Waters Hardware Store completed the following merchandisingtransactions in the month of May. At the beginning of May, Waterâsledger showed Cash of $10,804 and Common Stock of $10,804.
May 1 Purchased merchandise on account from Hauke Wholesale Supplyfor $8,400, terms 1/10, n/30. 2 Sold merchandise on account for $5,200, terms 2/10, n/30. Thecost of the merchandise sold was $3,900. 5 Received credit from Hauke Wholesale Supply for merchandisereturned $300. 9 Received collections in full, less discounts, from customersbilled on May 2. 10 Paid Hauke Wholesale Supply in full, less discount. 11 Purchased supplies for cash $1,215. 12 Purchased merchandise for cash $4,187. 15 Received $311 refund for return of poor-quality merchandisefrom supplier on cash purchase. 17 Purchased merchandise from Friedrich Distributors for $4,600,terms 2/10, n/30. 19 Paid freight on May 17 purchase $338. 24 Sold merchandise for cash $7,428. The cost of the merchandisesold was $5,537. 25 Purchased merchandise from Fasteners Inc. for $1,080, terms3/10, n/30. 27 Paid Friedrich Distributors in full, less discount. 29 Made refunds to cash customers for returned merchandise $127.The returned merchandise had cost $95. 31 Sold merchandise on account for $1,729, terms n/30. The cost ofthe merchandise sold was $1,121.
Journalize the transactions using a perpetual inventory system.(Credit account titles are automatically indented whenamount is entered. Do not indent manually. Record journal entriesin the order presented in the problem.)
Waters Hardware Store completed the following merchandisingtransactions in the month of May. At the beginning of May, Waterâsledger showed Cash of $10,804 and Common Stock of $10,804.
| May 1 | Purchased merchandise on account from Hauke Wholesale Supplyfor $8,400, terms 1/10, n/30. | |
| 2 | Sold merchandise on account for $5,200, terms 2/10, n/30. Thecost of the merchandise sold was $3,900. | |
| 5 | Received credit from Hauke Wholesale Supply for merchandisereturned $300. | |
| 9 | Received collections in full, less discounts, from customersbilled on May 2. | |
| 10 | Paid Hauke Wholesale Supply in full, less discount. | |
| 11 | Purchased supplies for cash $1,215. | |
| 12 | Purchased merchandise for cash $4,187. | |
| 15 | Received $311 refund for return of poor-quality merchandisefrom supplier on cash purchase. | |
| 17 | Purchased merchandise from Friedrich Distributors for $4,600,terms 2/10, n/30. | |
| 19 | Paid freight on May 17 purchase $338. | |
| 24 | Sold merchandise for cash $7,428. The cost of the merchandisesold was $5,537. | |
| 25 | Purchased merchandise from Fasteners Inc. for $1,080, terms3/10, n/30. | |
| 27 | Paid Friedrich Distributors in full, less discount. | |
| 29 | Made refunds to cash customers for returned merchandise $127.The returned merchandise had cost $95. | |
| 31 | Sold merchandise on account for $1,729, terms n/30. The cost ofthe merchandise sold was $1,121. |
Journalize the transactions using a perpetual inventory system.(Credit account titles are automatically indented whenamount is entered. Do not indent manually. Record journal entriesin the order presented in the problem.)
Related questions
On November 1, 2012 the following were the account balances ofSolo Sales and Service, Inc. The perpetual inventory method isused.
| Debits | Credits | |||
| Cash | $4,795 | Accumulated depreciation | $1,000 | |
| Accounts Receivable | 2,320 | Accounts Payable | 6,800 | |
| Supplies | 1,000 | Unearned Service Revenue | 400 | |
| Equipment | 40,000 | Salaries Payable | 550 | |
| Common Stock | 11,000 | |||
| Retained Earnings | 28,365 | |||
| $48,115 | $48,115 |
During November the followingsummary transactions were completed.
Nov. 8 | Paid $1,150 for salaries due employees, of which $550 is forOctober salaries payable and $600 is for November. |
10 | Received $1,400 cash from customers in payment of account. |
11 | Purchased merchandise on account from Midwest Wholesale Supplyfor $6,000, terms 2/10, n/30. |
12 | Sold merchandise on account for $4,500, terms 2/10, n/30. Thecost of the merchandise sold was $3,000. |
15 | Received credit from Midwest Wholesale Supply for merchandisereturned $200. |
19 | Received collections in full, less discounts, from customersbilled on sales of $4,500 on November 12. |
20 | Paid Midwest Wholesale Supply in full, less discount. (Donâtforget the return on the 15th.) |
22 | Received $1,300 cash for services performed in November. |
25 | Purchased equipment on account $3,000. |
27 | Purchased supplies on account $1,300. |
28 | Paid creditors $2,500 of accounts payable due. |
29 | Paid November rent $300. |
29 | Paid salaries $1,100. |
29 | Performed services on account and billed customers for servicesprovided $1,900. |
29 | Received $550 from customers for services to be provided in thefuture. |
Adjustment data:
1. | Supplies on hand are valued at $1,600. |
2. | Accrued salaries payable as of 11/30 are $500. |
3. | Depreciation for the month is $750. |
4. | $650 of the unearned service revenue has not been earned bymonth end. |
Instructions
Enter the November 1 balances in ledger accounts. Use T accountsprovided on the next page.
