The series of five transactions recorded in the following T accounts were related to a sale to a customer on account and the receipt of the amount owed

The series of five transactions recorded in the following T accounts were related to a sale to a customer on account and the receipt of the amount owed. Briefly describe each transaction.

Cash Notes Receivable (e) 76,500(c) 75,000 (d) 75,000 Accounts Receivable Cost of Goods Sold (a) 75,000 (c) 75,000 (b) 45,000 (d) 75,400 (b) 75,400 InventoryInterest Revenue (b) 45,000(d) 400 (e) 1,100 Sales (a) 75,000

Answer:

a. Sale on account.

b. Cost of goods sold for the sale on account.

c. Note received from customer on account.

d. Note dishonored and charged face value of note plus interest to customer’s account receivable.

e. Payment received from customer for dishonored note plus interest earned after due date.

The debits and credits for four related entries for a sale of $15,000, terms 1/10, n/30, are presented in the following T accounts

The debits and credits for four related entries for a sale of $15,000, terms 1/10, n/30, are presented in the following T accounts. Describe each transaction.

Cash

(5) 13,860 | 

Sales

(1) 14,850

Cost of Merchandise Sold

(2) 8,800

Answer:

(1) Sold merchandise on account for $14,850, $15,000 less discount of 1%.

(2) Recorded the cost of the merchandise sold and reduced the merchandise inventory account, $8,800.

(3) Accepted a return of merchandise of $1,000 and issued a credit memo of $990, which is $1,000 less the 1% discount.

(4) Updated the merchandise inventory account for the cost of the merchandise returned, $575.

(5) Received the balance due within the discount period of $13,860; sale of $14,850 less the return of $990.

The supplies and supplies expense accounts at February 28, after adjusting entries have been posted at the end of the first year of operations

The supplies and supplies expense accounts at February 28, after adjusting entries have been posted at the end of the first year of operations, are shown in the following T accounts:

Supplies
Bal. 690 |

Supplies Expense
Bal. 4,110 |

Determine the amount of supplies purchased during the year.


Answers:
$4,800 ($690 + $4,110)