Question

Blossom Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Blossom showed Cash of $4,500 and Owner’s Capital of $4,500.

May 1		Purchased merchandise on account from Braun's Wholesale Supply $3,800, terms 2/10, n/30.
2		Sold merchandise on account $1,500, terms 1/10, n/30. The cost of the merchandise sold was $1,000.
5		Received credit from Braun's Wholesale Supply for merchandise returned $200.
9		Received collections in full, less discounts, from customers billed on sales of $1,500 on May 2.
10		Paid Braun's Wholesale Supply in full, less discount.
11		Purchased supplies for cash $300.
12		Purchased merchandise for cash $1,200.
15		Received refund for poor quality merchandise from supplier on cash purchase $100.
17		Purchased merchandise from Valley Distributors $1,100, FOB shipping point, terms 2/10, n/30.
19		Paid freight on May 17 purchase $100.
24		Sold merchandise for cash $2,800. The merchandise sold had a cost of $1,800.
25		Purchased merchandise on account from Lumley, Inc. $550, FOB destination, terms 2/10, n/30.
27		Paid Valley Distributors in full, less discount.
29		Made refunds to cash customers for defective merchandise $60. The returned merchandise had a fair value of $20.
31		Sold merchandise on account $1,000, terms n/30. The cost of the merchandise sold was $500.

Blossom Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 Owner’s Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Answer 1

	Date	Account titles and explanation		Debit(in $)	Credit(in $)
May
	1	Merchandise Inventory		3800
		Accounts Payable			3800
	2	Accounts Receivable		1500
		Sales			1500
		Cost of goods sold		1000
		Merchandise Inventory			1000
	5	Accounts Payable		200
		Merchandise Inventory			200
	9	Cash		1485
		Sales discount		15
		Accounts Receivable			1500
	10	Accounts payable		3800
		Merchandise Inventory			76
		Cash			3724
	11	Supplies		300
		Cash			300
	12	Merchandise Inventory		1200
		Cash			1200
	15	Cash		100
		Merchandise Inventory			100
	17	Merchandise Inventory		1100
		Accounts Payable			1100
	19	Merchandise Inventory		100
		Cash			100
	24	Accounts Receivable		2800
		Sales			2800
		Cost of goods sold		1800
		Merchandise Inventory			1800
	25	Merchandise Inventory		550
		Cash			550
	27	Accounts payable		1100
		Merchandise Inventory			22
		Cash			1078
	29	Sales return and allowance		60
		Cash			60
		Merchandise Inventory		20
		Cost of goods sold			20
	31	Accounts Receivable		1000
		Sales			1000
		Cost of goods sold		500
		Merchandise Inventory			500