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

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 shipping 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 n/15. The cost of the merchandise sold was $25,000.

  7. Returned $6,850 of merchandise 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 merchandise sold was $64,800.

 22. Sold merchandise on account to Tabor Co., $16,650, terms 2/10, n/30. The cost of the merchandise sold was $10,000.

 23. Sold merchandise for cash, $91,200. The cost of the merchandise 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:

July 3 Merchandise Inventory61,426

Accounts Payable—Hamling Co.61,426

[$72,000 – ($72,000 × 15%)] = $61,200

[$61,200 – ($61,200 × 2%)] + $1,450

5 Merchandise Inventory32,781

Accounts Payable—Kester Co.32,781

[$33,450 – ($33,450 × 2%)]

6 Accounts Receivable—Parsley Co. 36,000

Sales36,000

6 Cost of Merchandise Sold 25,000

Merchandise Inventory25,000

7 Accounts Payable—Kester Co. 6,713

Merchandise Inventory6,713

[$6,850 – ($6,850 × 2%)]

13 Accounts Payable—Hamling Co. 61,426

Cash61,426

15 Accounts Payable—Kester Co. 26,068

Cash26,068

($32,781 – $6,713)

21 Cash36,000

Accounts Receivable—Parsley Co.36,000

21 Cash108,000

Sales108,000

21 Cost of Merchandise Sold 64,800

Merchandise Inventory64,800

22 Accounts Receivable—Tabor Co. 16,317

Sales16,317

[$16,650 – ($16,650 × 2%)]

22 Cost of Merchandise Sold 10,000

Merchandise Inventory10,000

July 23 Cash91,200

Sales91,200

23 Cost of Merchandise Sold 55,000

Merchandise Inventory55,000

28 Customer Refunds Payable 7,150

Cash7,150

28 Merchandise Inventory4,250

Estimated Returns Inventory 4,250

31 Credit Card Expense1,650

Cash1,650