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 erchandise 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.InstructionsJournalize the transactions.

Question
Asked Dec 10, 2019
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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 erchandise 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.

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Expert Answer

Step 1

Following are the journal entries:

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Account Title and Explanation Merchandise Inventory Account Debit $72,000– ($72,000×15%)]+$1,450 To Account Payable – H's Company Account | (Being to record purchase of inventory on account) Credit ($) Debit (S) 62,650 Date Ref. 3-July 62,650 5-July Merchandise Inventory Account Debit To Account Payable – K's Company Account | (Being to record purchase of inventory on account) 33,450 33,450 6-July | Account Receivable-P's Company Account Debit 36,000 To Sales Account (Being to record sale of inventory on account) 36,000 6-July | Cost of Merchandise sold Account Debit To Merchandise Inventory Account | (Being to record cost of goods sold) 25,000 25,000 7-July Account Payable – K's Company Account Debit To Merchandise Inventory Account | (Being to record return of merchandise purchase) 6,850 6,850 13-July Account Payable – H's Company Account Debit To Merchandise Inventory Account 62,650 1,224 |[S72,000 – ($72,000×15%)]× 2% TO Cash Account (S62,650 – $1,224) 61,426 (Being to record payment for purchase made on account)

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Step 2

Journal Ent...

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15-July Account Payable – K's Company Account Debit ($33, 450 – S6,850) To Merchandise Inventory Account ($33,450x 2%) TO Cash Account ($26,600 – $669) 26,600 669 25,931 (Being to record payment for purchase made on account) Cash Account Debit To Account Receivable – P's Company Account (Being to record cash received on sale of account) 36,000 21-July 36,000 21-July Cash Account Debit To Sales Account |(Being to record merchandise sold on master card) 108,000 108,000 21-July Cost of Merchandise Sold Account Debit To Merchandise Inventory Account (Being to record cost of goods sold) 64,800 64,800 22-July Account Receivable – T's Company Account Debit To Sales Account (Being to record sale of inventory on account) 16,650 16,650 22-July Cost of Merchandise Sold Account Debit To Merchandise Inventory Account (Being to record cost of goods sold) 10,000 10,000 Cash Account Debit To Sales Account (Being to record sale of inventory for cash) 23-July 91,200 91,200

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