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Chapter 5: Q9PGB (page 295)

Question: Journalize the following transactions that occurred in January 2018 for Mike鈥檚 Amusements. Assume Mike鈥檚 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.

Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, \(5,000. Terms 1/10, n/EOM, FOB shipping point.

6 Paid freight bill of \)150 on January 4 purchase.

8 Returned half the inventory purchased on January 4 from Vanderbilt Company.

10 Sold merchandise inventory for cash, \(1,100. Cost of goods, \)440. FOB destination.

11 Sold merchandise inventory to Gilmore Corporation, \(10,100, on account, terms of 3/10, n/EOM. Cost of goods, \)5,555. FOB shipping point.

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

13 Sold merchandise inventory to Cadet Company, \)8,800, on account, terms of 3/10, n/45. Cost of goods, \(4,400. FOB shipping point.

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

18 Purchased inventory of \)4,600 on account from Roberts Corporation. Payment terms were 1/10, n/30, FOB destination.

20 Received cash from Gilmore Corporation, less discount.

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

28 Received cash from Cadet Company.

29 Purchased inventory from Silk Corporation for cash, \(12,000, FOB shipping point. Freight in paid to shipping company, \)240.

Short Answer

Expert verified

Answer

The total of debits and credits is$80,915

Step by step solution

01

Meaning of Sales Returns

In accounting, sales returns refer to the goods returned by the customers. Sales returns occur when goods are not up to the mark, are defective, or are found damaged by the customers.Sales returns decrease the sales revenues of the business entity and are treated separately in the books.

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Most popular questions from this chapter

Describe the multi-step income statement.

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

Triton Department Store uses a periodic inventory system. The adjusted trial balance of Triton Department Store at December 31, 2018, follows:

TRITON DEPARTMENT STORE

Adjusted Trial Balance

December 31, 2018

Balance

Account Title Debit Credit

Cash \(8,200

Accounts Receivable 84,600

Merchandise Inventory (beginning) 37,800

Office Supplies 850

Furniture 86,000

Accumulated Depreciation-Furniture \)18,500

Accounts Payable 29,400

Salaries Payable 2,300

Unearned Revenue 14,900

Notes Payable, long-term 36,000

Common Stock 60,000

Retained Earnings 22,850

Dividends 88,600

Sales Revenue 374,000

Purchases 295,000

Purchase Returns and Allowances 109,000

Purchase Discounts 6,400

Freight-In 300

Selling Expense 41,700

Administrative Expense 26,600

Interest Expense 3,700

Total \(673,350 \)673,350

Requirements

1. Prepare Triton Department Store鈥檚 multi-step income statement for the year ended December 31, 2018. Assume ending Merchandise Inventory is $36,300.

2. Journalize Triton Department Store鈥檚 closing entries.

D & T Printing Supplies鈥� accounting records include the following accounts at December 31, 2018.

Purchases \( 185,200 Accumulated Depreciation鈥擝uilding \) 21,000

Accounts Payable 7,700 Cash 18,100

Rent Expense 8,600 Sales Revenue 257,800

Building 42,800 Depreciation Expense鈥擝uilding 4,700

Common Stock 55,000 Dividends 26,500

Retained Earnings 30,400 Interest Expense 1,900

Merchandise Inventory,

Beginning 119,000 Merchandise Inventory,

Ending 102,100

Notes Payable 11,300 Purchase Returns and Allowances 20,700

Purchase Discounts 2,900

Requirements

1. Journalize the required closing entries for D & T Printing Supplies assuming that D & T uses the periodic inventory system.

2. Determine the ending balance in the Retained Earnings account.

Journalize the following sales transactions for Salem Sportswear. Explanations are not required. The company estimates sales returns at the end of each month.

Jul. 1 Salem sold \(20,000 of men鈥檚 sportswear for cash. Cost of goods sold is \)10,000.

3 Salem sold \(62,000 of women鈥檚 sportswear on account, credit terms are 3/10, n/30. Cost of goods is \)31,000.

5 Salem received a \(4,500 sales return on damaged goods from the customer on July 1. Cost of goods damaged is \)2,250.

10 Salem receives payment from the customer on the amount due, less discount.
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