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Financial And Managerial Accounting

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter5: Accounting For Retail Businesses

Section: Chapter Questions

Problem 34E

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Question

Journalize the following transactions using periodic inventory method

Problem:
The transactions for the month of June. Use markup on sales of 20% for profit.
June 1 Purchased merchandise from Ariva Marketing, list price, P 35,000, trade discount 20%
terms: 2/10, n/30, FOB Shipping point, freight prepaid, 1200.
June 3 Purchased merchandise from Montage Trading P17,500, terms 2/10, n/30, FOB
destination.
June 5 Sold merchandise on credit to Alice Enterprise, P6,250, terms: 2/10, n/30, FOB shipping
point, freight prepaid, P450. Mark up on sales 20%.
June 7 Returned defective merchandise to Montage Trading P1,500.
June 9 Sold merchandise to Town Sales Company, P9,750, terms: 1/10, n/30, FOB destination.
June 9 Paid freight costs on shipment to Town Sales Company, P550.
June 11 Paid Ariva Marketing, the invoice of June 1 less discount.
June 11 Received defective merchandise returned by Town Sales Co., P800.
June 11 Paid Montage Trading the invoice of June 3 in full.
June 11 Sold merchandise to Oscar Toledo, P6,550, terms: 2/10, n/30, FOB destination, freight
prepaid, P480.
June 11 Received a check from Alice Enterprise in full payment of account.
June 17 Bought merchandise from Super Mart Company, P27,500, terms: n/30, FOB shipping
point.
June 17 Paid transportation charges on merchandise purchased from Super Mart Company,
P1,050.
June 18 Sold merchandise to Solomon Company, P8,750, terms: 1/10, n/30, FOB shipping point,
freight prepaid, P650.
June 18 Received check from Town Sales Company in full payment of account.
June 19 Purchased merchandise from Manila Trading P11,400, terms : 2/10, n/30, FOB
destination.
June 19 Received a check of P2,000 from Oscar Toledo as partial payment of account.
June 20 Receive allowance for price adjustment for defective merchandise from Manila Trading,
P1,400.
June 25 Paid P10,000 to Super Mart Company as partial payment of account.
June 25 Sold merchandise to Solo Marketing, P3,250, terms: 2/10 n/30, FOB shipping point.
June 26 Granted price adjustment allowance for defective merchandise sold to Solo Marketing,
P350.
June 26 Paid Super Mart Company the invoice of June 17 in full.
June 30 Received check from Solomon Company in full payment of account.
June 30 Paid Manila Trading the invoice of June 20 in full.

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The following transactions were completed by Nelsons Boutique, a retailer, during July. Terms of sales on account are 2/10, n/30, FOB shipping point. July 3Received cash from J. Smith in payment of June 29 invoice of 350, less cash discount. 6Issued Ck. No. 1718, 742.50, to Designer, Inc., for invoice. no. 2256, recorded previously for 750, less cash discount of 7.50. July 9Sold merchandise in the amount of 250 on a credit card. Sales tax on this sale is 6%. The credit card fee the bank deducted for this transaction is 5. 10Issued Ck. No. 1719, 764.40, to Smart Style, Inc., for invoice no. 1825, recorded previously on account for 780. A trade discount of 25% was applied at the time of purchase, and Smart Style, Inc.s credit terms are 2/10, n/30. 12Received 180 cash in payment of June 20 invoice from R. Matthews. No cash discount applied. 18Received 1,575 cash in payment of a 1,500 note receivable and interest of 75. 21Voided Ck. No. 1720 due to error. 25Received and paid utility bill, 152; Ck. No. 1721, payable to City Utilities Company. 31Paid wages recorded previously for the month, 2,586, Ck. No. 1722. Required 1. Journalize the transactions for July in the cash receipts journal, the general journal (for the transaction on July 9th), or the cash payments journal as appropriate. Assume the periodic inventory method is used. 2. If you are using Working Papers, total and rule the journals. Prove the equality of debit and credit totals.
Record journal entries for the following transactions of Barrera Suppliers. A. May 12: Sold 32 deluxe hammers at $195 each to a customer, credit terms 10/10, n/45, invoice date May 12; the deluxe hammers cost Barrera Suppliers $88 each. B. May 15: Customer returned 6 hammers for a full refund. The merchandise was in sellable condition at the original cost. C. May 20: Customer found 2 defective hammers but kept the merchandise for an allowance of $200. D. May 22: Customer paid their account in full with cash.
The following transactions were completed by Nelsons Hardware, a retailer, during September. Terms on sales on account are 1/10, n/30, FOB shipping point. Sept. 4Received cash from M. Alex in payment of August 25 invoice of 275, less cash discount. 7Issued Ck. No. 8175, 915.75, to Top Tools, Inc., for invoice. no. 2256, recorded previously for 925, less cash discount of 9.25. 10Sold merchandise in the amount of 175 on a credit card. Sales tax on this sale is 8%. The credit card fee the bank deducted for this transaction is 5. 11Issued Ck. No. 8176, 653.40, to Snap Tools, Inc. for invoice no. 726, recorded previously on account for 660. A trade discount of 15% was applied at the time of purchase, and Snap Tools, Inc.s credit terms are 1/10, n/45. 15Received 95 cash in payment of August 20 invoice from N. Johnson. No cash discount applied. 19Received 1,165 cash in payment of a 1,100 note receivable and interest of 65. 22Voided Ck. No. 8177 due to error. 26Received and paid telephone bill, 62; Ck. No. 8178, payable to Southern Telephone Company. 30Paid wages recorded previously for the month, 3,266, Ck. No. 8179. Required 1. Journalize the transactions for September in the cash receipts journal, the general journal (for the transaction on Sept. 10th), or the cash payments journal as appropriate. Assume the periodic inventory method is used. 2. If you are using Working Papers, total and rule the journals. Prove the equality of debit and credit totals.

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