91Ó°ÊÓ

Journalize the following transactions that occurred in November 2018 for May’s Adventure Park. Assume May’s 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.

Nov. 4 Purchased merchandise inventory on account from Valera Company, \(8,000. Terms 1/10, n/EOM, FOB shipping point.

6 Paid freight bill of \)160 on November 4 purchase.

8 Returned half the inventory purchased on November 4 from Valera Company.

10 Sold merchandise inventory for cash, \(1,700. Cost of goods, \)680. FOB destination.

11 Sold merchandise inventory to Garrison Corporation, \(10,300, on account, terms of 3/10, n/EOM. Cost of goods, \)5,150. FOB shipping point.

12 Paid freight bill of \(30 on November 10 sale.

13 Sold merchandise inventory to Cain Company, \)9,000, on account, terms of 1/10, n/45. Cost of goods, \(4,500. FOB shipping point.

14 Paid the amount owed on account from November 4, less return and discount.

18 Purchased inventory of \)3,700 on account from Regan Corporation. Payment terms were 2/10, n/30, FOB destination.

20 Received cash from Garrison Corporation, less discount.

26 Paid amount owed on account from November 18, less discount.

28 Received cash from Cain Company.

29 Purchased inventory from Sanders Corporation for cash, \(12,000, FOB shipping point. Freight in paid to shipping company, \)200.

Step by step solution

01

Meaning of Corporation

The term corporation refers to an entity established by the association of individuals or groups to accomplish the common goals stated by the upper management. A corporation is established after the fulfilment of required legalities.

02

Preparation of journal entries

Date	Accounts and Explanation	Debit ($)	Credit ($)
Nov 4	Merchandise inventory	8,000
	Accounts payable (Valera)		8,000
Nov 6	Freight-in	160
	Cash		160
Nov 8	Accounts payable (Valera)	4,000
	Merchandise inventory		4,000
Nov 10	Cash	1,700
	Sales revenue		1,700
Nov 10	Cost of goods sold	680
	Merchandise inventory		680
Nov 11	Accounts receivable (Garrison)	10,300
	Sales revenue		10,300
Nov 11	Cost of goods sold	5,150
	Merchandise inventory		5,150
Nov 12	Delivery expense	30
	Cash		30
Nov 13	Accounts receivable (Cain)	9,000
	Sales revenue		9,000
Nov 13	Cost of goods sold	4,500
	Merchandise inventory		4,500
Nov 14	Accounts payable (Valera) [8000-4000]	4,000
	Cash		3,960
	Merchandise inventory (4000*1%)		40
Nov 18	Merchandise inventory	3,700
	Accounts payable (Regan)		3,700
Nov 20	Cash	9,991
	Sales discount (10300*3%)	309
	Accounts receivable (Garrison)		10,300
Nov 26	Accounts payable (Regan)	3,700
	Merchandise inventory (3700*2%)		74
	Cash		3,626
Nov 28	Cash	9,000
	Accounts receivable (Cain)		9,000
Nov 29	Merchandise inventory	12,000
	Cash		12,000
Nov 29	Freight-in	200
	Cash		200

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