91Ó°ÊÓ

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

Mar. 3 Purchased merchandise inventory on account from Sidecki Wholesalers, \(5,500. Terms 2/15, n/EOM, FOB shipping point.

4 Paid freight bill of \)70 on March 3 purchase.

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

6 Returned \)900 of inventory from March 3 purchase.

8 Sold merchandise inventory to Herrick Company, \(3,400, on account. Terms 1/15, n/35.

9 Purchased merchandise inventory on account from Tex Wholesalers, \)5,600. Terms 2/10, n/30, FOB destination.

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

12 Received payment from Herrick Company, less discount.

13 After negotiations, received a \(500 allowance from Tex Wholesalers.

15 Sold merchandise inventory to Jesper Company, \)1,700, on account. Terms n/EOM.

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

23 Jesper Company returned \(300 of the merchandise sold on March 15.

25 Sold merchandise inventory to Salter for \)1,000 on account. Terms of 1/10, n/30 was offered, FOB shipping point.

29 Received payment from Salter, less discount.

30 Received payment from Jesper Company, less return.

Step by step solution

01

Meaning of Accounts Payable

The term accounts payable refers to suppliers or vendors from whom a business entity purchases goods or services on credit, and payment is due to them. It is reported in the liabilities section of thebalance sheet under thecurrent liabilities head.

02

Preparation of journal entries

Date	Accounts and Explanation	Debit ($)	Credit ($)
2018
Mar 3	Merchandise inventory	5,500
	Accounts payable (Sidecki Wholesalers)		5,500
Mar 4	Merchandise inventory	70
	Cash		70
Mar 4	Merchandise inventory	1,100
	Cash		1,100
Mar 6	Accounts payable (Sidecki Wholesalers)	900
	Merchandise inventory		900
Mar 8	Accounts receivable (Herrick Company)	3,400
	Sales revenue		3,400
Mar 9	Merchandise inventory	5,600
	Accounts payable (Tex Wholesaler)		5,600
Mar 10	Accounts payable (Sidecki Wholesalers) [5500-900]	4,600
	Cash		4462
	Merchandise inventory (4600*3%)		138
Mar 12	Cash	3,332
	Sales discount (3400*2%)	68
	Accounts receivable (Herrick Company)		3400
Mar 13	Accounts payable (Tex Wholesalers)	500
	Merchandise inventory		500
Mar 15	Accounts receivable (Jesper company)	1,700
	Sales revenue		1,700
Mar 22	Accounts payable (Tex Wholesalers) [5600-500]	5,100
	Cash		5,100
Mar 23	Sales revenue	300
	Accounts receivable (Jesper company)		300
Mar 25	Accounts receivable (Salter)	1,000
	Sales revenue		1,000
Mar 29	Cash	990
	Sales discount (1000*1%)	10
	Accounts receivable (Salter)		1000
Mar 30	Cash	1,400
	Accounts receivable (Jesper company) [1700-300]		1,400

Unlock Step-by-Step Solutions & Ace Your Exams!

• Full Textbook Solutions

  Get detailed explanations and key concepts

• Unlimited Al creation

  Al flashcards, explanations, exams and more...

• Ads-free access

  To over 500 millions flashcards

• Money-back guarantee

  We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91Ó°ÊÓ!