Question

The 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 $93,000, trade discount 25%, terms FOB destination, 2/10, n/30.
	4	Sold merchandise for cash, $34,100. The cost of the merchandise sold was $22,080.
	5	Purchased merchandise on account from Papoose Creek Co., $43,650, terms FOB shipping point, 2/10, n/30, with prepaid freight of $750 added to the invoice.
	6	Returned $15,000 ($20,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co.
	8	Sold merchandise on account to Quinn Co., $15,270 with terms n/15. The cost of the merchandise sold was $8,940.
	13	Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
	14	Sold merchandise on VISA, $229,890. The cost of the merchandise sold was $153,500.
	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., $51,300, terms 1/10, n/30. The cost of the merchandise sold was $33,280.
	28	Paid VISA service fee of $3,410.
	30	Paid Quinn Co. a cash refund of $5,610 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,180.

Required:

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

X

Journal

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

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

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JOURNAL

ACCOUNTING EQUATION

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Answer 1

Journal entries are as follows:

Date	Account and Explanation	Debit($)	Credit($)
Nov.3	Merchandise Inventory ( $93,000 * 0.75)	69,750
	Account Payable - Moonlight Co.		69,750
	(Recorded the purchase of Inventory )
Nov. 4	Cash	34,100
	Sales		34,100
	(Recorded the cash sales )
Nov. 4	Cost of goods sold	22,080
	Merchandise Inventory		22,080
	(Recorded the Cost of goods sold)
Nov.5	Merchandise Inventory ( $43,650 + $750 )	44,400
	Account Payable - Papoose Creek Co.		44,400
	(Recorded the purchase of inventory)
Nov.6	Account Payable - Moonlight Co.	15,000
	Merchandise Inventory		15,000
	(Recorded the return of Inventory )
Nov.8	Account Receivable - Quinn Co.	15,270
	Sales		15,270
	(Recorded the sales on account )
Nov.8	Cost of goods sold	8,940
	Merchandise Inventory		8,940
	(Recorded the cost of goods sold)
Nov. 13	Account Payable - Moonlight Co ($69,750 - $15,000)	54,750
	Cash		53,655
	Merchandise Inventory ( $54,750 * 2%)		1,095
	(Recorded the payment of material)
Nov.14	Cash	229,890
	Sales		229,890
	(Recorded the cash sales )
Nov.14	Cost of Goods Sold	153,500
	Merchandise Inventory		153,500
	(Recorded the cost of goods sold)
Nov.15	Account Payable - Papoose Creek Co	44,400
	Cash		43,527
	Merchandise Inventory ( $43,650 *2%)		873
	(Recorded the payment of cash )
Nov. 23	Cash	15,270
	Account Receivable - Quinn Co.		15,270
	(Recorded that cash received from customer)
Nov. 24	Account Receivable - Rabel Co.	51,300
	Sales		51,300
	(Recorded the sales on account)
Nov. 24	Cost of goods sold	33,280
	Merchandise Inventory		33,280
	(Recorded the Cost of goods sold)
Nov. 28	VISA service fee (Credit Card)	3,410
	Cash		3,410
	(Recorded the payment of VISA service fee)
Nov. 30	Sales Return and Allowance	5,610
	Cash		5,610
	(Recorded the cash refund on sales return)
Nov. 30	Merchandise Inventory	3,180
	Cost of goods sold		3,180
	(Recorded the Cost of goods sold )