91Ó°ÊÓ

Journalize the following sales transactions for Morris Supply. Explanations are not required.

Mar. 1 Morris Supply sold merchandise inventory for \(3,000. The cost of the inventory was \)1,800. The customer paid cash. Morris Supply was running a promotion, and the customer received a \(150 award at the time of sale that can be used at a future date on any Morris Supply merchandise.

3 Sold \)6,000 of supplies on account. Credit terms are 2/10, n/45, FOB destination. The cost of goods is \(3,600.

10 Received payment from the customer on the amount due from March 3, less the discount.

Apr. 15 The customer used the \)150 award when purchasing merchandise inventory for \(200; the inventory cost was \)120. The customer paid cash.

Step by step solution

01

Meaning of Journal Entries

In accounting, journal entries refer to maintaining and recording the financial transactions of a business concern in its books. Journal entries follow the dual aspect concept of accounting and reflect both the debit and credit perspectives of a transaction.

02

Preparation of journal entries

Date	Accounts and Explanation	Debit ($)	Credit ($)
Mar 1	Cash	3,300
	Sales revenue		3,300
Mar 1	Cost of goods sold	1,800
	Merchandise inventory		1,800
Mar 1	Sales allowances	150
	Customer		150
Mar 3	Accounts receivable	6,000
	Sales		6,000
Mar 3	Cost of goods sold	3,600
	Merchandise inventory		3,600
Mar 10	Cash	5,880
	Discount (6000*2%)	120
	Accounts receivable		6,000
Apr 15	Customer	200
	Sales revenue		200
Apr 15	Cost of goods sold	120
	Merchandise inventory		120
Apr 15	Cash	50
	Customer		50

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