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Chapter 5: Q15SE (page 298)

Journalize the following sales transactions for Sanborn Camera Store using the periodic inventory system. Explanations are not required.

Dec. 3, Sanborn sold $41,900 of camera equipment on the account; credit terms are 3/15, n/EOM.

17 Sanborn receives payment from the customer on the amount due to less the discount.

Short Answer

Expert verified

The total of debits and credits is$83,800

Step by step solution

01

Definition of Journal Entries

In the accounting process, the recording offinancial information in the tabular format by considering thedebit and credit aspects is termed journal entries. It is the primary activity of the business concern that helps in drafting further reports.

02

Preparation of journal entries

Date

Accounts and Explanation

Debit ($)

Credit ($)

Dec 3

Accounts receivable

41,900

Sales revenue

41,900

Dec 17

Cash

40,643

Sales discount (41,900*3%)

1,257

Accounts receivable

41,900

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Most popular questions from this chapter

Journalize the following sales transactions for Salem Sportswear. Explanations are not required. The company estimates sales returns at the end of each month.

Jul. 1 Salem sold \(20,000 of men’s sportswear for cash. Cost of goods sold is \)10,000.

3 Salem sold \(62,000 of women’s sportswear on account, credit terms are 3/10, n/30. Cost of goods is \)31,000.

5 Salem received a \(4,500 sales return on damaged goods from the customer on July 1. Cost of goods damaged is \)2,250.

10 Salem receives payment from the customer on the amount due, less discount.

What are the four steps involved in the closing process for a merchandising company?

Journalize the following transactions that occurred in June 2018 for Daley Company. Assume Daley uses the periodic inventory system. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Daley estimates sales returns at the end of each month.

Jun. 3 Purchased merchandise inventory on account from Sherry Wholesalers, \(5,500. Terms 3/15, n/EOM, FOB shipping point.

4 Paid freight bill of \)42 on June 3 purchase.

4 Purchased merchandise inventory for cash of \(1,100.

6 Returned \)200 of inventory from June 3 purchase.

8 Sold merchandise inventory to Henrich Company, \(4,400, on account. Terms 2/15, n/35.

9 Purchased merchandise inventory on account from Tex Wholesalers, \)4,600. Terms 1/10, n/30, FOB destination.

10 Made payment to Sherry Wholesalers for goods purchased on June 3, less return and discount.

12 Received payment from Henrich Company, less discount.

13 After negotiations, received a \(300 allowance from Tex Wholesalers.

15 Sold merchandise inventory to Jarvis Company, \)1,500, on account. Terms n/EOM.

22 Made payment, less allowance, to Tex Wholesalers for goods purchased on June 9.

23 Jarvis Company returned \(100 of the merchandise sold on June 15.

25 Sold merchandise inventory to Smith for \)700 on account. Terms of 3/10, n/30 was offered, FOB shipping point.

29 Received payment from Smith, less discount.

30 Received payment from Jarvis Company, less return.

Journalize the following sales transactions for King Company. Explanations are not required.

Apr. 1 King Company sold merchandise inventory for \(150. The cost of the inventory was \)90. The customer paid cash. King Company was running a promotion and the customer received a \(20 award at the time of sale that can be used at a future date on any King Company merchandise.

May 15 The customer uses the \)20 award when purchasing merchandise inventory for \(30. The cost of the inventory was \)18. The customer paid cash.

The records of Farm Quality Steak Company list the following selected accounts for the quarter ended April 30, 2018:

Interest Revenue \( 400 Accounts Payable \) 17,700

Merchandise Inventory 45,000 Accounts Receivable 38,200

Notes Payable, long-term 54,000 Accumulated Depreciation—Equipment 37,700

Salaries Payable 2,800 Common Stock 30,000

Net Sales Revenue 298,000 Retained Earnings 5,380

Rent Expense (Selling) 15,100 Dividends 25,000

Salaries Expense (Administrative) 2,000 Cash 7,100

Office Supplies 6,500 Cost of Goods Sold 154,960

Unearned Revenue 13,100 Equipment 132,000

Interest Expense 2,100 Interest Payable 1,700

Depreciation Expense—Equipment (Administrative) 1,320

Rent Expense (Administrative) 7,100

Utilities Expense (Administrative) 4,600 Salaries Expense (Selling) 6,000

Delivery Expense (Selling) 3,800 Utilities Expense (Selling) 10,000

Requirements

1. Prepare a single-step income statement.

2. Prepare a multi-step income statement.

3. M. Doherty, manager of the company, strives to earn a gross profit percentage of at least 50%. Did Farm Quality achieve this goal? Show your calculations
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