Question

Sales-Related and Purchase-Related Transactions Using Perpetual Inventory SystemThe following were selected from among the transactions completed by Babcock Company during November of the current year:Nov. 3. Purchased merchandise on account from Moonlight Co., list price $80,000, trade discount 20%, terms FOB destination, 2/10, n/30.4. Sold merchandise for cash, $40,080. The cost of the goods sold was $24,580.5. Purchased merchandise on account from Papoose Creek Co., $50,800, terms FOB shipping point, 2/10, n/30, with prepaid freight of $820 added to the invoice.6. Returned $13,600 ($17,000 list price less trade discount of 20%) of merchandise purchased on November 3 from Moonlight Co.8. Sold merchandise on account to Quinn Co., $14,830 with terms n/15. The cost of the merchandise sold was $9,240.13. Paid Moonlight Co. on account for purchase of November 3, less return of November 6.14. Sold merchandise on VISA, $231,020. The cost of the goods sold was $135,490.15. Paid Papoose Creek Co. on account for purchase of November 5.23. Received cash on account from sale of November 8 to Quinn Co.24. Sold merchandise on account to Rabel Co., $53,800, terms 1/10, n/30. The cost of the goods sold was $37,340.28. Paid VISA service fee of $3,690.30. Paid Quinn Co. a cash refund of $5,610 for returned merchandise from sale of November 8. The cost of the returned merchandise was $2,990.Required:Journalize the transactions.

Answer 1

Nov 3

Inventory 64,000

Account Payable 64,000

Nov 4

Cash 40,080

Sales Revenue 40,080

COGS 24,580.5

Inventory 24,580.5

Nov 5

Inventory 51,620

Account Payable 51,620

Nov 6

Account Payable 13,600

Inventory 13,600

Nov 8

Account Receivable 14,830

Sales Revenue 14,830

COGS 9,240.13

Inventory 9,240.13

Nov 14

Account Payable 50,400 (64,000-13,600)

Inventory 1,008 (50,400 x 2%)

Cash 49,392(50,400-1,008)

Nov 14

Account Receivable 231,020

Sales Revenue 231,020

COGS 135,490.15

Inventory 135,490.15

nov 23

cash 14,830

account receivable 14,830

Account Payable 51,620

Inventory 1,016 (50,800 x 2%)

Cash 49,784(51,620-1,016)

nov 24

Account Receivable 53,800

Sales Revenue 53,800

COGS 37,340.28

Inventory 37,340.28

nov 28

credit card charge expense 3,690.3

cash 3,690.3

nov 28

sales return and allowance 5,610

cash 5,610

Inventory 2,990

COGS 2,990