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Chapter 5: Q5-3TI (page 265)

Click Computers has the following transactions in July related to the sale of merchandise inventory.

July 12 Sold computers on account for \(8,000 to a customer, terms 3/15, n/30. The cost of the computers is \)4,800.

26 Received payment from the customer on the balance due.

Journalize the sales transactions for Click Computers assuming the company uses the perpetual inventory system.

Short Answer

Expert verified

The total debit and credit of the journal are $20,560.

Step by step solution

01

Meaning of Journal Entries

In accounting, journal entries refer to the tabular presentation of the financial information of a business entity inchronological order. It records both the debit and credit aspects of the transaction simultaneously.

02

Preparation of journal entries

Date

Accounts and Explanation

Debit ($)

Credit ($)

July 12

Accounts receivable

8,000

Cost of goods sold

4,800

Sales revenue

8,000

Inventory

4,800

(To record the sale of computers)

July 26

Cash

7,760

Accounts receivable

7,760

(Cash received within the discount period)

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Most popular questions from this chapter

Clink Electric uses the periodic inventory system. Clink reported the following selected amounts at May 31, 2018:

Merchandise Inventory, June 1, 2017 \( 16,000 Freight In \) 6,000

Merchandise Inventory, May 31, 2018 21,500 Net Sales Revenue 138,000

Purchases 81,000 Common Stock 32,000

Purchase Discounts 3,000 Retained Earnings 17,000

Purchase Returns and Allowances 6,600

Compute the following for Clink:

a. Cost of goods sold.

b. Gross profit.

The unadjusted trial balance for Trudel Electronics Company at March 31, 2018, follows:

TRUDEL ELECTRONICS COMPANY

Unadjusted Trial Balance

March 31, 2018

Balance

Account Title Debit Credit

Cash \(4,000

Accounts Receivable 38,800

Merchandise Inventory 45,500

Office Supplies 6,500

Equipment 130,000

Accumulated Depreciation-Equipment \)36,800

Accounts Payable 17,400

Unearned revenue 13,200

Notes Payable, long-term 48,000

Common Stock 60,000

Retained Earnings 100

Dividends 20,000

Sales Revenue 282,500

Cost of Goods Sold 160,600

Salaries Expense (Selling) 20,000

Rent Expense (Selling) 15,800

Salaries Expenses (Administrative) 5,700

Utilities Expenses (Administrative) 11,100

Total \(458,000 \)458,000

Requirements

1. Journalize the adjusting entries using the following data:

a. Interest revenue accrued, \(200.

b. Salaries (Selling) accrued, \)2,300.

c. Depreciation Expense鈥擡quipment (Administrative), \(1,300.

d. Interest expense accrued, \)1,500.

e. A physical count of inventory was completed. The ending Merchandise Inventory should have a balance of \(45,200.

f. Trudel estimates that approximately \)6,000 of merchandise sold will be returned with a cost of $1,200.

2. Prepare Trudel Electronics鈥檚 adjusted trial balance as of March 31, 2018.

3. Prepare Trudel Electronics鈥檚 multi-step income statement for year ended March 31, 2018.

Match the accounting terms with the corresponding definitions.

1. Credit Terms a. The cost of the merchandise inventory that the business has sold to customers.

2. FOB Destination b. An amount granted to the purchaser as an incentive to keep goods that are not 鈥渁s ordered.鈥�

3. Invoice c. A type of merchandiser that buys merchandise either from a manufacturer or a wholesaler and then sells those goods to consumers.

4. Cost of Goods Sold d. A situation in which the buyer takes ownership (title) at the delivery destination point.

5. Purchase Allowance e. A type of merchandiser that buys goods from manufacturers and then sells them to retailers.

6. FOB Shipping Point f. A discount that businesses offer to purchasers as an incentive for early payment.

7. Wholesaler g. A situation in which the buyer takes title to the goods after the goods leave the seller鈥檚 place of business.

8. Purchase Discount h. The terms of purchase or sale as stated on the invoice.

9. Retailer i. A seller鈥檚 request for cash from the purchaser.

The records of Grade A Beef Company list the following selected accounts for the quarter ended September 30, 2018:

Interest Revenue \( 900 Accounts Payable \) 17,000

Merchandise Inventory 46,300 Accounts Receivable 33,500

Notes Payable, long-term 47,000 Accumulated Depreciation鈥� Equipment 36,500

Salaries Payable 2,600 Common Stock 38,000

Net Sales Revenue 294,000 Retained Earnings 3,610

Rent Expense (Selling) 16,700 Dividends 15,000

Salaries Expense (Administrative) 2,500 Cash 7,300

Office Supplies 5,800 Cost of Goods Sold 161,700

Unearned Revenue 13,800 Equipment 131,000

Interest Expense 2,300 Interest Payable 900

Depreciation Expense鈥擡quipment (Administrative) 1,310

Rent Expense (Administrative) 7,400

Utilities Expense (Administrative) 4,500 Salaries Expense (Selling) 5,000

Delivery Expense (Selling) 3,100 Utilities Expense (Selling) 10,900

Requirements

1. Prepare a single-step income statement.

2. Prepare a multi-step income statement.

3. J. Douglas, manager of the company, strives to earn a gross profit percentage of at least 50%. Did Grade A Beef achieve this goal? Show your calculations

Journalize the following sales transactions for Paul Sportswear. Explanations are not required.

Aug. 1 Paul sold \(66,000 of women鈥檚 sportswear on account, credit terms are 2/10, n/30. Cost of goods is \)33,000. Paul uses the gross method to record sales revenue.

25 Paul receives payment from the customer on the amount due.
See all solutions

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