Question

Prepare journal entries to record the following merchandising transactions of Zhang's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable—Turner.)

Jul.		1		Purchased merchandise from Turner Company for $11,800 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.
Jul.		2		Sold merchandise to Hall Co. for $3,800 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $2,280.
Jul.		3		Paid $1,285 cash for freight charges on the purchase of July 1.
Jul.		8		Sold merchandise that had cost $4,500 for $7,500 cash.
Jul.		9		Purchased merchandise from Clinton Co. for $5,100 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
Jul.		11		Received a $1,000 credit memorandum from Clinton Co. for the return of part of the merchandise purchased on July 9.
Jul.		12		Received the balance due from Hall Co. for the invoice dated July 2, net of the discount.
Jul.		16		Paid the balance due to Turner Company within the discount period.
Jul.		19		Sold merchandise that cost $4,900 to Thompson Co. for $7,000 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
Jul.		21		Issued a $1,400 credit memorandum to Thompson Co. for an allowance on goods sold on July 19.
Jul.		24		Paid Clinton Co. the balance due, net of discount.
Jul.		30		Received the balance due from Thompson Co. for the invoice dated July 19, net of discount.
Jul.		31		Sold merchandise that cost $7,700 to Hall Co. for $12,800 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

• General Journal
• General Ledger
• Trial Balance
• Schedule of Receivables
• Schedule of Payables
• Income Statement
• Impact on Income

Answer 1

Date	General Journal					Debit	Credit
1-Jul	Merchandise inventory					11,800
	Accounts payable-Turner						11,800
2-Jul	Accounts receivable-Hall co					3,800
	Sales						3,800
	cost of goods sold					2280
	Merchandise inventory						2280
3-Jul	Merchandise inventory					1285
	cash						1285
8-Jul	Cash					7,500
	sales						7,500
	cost of goods sold					4,500
	Merchandise inventory						4,500
9-Jul	Merchandise inventory					5,100
	Accounts payable-Clinton co						5,100
11-Jul	Accounts payable-Clinton co					1000
	merchandise inventory						1000
12-Jul	Cash					3,724
	Sales discount					76
	Accounts receivable-hall co						3,800
16-Jul	Accounts payable-Turner					11,800
	Merchandise inventory						118
	cash						11682
19-Jul	Accounts receivable-Thompson					7,000
	Sales						7,000
	Cost of goods sold					4,900
	Merchandise inventoy						4,900
21-Jul	Sales return and allowance					1400
	Accounts receivable-Thompson co						1400
24-Aug	Accounts payable-Clintont co					4,100
	Merchandise inventory						82
	Cash						4018
30-Jul	Cash					5488
	Sales discount					112
	Accounts receivable-Thompson co						5,600
31-Jul	Accounts recievable-Hall co					12,800
	Sales						12,800
	Merchandise inventory					7,700
	Cost of goods sold						7,700