Chapter 5: Q8PGB (page 249)

Question: Journalize the following transactions that occurred in March 2018 for Faucet. Assume Faucet uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.
Mar. 3 Purchased merchandise inventory on account from Sidecki Wholesalers, $3,500. Terms 2/15, n/EOM, FOB shipping point.
4 Paid freight bill of $75 on March 3 purchase.
4 Purchased merchandise inventory for cash of $2,200.
6 Returned $800 of inventory from March 3 purchase.
8 Sold merchandise inventory to Harvey Company, $5,700, on account. Terms 2/15, n/35. Cost of goods, $2,508.
9 Purchased merchandise inventory on account from Teaton Wholesalers, $6,000. Terms 2/10, n/30, FOB destination.
10 Made payment to Sidecki Wholesalers for goods purchased on March 3, less return and discount.
13 After negotiations, received a $100 allowance from Teaton Wholesalers.
15 Sold merchandise inventory to Jackson Company, $2,900, on account. Terms n/EOM. Cost of goods, $1,276.
22 Made payment, less allowance, to Teaton Wholesalers for goods purchased on March 9.
25 Sold merchandise inventory to Secker for $2,000 on account that cost $880. Terms of 2/10, n/30 were offered, FOB shipping point. As a courtesy to Secker, $85 of freight was added to the invoice for which cash was paid by Faucet.
28 Received payment from Harvey Company.
29 Received payment from Secker, less discount.
30 Received payment from Jackson Company.

Short Answer

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Answer

The total of debits and credits is$47,139.

Step by step solution

Meaning of Accounts Payable

In accounting, accounts payable denotes the suppliers who provide goods and services on credit to the business. It also indicates that the amount is payable to those suppliers and is reported under thecurrent liabilities section of thebalance sheet.

Step 2: Preparation of journal entries

Date	Accounts and Explanation	Debit ($)	Credit ($)
Mar 3	Merchandise inventory	3,500
	Accounts payable (Sidecki)		3,500
Mar 4	Freight-in	75
	Cash		75
Mar 4	Merchandise inventory	2,200
	Cash		2,200
Mar 6	Accounts payable (Sidecki)	800
	Merchandise inventory		800
Mar 8	Accounts receivable (Harvey)	5,700
	Sales revenue		5,700
Mar 8	Cost of goods sold	2,508
	Merchandise inventory		2,508
Mar 9	Merchandise inventory	6,000
	Accounts payable (Teaton)		6,000
Mar 10	Accounts payable (3500-800)	2,700
	Merchandise inventory (2700*2%)		54
	Cash		2,646
Mar 13	Accounts payable (Teaton)	100
	Purchase returns and allowances		100
Mar 15	Accounts receivable (Jackson)	2,900
	Sales revenue		2,900
Mar 15	Cost of goods sold	1,276
	Merchandise inventory		1,276
Mar 22	Accounts payable (Teaton) [6000-100]	5,900
	Merchandise inventory (5900*2%)		118
	Cash		5,782
Mar 25	Accounts receivable (Secker)	2,880
	Sales revenue		2,000
	Cash		880
Mar 28	Cash	5,700
	Accounts receivable (Harvey)		5,700
Mar 29	Cash	1,960
	Sales discount (2000*2%)	40
	Accounts receivable (Secker) [2880-880]		2,000
Mar 30	Cash	2,900
	Accounts receivable (Jackson)		2,900