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Chapter 1: AB-14E (page 36)

Recording transactions—sales journal

Feb. 1 Sold merchandise inventory on account, terms n/30, to Cole Co., \(1,050.

Cost of goods, \)860. Invoice no. 401.

6 Sold merchandise inventory for cash, \(950 (cost, \)750).

12 Collected interest revenue of \(170.

15 Received cash from Cole Co. in full settlement of its account receivable.

20 Sold merchandise inventory on account, terms n/30, to Dump Co.,

Issuing invoice no. 402 for \)500 (cost, \(325).

22 Sold merchandise inventory for cash, \)600 (cost \(530).

26 Sold office supplies to an employee for cash of \)150.

28 Received $500 from Dump Co. in full settlement of its account

receivable.

Requirements

1. Prepare headings for a sales journal. Journalize the transactions that should be recorded in the sales journal. Assume the company uses the perpetual inventory system.

2. Total each column of the sales journal.

Short Answer

Expert verified

Total Accounts receivables =$1,550

Total Cost of goods sold = $1,185

Step by step solution

01

Sales Journal Headings





Sales journal

Date

Invoice No.

Customer Account Debited

Post. Ref.

Accounts Receivables Dr

Sales Revenue Cr

Cost of Goods Sold Dr.

Merchandise Inventory Cr.

Journal Entries relating to sales journal

Date

Description

Debit

Credit

Feb 1

Accounts Receivables Dr.

$ 1,050

Sales revenue

$ 1,050

Being sales made on account

Feb 1

Cost of goods sold

860

Merchandise Inventory

860

Being cost of goods recorded for sales

Feb 20

Accounts Receivables

500

Sales revenue

500

Being sales made on account

Feb 20

Cost of goods sold

325

Merchandise Inventory

325

Being cost of goods recorded for sales

02

Total of sales journal





Sales Journal

Date

Invoice No.

Customer Account Debited

Post. Ref.

Accounts Receivables Dr

Sales Revenue Cr

Cost of Goods Sold Dr.

Merchandise Inventory Cr.

Feb 1

401

Cole Co.

$ 1,050

$ 860

Feb 20

402

Dumb Co.

500

325

Feb 28

Total

$ 1,550

1,185

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Most popular questions from this chapter

Let’s examine a case using Greg’s Tunes and Sal’s Silly Songs. It is now the end of the first year of operations, and the stockholders want to know how well each business came out at the end of the year. Neither business kept complete accounting records, and no dividends were paid. The businesses throw together the data shown on the next page at year-end: \( 23,000 8,000 35,000 22,000 \) 10,000 6,000 44,000 9,000 Total Assets Common Stock Total Revenues Total Expenses Greg’s Tunes: Sal’s Silly Songs: Total Liabilities Common Stock Total Expenses Net Income To gain information for evaluating the businesses, the stockholders ask you several questions. For each answer, you must show your work to convince the stockholders that you know what you are talking about. Requirements 7. Which business looks better from a financial standpoint?

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