The following selected transactions were completed by Green Lawn Supplies Co., which sells irrigation supplies primarily to wholesalers

The following selected transactions were completed by Green Lawn Supplies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers:

July

 1. Sold merchandise on account to Landscapes Co., $33,450, terms FOB shipping point, n/eom. The cost of merchandise sold was $20,000.

 2. Sold merchandise for $86,000 plus 8% sales tax to retail cash customers. The cost of merchandise sold was $51,600.

 5. Sold merchandise on account to Peacock Company, $17,500, terms FOB destination, 1/10, n/30. The cost of merchandise sold was $10,000.

  8. Sold merchandise for $112,000 plus 8% sales tax to retail customers who used VISA cards. The cost of merchandise sold was $67,200.

 13. Sold merchandise to customers who used MasterCard cards, $96,000. The cost of merchandise sold was $57,600.

 14. Sold merchandise on account to Loeb Co., $16,000, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $9,000.

 15. Received check for amount due from Peacock Company for sale on July 5.

 16. Issued credit memo for $3,000 to Loeb Co. for merchandise returned from sale on July 14. The cost of the merchandise returned was $1,800.

 18. Sold merchandise on account to Jennings Company, $11,350, terms FOB shipping point, 2/10, n/30. Paid $475 for freight and added it to the invoice. The cost of merchandise sold was $6,800.

 24. Received check for amount due from Loeb Co. for sale on July 14 less credit memo of July 16.

 28. Received check for amount due from Jennings Company for sale of July 18.

 31. Paid Black Lab Delivery Service $8,550 for delivery of merchandise in July to customers under shipping terms of FOB destination.

 31. Received check for amount due from Landscapes Co. for sale of July 1.

Aug.

 3. Paid Hays Federal Bank $3,770 for service fees for handling MasterCard and VISA sales during July.

 10. Paid $41,260 to state sales tax division for taxes owed on sales.

Instructions

Journalize the entries to record the transactions of Green Lawn Supplies Co.

Answer:

July 1 Accounts Receivable—Landscapes Co. 33,450

Sales33,450

1 Cost of Merchandise Sold 20,000

Merchandise Inventory20,000

2 Cash92,880

Sales 86,000

Sales Tax Payable6,880

2 Cost of Merchandise Sold 51,600

Merchandise Inventory51,600

5 Accounts Receivable—Peacock Company 17,325

Sales17,325

[$17,500 – ($17,500 × 1%)]

5 Cost of Merchandise Sold 10,000

Merchandise Inventory10,000

8 Cash120,960

Sales 112,000

Sales Tax Payable8,960

8 Cost of Merchandise Sold 67,200

Merchandise Inventory67,200

13 Cash96,000

Sales 96,000

13 Cost of Merchandise Sold 57,600

Merchandise Inventory57,600

14 Accounts Receivable—Loeb Co. 15,840

Sales15,840

[$16,000 – ($16,000 × 1%)]

14 Cost of Merchandise Sold 9,000

Merchandise Inventory9,000

15 Cash17,325

Accounts Receivable—Peacock Company 17,325

July 16 Customer Refunds Payable 2,970

Accounts Receivable—Loeb Co.2,970

[$3,000 – ($3,000 × 1%)]

16 Merchandise Inventory1,800

Estimated Returns Inventory 1,800

18 Accounts Receivable—Jennings Company 11,123

Sales11,123

[$11,350 – ($11,350 × 2%)]

18 Accounts Receivable—Jennings Company 475

Cash475

18 Cost of Merchandise Sold 6,800

Merchandise Inventory6,800

24 Cash ($15,840 – $2,970) 12,870

Accounts Receivable—Loeb Co.12,870

28 Cash ($11,123 + $475) 11,598

Accounts Receivable—Jennings Company 11,598

31 Delivery Expense8,550

Cash8,550

31 Cash33,450

Accounts Receivable—Landscapes Co. 33,450

 Aug. 3 Credit Card Expense3,770

Cash3,770

10 Sales Tax Payable41,260

Cash41,260