Question

In: Accounting

The following were selected from among the transactions completed by Babcock Company during November of the...

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.

Solutions

Expert Solution

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


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