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Chapter 5: Q4SE (page 296)

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.

Short Answer

Expert verified

Answer

The total of debits and credits is$188,030.

Step by step solution

01

Meaning of Sales Transactions

In accounting, the events associated with the transfer ofownershipare termed sales transactions. In the process of sales, the ownership of goods and services is transferred in favor of the buyer/purchaser from the seller.

02

Journal entries for sales transactions

Date

Accounts and Explanation

Debit ($)

Credit ($)

Jul 1

Cash

20,000

Sales revenue

20,000

(To record the cash sales)

Jul 1

Cost of goods sold

10,000

Merchandise inventory

10,000

(To record the cost of goods sold)

Jul 3

Accounts receivable (62,000*3%)

60,140

Merchandise inventory

60,140

(To record the sales on account)

Jul 3

Cost of goods sold

31,000

Merchandise inventory

31,000

(To record the cost of goods sold)

Jul 5

Refunds payable

4,500

Cash

4,500

(To record the sales return)

Jul 5

Merchandise inventory

2,250

Estimated returns inventory

2,250

(To record the cogs of returned inventory)

Jul 10

Cash

60,140

Accounts receivable

60,140

(To record the receipt of payment)

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Most popular questions from this chapter

The adjusted trial balance of Rachael Rey Music Company at June 30, 2018, follows:

RACHAEL REY MUSIC COMPANY

Adjusted Trial Balance

June 30, 2018

Balance

Account Title Debit Credit

Cash \(4,000

Accounts Receivable 38,400

Merchandise Inventory 18,100

Office Supplies 300

Furniture 39,900

Accumulated Depreciation-Furniture \)8,200

Accounts Payable 13,800

Salaries Payable 850

Unearned Revenue 7,500

Notes Payable, long-term 17,000

Common Stock 6,000

Retained Earnings 21,350

Dividends 40,000

Sales Revenue 184,000

Cost of Goods Sold 85,500

Selling Expense 18,600

Administrative Expense 12,000

Interest Expense 1,900

Total \(258,700 \)258,700

Requirements

1. Prepare Rachael Rey’s multi-step income statement for the year ended June 30, 2018.

2. Journalize Rachael Rey’s closing entries.

3. Prepare a post-closing trial balance as of June 30, 2018.

D & T Printing Supplies’ accounting records include the following accounts at December 31, 2018.

Purchases \( 185,200 Accumulated Depreciation—Building \) 21,000

Accounts Payable 7,700 Cash 18,100

Rent Expense 8,600 Sales Revenue 257,800

Building 42,800 Depreciation Expense—Building 4,700

Common Stock 55,000 Dividends 26,500

Retained Earnings 30,400 Interest Expense 1,900

Merchandise Inventory,

Beginning 119,000 Merchandise Inventory,

Ending 102,100

Notes Payable 11,300 Purchase Returns and Allowances 20,700

Purchase Discounts 2,900

Requirements

1. Journalize the required closing entries for D & T Printing Supplies assuming that D & T uses the periodic inventory system.

2. Determine the ending balance in the Retained Earnings account.

Journalize the following sales transactions for Sierra Tractors. Explanations are not required.

June 5 Sierra sold \(20,000 of inventory on account, credit terms are 4/10, n/30. Cost of goods is \)10,000. Sierra uses the gross method to record sales revenue.

12 Sierra receives payment from the customer on the amount due, less the discount.

Rocky RV Center’s accounting records include the following accounts at December 31, 2018.

Cost of Goods Sold \( 372,000 Accumulated Depreciation—Building \) 38,000

Accounts Payable 16,000 Cash 47,000

Rent Expense 26,000 Sales Revenue 636,500

Building 113,000 Depreciation Expense—Building 13,000

Common Stock 115,000 Dividends 58,000

Retained Earnings 83,100 Interest Revenue 14,000

Merchandise Inventory 239,600

Notes Receivable 34,000

Requirements

1. Journalize the required closing entries for Rocky.

2. Determine the ending balance in the Retained Earnings account.

What account is debited when recording the payment of freight when using the periodic inventory system?
See all solutions

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