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
