Question

Problem 7-4A

Selected accounts from the chart of accounts of Mercer Company are shown below.

101		Cash		401		Sales Revenue
112		Accounts Receivable		412		Sales Returns and Allowances
120		Inventory		414		Sales Discounts
126		Supplies		505		Cost of Goods Sold
157		Equipment		726		Salaries and Wages Expense
201		Accounts Payable

The cost of all merchandise sold was 60% of the sales price. During January, Mercer completed the following transactions.

Jan. 3		Purchased merchandise on account from Gallagher Co. $10,200.
4		Purchased supplies for cash $70.
4		Sold merchandise on account to Wheeler $5,340, invoice no. 371, terms 1/10, n/30.
5		Returned $300 worth of damaged goods purchased on account from Gallagher Co. on January 3.
6		Made cash sales for the week totaling $3,700.
8		Purchased merchandise on account from Phegley Co. $5,100.
9		Sold merchandise on account to Linton Corp. $6,800, invoice no. 372, terms 1/10, n/30.
11		Purchased merchandise on account from Cora Co. $3,760.
13		Paid in full Gallagher Co. on account less a 2% discount.
13		Made cash sales for the week totaling $5,400.
15		Received payment from Linton Corp. for invoice no. 372.
15		Paid semi-monthly salaries of $14,200 to employees.
17		Received payment from Wheeler for invoice no. 371.
17		Sold merchandise on account to Delaney Co. $2,190, invoice no. 373, terms 1/10, n/30.
19		Purchased equipment on account from Dozier Corp. $5,270.
20		Cash sales for the week totaled $2,700.
20		Paid in full Phegley Co. on account less a 2% discount.
23		Purchased merchandise on account from Gallagher Co. $7,300.
24		Purchased merchandise on account from Atchison Corp. $5,070.
27		Made cash sales for the week totaling $4,340.
30		Received payment from Delaney Co. for invoice no. 373.
31		Paid semi-monthly salaries of $12,350 to employees.
31		Sold merchandise on account to Wheeler $9,740, invoice no. 374, terms 1/10, n/30.

Mercer Company uses the following journals.

1.		Sales journal.
2.		Single-column purchases journal.
3.		Cash receipts journal.
4.		Cash payments journal.
5.		General journal.

Using the selected accounts provided:

Record and Post the January transactions in the appropriate journal noted. Foot and cross-foot all special journals. (Record entries in the order displayed in the problem statement.)

PLEASE RECORD THE SALES JOURNAL, PURCHASES JOURNAL, GENERAL JOURNAL, CASH RECEIPTS JOURNAL, CASH PAYMENTS JOURNAL

Answer 1

(a)
			Sales journal		S1
Date           Jan	Account Debited	Invoice No.	Ref.	Accounts Receivable Dr. Sales Cr.	Cost Of Goods sold Dr. Merchandise Inventory Cr.
4	Wheeler	371	ü	$           5,340.00	$              3,204.00
9	Linton Corp.	372	ü	$           6,800.00	$              4,080.00
17	Delaney Co.	373	ü	$           2,190.00	$              1,314.00
31	Wheeler	374	ü	$           9,740.00	$              5,844.00
				$        24,070.00	$            14,442.00
(b)
		Purchases Journal			P1
Date           Jan	Account Debited		Ref.	Merchandise Inventory Dr.                                     Account Payable Cr.
3	Gallagher Co.		ü	$                                             10,200.00
8	Phegley Co		ü	$                                               5,100.00
11	Cora Co		ü	$                                             37,600.00
23	Gallagher Co.		ü	$                                               7,300.00
24	Atchison Corp.		ü	$                                               5,070.00
				$                                             65,270.00
(c)
		General Journal			G1
Date           Jan	Accounts And Explanation		Ref.	Debit	Credit
5	Accounts Payable - Gallagher Co.............		201/ü	$              300.00
	Merchandise Inventory..........		120		$                 300.00
19	Equipment.........		157	$           5,270.00
	Accounts Payable - Dozier Corp. ............		201/ü		$              5,270.00
(d)
		Cash Receipts Journal						CR1
Date           Jan	Account Debited	Ref	Cash Dr.	Sales Discount Dr.	Accounts Receivable Cr.	Sales Cr.	Other Accounts Cr.	Cost Of Goods sold Dr. Merchandise Inventory Cr.
6			$     3,700.00			$      3,700.00		$                       2,220.00
13			$     5,400.00			$      5,400.00		$                       3,240.00
15	Linton Corp.	ü	$     6,732.00	$                68.00	$              6,800.00
17	Wheeler	ü	$     5,340.00		$              5,340.00
20			$     2,700.00			$      2,700.00		$                       1,620.00
27			$     4,340.00			$      4,340.00		$                       2,604.00
30	Delaney Co.	ü	$     2,190.00		$              2,190.00
			$ 30,402.00	$                68.00	$            14,330.00	$   16,140.00	$               -	$                       9,684.00
(e)
		Cash Payment Journal				CP1
Date           Jan	Account Debited	Ref	Other Accounts Dr.	Accounts Receivable Dr.	Merchandise Inventory Cr.	Cash Cr.
4	supplies	126	$          70.00			$           70.00
13	Gallagher Co.	ü		$           9,900.00	$                 198.00	$      9,702.00
15	Salaries Expense	726	$ 14,200.00			$   14,200.00
20	Phegley Co.	ü		$           5,100.00	$                 102.00	$      4,998.00
31	Salaries Expense	726	$ 12,350.00			$   12,350.00
			$ 26,620.00	$        15,000.00	$                 300.00	$   41,320.00