Cash | |
| |
| |
Accounts Receivable | |
Supplies | |
Store Equipment | |
| Accumulated Depreciationâ Store Equipment | |
Accounts Payable | |
| Unearned Service Revenue | |
Salaries Payable | |
Common Stock | |
Retained Earnings | |
General Ledger (Continued)
Income Summary | |
Palisade Creek Co. is a merchandising business that uses theperpetual inventory system. The account balances for Palisade CreekCo. as of May 1, 2016 (unless otherwise indicated), are asfollows:
| 110 | Cash | $ 83,600 |
| 112 | Accounts Receivable | 233,900 |
| 115 | Merchandise Inventory | 624,400 |
| 116 | Estimated Returns Inventory | 28,000 |
| 117 | Prepaid Insurance | 16,800 |
| 118 | Store Supplies | 11,400 |
| 123 | Store Equipment | 569,500 |
| 124 | Accumulated Depreciation-Store Equipment | 56,700 |
| 210 | Accounts Payable | 96,600 |
| 211 | Salaries Payable | â |
| 212 | Customers Refunds Payable | 50,000 |
| 310 | Lynn Tolley, Capital, June 1, 2015 | 685,300 |
| 311 | Lynn Tolley, Drawing | 135,000 |
| 312 | Income Summary | â |
| 410 | Sales | 5,069,000 |
| 510 | Cost of Merchandise Sold | 2,823,000 |
| 520 | Sales Salaries Expense | 664,800 |
| 521 | Advertising Expense | 281,000 |
| 522 | Depreciation Expense | â |
| 523 | Store Supplies Expense | â |
| 529 | Miscellaneous Selling Expense | 12,600 |
| 530 | Office Salaries Expense | 382,100 |
| 531 | Rent Expense | 83,700 |
| 532 | Insurance Expense | â |
| 539 | Miscellaneous Administrative Expense | 7,800 |
During May, the last month of the fiscal year, the followingtransactions were completed:
Record the following transactions on page 20 of the journal.Refer to the Chart of Accounts for exact wording of accounttitles.
| May | 1 | Paid rent for May, $5,000. |
| 3 | Purchased merchandise on account from Martin Co., terms 2/10,n/30, FOB shipping point, $36,000. | |
| 4 | Paid freight on purchase of May 3, $600. | |
| 6 | Sold merchandise on account to Korman Co., terms 2/10, n/30,FOB shipping point, $68,500. The cost of the merchandise sold was$41,000. | |
| 7 | Received $22,300 cash from Halstad Co. on account. | |
| 10 | Sold merchandise for cash, $54,000. The cost of the merchandisesold was $32,000. | |
| 13 | Paid for merchandise purchased on May 3. | |
| 15 | Paid advertising expense for last half of May, $11,000. | |
| 16 | Received cash from sale of May 6. | |
| 19 | Purchased merchandise for cash, $18,700. | |
| 19 | Paid $33,450 to Buttons Co. on account. | |
| 20 | Paid Korman Co. a cash refund of $13,230 for returnedmerchandise from sale of May 6. The invoice amount of the returnedmerchandise was $13,500 and the cost of the returned merchandisewas $8,000. |
Record the following transactions on page 21 of the journal.Refer to the Chart of Accounts for exact wording of accounttitles.
| May | 20 | Sold merchandise on account to Crescent Co., terms 1/10, n/30,FOB shipping point, $110,000. The cost of the merchandise sold was$70,000. |
| 21 | For the convenience of Crescent Co., paid freight on sale ofMay 20, $2,300. | |
| 21 | Received $42,900 cash from Gee Co. on account. | |
| 21 | Purchased merchandise on account from Osterman Co., terms 1/10,n/30, FOB destination, $88,000. | |
| 24 | Returned of damaged merchandise purchased on May 21, receivinga credit memo from the seller for $5,000. | |
| 26 | Refunded cash on sales made for cash, $7,500. The cost of themerchandise returned was $4,800. | |
| 28 | Paid sales salaries of $56,000 and office salaries of$29,000. | |
| 29 | Purchased store supplies for cash, $2,400. | |
| 30 | Sold merchandise on account to Turner Co., terms 2/10, n/30,FOB shipping point, $78,750. The cost of the merchandise sold was$47,000. | |
| 30 | Received cash from sale of May 20 plus freight paid on May21. | |
| 31 | Paid for purchase of May 21, less return of May 24. |
