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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

The following transactions relate to Hawkins, Inc., an office store wholesaler, during June of this year. Terms of sale are 2/10, n/30. The company is located in Los Angeles, California.

June 1    Sold merchandise on account to Hendrix Office Store, invoice no. 1001, $451.20. The cost of the merchandise was $397.06.

3    Bought merchandise on account from Krueger, Inc., invoice no. 845A, $485.15; terms 1/10, n/30; dated June 1; FOB San Diego, freight prepaid and added to the invoice, $15 (total $500.15).

10    Sold merchandise on account to Ballard Stores, invoice no. 1002, $2,483.65. The cost of the merchandise was $2,235.29.

13    Bought merchandise on account from Kennedy, Inc., invoice no. 4833, $2,450.13; terms 2/10, n/30; dated June 11; FOB San Francisco, freight prepaid and added to the invoice, $123 (total $2,573.13).

18    Sold merchandise on account to Lawson Office Store, invoice no. 1003, $754.99. The cost of the merchandise was $671.94.

20    Issued credit memo no. 33 to Lawson Office Store for merchandise returned, $103.25. The cost of the merchandise was $91.89.

25    Bought merchandise on account from Villarreal, Inc., invoice no. 4R32, $1,552.30; terms net 30; dated June 18; FOB Santa Rosa, freight prepaid and added to the invoice, $84 (total $1,636.30).

30    Received credit memo no. 44 for merchandise returned to Villarreal, Inc., for $224.50.

Required

Record the transaction in the general journal using the perpetual inventory system. If using Working Papers, use pages 25 and 26.

To determine

Prepare journal entry to record the given transaction using perpetual inventory system.

Explanation

Merchandise Inventory:

Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a trader, to be sold within a year. Merchandise Inventory is a current asset account which includes all the costs incurred to acquire merchandise, and process it further for sale.

Date Account Titles and explanation Post.Ref Debit ($) Credit ($)
June 1 Accounts receivable   451.20  
      Sales     451.20
  (To record the sale of merchandise to Company H, invoice no:1001)      
         
  Cost of goods sold   397.06  
      Merchandise inventory     397.06
  (To record the cost of  merchandise sold to Company H)      
         
June 3 Merchandise inventory   500.15  
      Accounts payable     500.15
  (To record the purchase of  merchandise from Company K, invoice no:845A)      
         
June 10 Accounts receivable   2,483.65  
      Sales     2,483.65
  (To record the sales of merchandise to Company B, invoice no:1002)      
         
  Cost  of goods sold   2,235.29  
      Merchandise inventory     2,235.29
  (To record the cost of merchandise to Company B, invoice ni:1002)      
         
June 13 Merchandise inventory   2,573.13  
      Accounts payable     2,573...

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