Question

Problem 5-02A a-c (Part Level Submission) (Video) Sunland Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Sunland showed Cash of $4,500 and Owner’s Capital of $4,500. May 1 Purchased merchandise on account from Braun's Wholesale Supply $3,900, terms 2/10, n/30. 2 Sold merchandise on account $2,500, terms 1/10, n/30. The cost of the merchandise sold was $1,600. 5 Received credit from Braun's Wholesale Supply for merchandise returned $400. 9 Received collections in full, less discounts, from customers billed on sales of $2,500 on May 2. 10 Paid Braun's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $300. 12 Purchased merchandise for cash $1,300. 15 Received refund for poor quality merchandise from supplier on cash purchase $150. 17 Purchased merchandise from Valley Distributors $1,200, FOB shipping point, terms 2/10, n/30. 19 Paid freight on May 17 purchase $170. 24 Sold merchandise for cash $3,500. The merchandise sold had a cost of $2,100. 25 Purchased merchandise on account from Lumley, Inc. $700, FOB destination, terms 2/10, n/30. 27 Paid Valley Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $40. 31 Sold merchandise on account $1,000, terms n/30. The cost of the merchandise sold was $600. Sunland 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

01-May	Inventory	3900
	Accounts payable		3900
May-02	Accounts receivable	2500
	Sales revenue		2500
	Cost of goods sold	1600
	Inventory		1600
05-May	Accounts payable	400
	Inventory		400
09-May	Cash	2475
	Sales discount	25
	Accounts receivable		2500
10-May	Accounts payable	3500
	Inventory		70
	Cash		3430
11-May	Supplies	300
	Cash		300
12-May	Inventory	1300
	Cash		1300
15-May	Cash	150
	Inventory		150
17-May	Inventory	1200
	Accounts payable		1200
19-May	Inventory	170
	Cash		170
24-May	Cash	3500
	Sales revenue		3500
	Cost of goods sold	2100
	Inventory		2100
25-May	Inventory	700
	Accounts payable		700
27-May	Accounts payable	1200
	Inventory		24
	Cash		1176
29-May	Sales return and allowance	70
	Cash		70
	Inventory	40
	Cost of goods sold		40
31-May	Accounts receivable	1000
	Sales revenue		1000
	Cost of goods sold	600
	Inventory		600