Question

The following were selected from among the transactions completed by Babcock Company during November of the current year. Babcock uses the net method under a perpetual inventory system.

Nov.	3	Purchased merchandise on account from Moonlight Co., list price $94,000, trade discount 25%, terms FOB destination, 2/10, n/30.
	4	Sold merchandise for cash, $35,040. The cost of the goods sold was $20,610.
	5	Purchased merchandise on account from Papoose Creek Co., $50,800, terms FOB shipping point, 2/10, n/30, with prepaid freight of $850 added to the invoice.
	6	Returned $12,000 ($16,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co.
	8	Sold merchandise on account to Quinn Co., $14,030 with terms n/15. The cost of the goods sold was $9,130.
	13	Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
	14	Sold merchandise on VISA, $243,720. The cost of the goods sold was $148,260.
	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., $52,500, terms 1/10, n/30. The cost of the goods sold was $36,660.
	28	Paid VISA service fee of $3,750.
	30	Paid Quinn Co. a cash refund of $6,510 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,450.

Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Answer:

BABCOCK Company

Journal Transactions

Date	Particulars		Dr. (Amount $)	Cr. (Amount $ )
03-Nov	Merchandise Inventory	Dr.	70500
	To Accounts Payable-Moonlight Co. (Merchandise purchase value 94000 with trade discount 25% and 2/10, n/30 condition)			70500
4-Nov	Cash	Dr.	35040
	To Sales (merchandise sale on cash)			35040
	Cost of Merchandise Sold	Dr	20610
	To Merchandise Inventory			20610
5-Nov	Merchandise Inventory	Dr.	50800
	To Accounts Payable-Papoose Creek Co. (Merchandise purchase on condition 2/10, n/30 invoice include 850 $ of freight also)			50800
6-Nov	Accounts Payable-Moonlight Co.	Dr.	12000
	To Merchandise Inventory (Cost of merchandise 16000 with trade discount 25%)			12000
08- Nov	Accounts Receivable-Quinn Co.	Dr.	14030
	To Sales (merchandise sale on n/15 Term)			14030
	Cost of Merchandise Sold	Dr	9130
	To Merchandise Inventory			9130
13-Nov	Accounts Payable-Moonlight Co.(70500-12000)	Dr.	58500
	To Merchandise Inventory(58500*2%)			1170
	To cash (amount paid in cash within 10 days so Cash discount received)			57330
14-Nov	Cash	Dr	243720
	To Sales (merchandise sales through VISA and amount received)			243720
	Cost of Merchandise Sold	Dr.	148260
	To Merchandise Inventory			148260
15-Nov	Accounts Payable-Papoose Creek Co	Dr.	50,800
	To Merchandise Inventory			999
	To Cash ( Cash Discount received( (50800-850) *2%) Amount paid with frieght 850 )			49801
23-Nov	Cash	Dr	14030
	To Accounts Receivable-Quinn Co. (cash recived)			14030
24-Nov	Accounts Receivable-Rabel Co.		52500
	To Sales (merchandise sold to Rabel & Co. on 1/10, n/30 condition)			52500
	Cost of Merchandise Sold	Dr	36660
	To Merchandise Inventory			36660
28-Nov	Credit Card Expenses	Dr.	3,750
	To Cash ( Credit card Exp. paid)			3,750
30-Nov	Sales	Dr	6510
	To Cash (Merchandise return by Qunin & Co. & cash refund to him).			6510
	Merchandise Inventory	Dr	3450
	To Cost of Merchandise Sold			3450