A/c                                      Dr. $255

To Discount received A/c                              Cr. $7.65

             To Accounts payable A/c                              Cr. $247.35

(Being furniture purchased at 3% discount)

Note:

Discount = $255*3%

                = $7.65

14). On 23^rd Aug 2019

Accounts receivable A/c                     Dr. $4,983

                To Sales A/c                                               Cr. $4,983

(Being sales made to Kangaroo corp.)

COGS A/c                   Dr. $1,576

       To Inventory A/c                         Cr. $1,576

(Being inventory sold)

15). On 25^th Aug 2019

Utilities A/c                Dr. $1,216

        To Bank A/c                               Cr. $1,216

(Being bill of utilities paid)

16). On 26^th Aug 2019

Supplies A/c                                        Dr. $90

         To Discount received A/c                                  Cr. $1.80

         To Accounts payable A/c                                  Cr. $88.20

(Being supplies purchased on 2% discount)

Note:

Discount = $90*2%

               = $1.80

17). On 30^th Aug 2019

Cash A/c                     Dr. $425

      To Inventory A/c                          Cr. $425

(Being damaged goods return)

18). On 30^th Aug 2019

Sales Allowance A/c                           Dr. $88

           To Accounts receivable A/c                            Cr. $88

(Being sales allowance provided to B. Morrison Inc)

19). On 31^st Aug 2019

Inventory A/c                                      Dr. $5,165

           To Discount received A/c                                Cr. $51.65

           To Accounts payable A/c                                Cr. $5,113.35

(Being inventory purchased at 1% discount)

Note:

Discount = $5,165*1%

                = $51.65

20). On 31^st Aug 2019

Accounts payable A/c             Dr. $850

         To Bank A/c                                          Cr. $850

(Being cheque issued to Koala Ltd’s Owner)