Question

creating a journal

v

he 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 $90,000, trade discount 25%, terms FOB destination, 2/10, n/30.
	4	Sold merchandise for cash, $36,900. The cost of the goods sold was $20,480.
	5	Purchased merchandise on account from Papoose Creek Co., $50,700, terms FOB shipping point, 2/10, n/30, with prepaid freight of $750 added to the invoice.
	6	Returned $12,750 ($17,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co.
	8	Sold merchandise on account to Quinn Co., $14,550 with terms n/15. The cost of the goods sold was $9,510.
	13	Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
	14	Sold merchandise on VISA, $239,110. The cost of the goods sold was $137,270.
	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., $57,100, terms 1/10, n/30. The cost of the goods sold was $32,270.
	28	Paid VISA service fee of $3,700.
	30	Paid Quinn Co. a cash refund of $5,960 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,290.
CHART OF ACCOUNTS
Babcock Company
General Ledger
ASSETS 110 Cash 121 Accounts Receivable-Quinn Co. 122 Accounts Receivable-Rabel Co. 125 Notes Receivable 130 Inventory 131 Estimated Returns Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 211 Accounts Payable-Moonlight Co. 212 Accounts Payable-Papoose Creek Co. 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 221 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 521 Delivery Expense 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 526 Salaries Expense 531 Rent Expense 533 Insurance Expense 534 Store Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 539 Miscellaneous Expense 710 Interest Expense

Answer 1

	Journal entries
03-Nov	Inventory	67500	(90000*75%)
	Accounts payable		67500
04-Nov	Cash	36900
	Sales revenue		36900
	Cost of goods sold	20480
	Inventory		20480
05-Nov	Inventory	51450
	Accounts payable		50700
	Cash		750
06-Nov	Accounts payable	12750
	Inventory		12750
08-Nov	Accounts receivable Quinn Co.	14550
	Sales revenue		14550
	Cost of goods sold	9510
	Inventory		9510
13-Nov	Accounts payable	54750
	Purchase discount		1095
	Cash		53655
14-Nov	Cash	239110
	Sales revenue		239110
	Cost of goods sold	137270
	Inventory		137270
15-Nov	Accounts payable	50700
	Purchase discount		1014
	Cash		49686
23-Nov	Cash	14550
	Accounts receivable Quinn co.		14550
24-Nov	Accounts receivable Rabel co.	57100
	Sales revenue		57100
	Cost of goods sold	32270
	Merchandise inventory		32270
28-Nov	Credit card expense	3700
	Cash		3700
30-Nov	Customer refund payable	5960
	Cash		5960
	Estimated return inventory	3290
	Cost of goods sold		3290