Question

Review the related examples in the chapter, prepare a journal entry, balance the accounting equation, and prepare all the affected "T accounts" for the following accounting transaction:

a. On 12/08/2017, Toy Box Company purchased one thousand baseball bats that cost $3,000 on account and paid $30 cash to USPS for delivery charge (assume a perpetual inventory system is used).

b. Toy Box Company sold 10 baseball bats for $20 to KidsCo on account on 12/10/2017.

c. The auditor found that on 12/28/2017, 2 baseball bats were returned of the sales on 12/10/2017. Toy Box Company has not recorded this return.

Answer 1

Journal entry, accounting equation, and all the affected "T accounts" for the following accounting transaction is as prepared below:

	Date	Particulars	L.F	Amount ($)	Amount ($)
a.	Dec-08	Merchandise Inventory		3,000
		Delivery Charges		30
		Accounts Payable			3,000
		Cash			30
		(for goods purchased on credit)
b.	Dec-10	Accounts Receivable (10*20)		200
		sales			200
		(for goods sold on credit)
		Cost of goods sold		30
		Merchandise Inventory			30
		(For cost of goods sold recorded)
c.	Dec-28	Sales Return		40
		Accounts Receivable			40
		(for goods of $40 returned by customer)
		Merchandise Inventory		6
		Cost of goods sold			6
		(For cost of goods returned recorded)

	Cash	Merchandise Inventory	Accounts Receivable	Accounts Payable	sales	Sales Return	Cost of goods sold	Delivery Charges
Dec-08	-30	3,000		3,000				30
Dec-10		-30	200		200		30
Dec-28		6	-40			40	-6
	-30	2976	160	3000	200	40	24	30

Cash				sales
Particulars	Amount	Particulars	Amount	Particulars	Amount	Particulars	Amount
		Dec-08	30			Dec-10	200
Merchandise Inventory				Sales Return
Particulars	Amount	Particulars	Amount	Particulars	Amount	Particulars	Amount
Dec-08	3,000	Dec-10	30	Dec-28	40
Dec-28	6
Accounts Receivable				Cost of goods sold
Particulars	Amount	Particulars	Amount	Particulars	Amount	Particulars	Amount
Dec-10	200	Dec-28	40	Dec-10	30	Dec-28	6
Accounts Payable				Delivery Charges
Particulars	Amount	Particulars	Amount	Particulars	Amount	Particulars	Amount
		Dec-08	3,000	Dec-08	30