The following were selected from among the transactions completed by Babcock Company during November of the current year:

The following were selected from among the transactions completed by Babcock Company during November of the current year:

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 the merchandise 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 merchandise 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 merchandise 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. The cost of the merchandise 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. 

Instructions

Journalize the transactions.

Answer:

 Nov. 3 Merchandise Inventory62,475

Accounts Payable—Moonlight Co.62,475

[$85,000 – ($85,000 × 25%)] = $63,750

[$63,750 – ($63,750 × 2%)]

4 Cash37,680

Sales37,680

4 Cost of Merchandise Sold 22,600

Merchandise Inventory22,600

5 Merchandise Inventory47,360

Accounts Payable—Papoose Creek Co. 47,360

 [$47,500 – ($47,500 × 2%) + $810]

6 Accounts Payable—Moonlight Co. 13,230

Merchandise Inventory13,230

 [$13,500 – ($13,500 × 2%)]

8 Accounts Receivable—Quinn Co. 15,600

Sales15,600

8 Cost of Merchandise Sold 9,400

Merchandise Inventory9,400

13 Accounts Payable—Moonlight Co. 49,245

Cash49,245

 ($62,475 – $13,230)

14 Cash236,000

Sales236,000

14 Cost of Merchandise Sold 140,000

Merchandise Inventory140,000

15 Accounts Payable—Papoose Creek Co. 47,360

Cash47,360

23 Cash15,600

Accounts Receivable—Quinn Co.15,600

 Nov. 24 Accounts Receivable—Rabel Co. 56,331

Sales56,331

[$56,900 – ($56,900 × 1%)]

24 Cost of Merchandise Sold 34,000

Merchandise Inventory34,000

28 Credit Card Expense3,540

Cash3,540

30 Customer Refunds Payable 6,000

Cash6,000

30 Merchandise Inventory3,300

Estimated Returns Inventory3,300