Question

1) A) Joy company bought $8000 of merchandise on account, terms 2/10 net 30

B) Joy returned $2000 of the merchandise

C) Joy had a cash sale of $10,000; the cost of the merchandise was $4500

D) Joy sold $12,000 on account terms 1/10 net 30; cost of the merchandise was $5500

E) Paid for the purchase in A, less the return.

F) Received payment from the sale in D.

2) A) BC company bought $18000 of merchandise on account, terms 1/10 net 30

B) BC returned $12000 of the merchandise

C) BC had a sale of $10,000 terms 2/10 net 30; the cost of the merchandise was $4500

D) BC sold $2,000 for cash; cost of the merchandise was $500

E) Paid for the purchase in A, less the return.

F) Received payment from the sale in C. It had two parts numbers 1 & 2 and each of those has 5 journal entries to do.

Answer 1

1. Journal entries in the books of Joy Company:

S.no	general journal	Debit	Credit
A	Merchandise a/c or Inventory a/c To Accounts payable a/c (Being marchandise purchased on credit basis)	$8,000	$8,000
B	Accounts payables a/c To Merchandise a/c or inventory a/c (Being Merchandise purchased returned)	$2,000	$2,000
C	Cash a/c Cost of goods sold a/c To Merchandise a/c or Inventory a/c To Sales revenue a/c (Being Merchandise sold)	$10,000 $4,500	$4,500 $10,000
D	Accounts recivable a/c Cost of goods sold a/c To Merchandise a/c or Inventory a/c To Sales revenue a/c (being mechandise sold on credit basis)	$12,000 $5,500	$5,500 $12,000
E	Accounts payable a/c To Cash a/c (Being amount paid for the merchandise)	$6,000	$6,000

2. Journal entries in the books of BC company:

S.no	general journal	Debit	Credit
A	Merchandise a/c or Inventory a/c To Accounts payable a/c (Being marchandise purchased on credit basis)	$18,000	$18,000
B	Accounts payables a/c To Merchandise a/c or inventory a/c (Being Merchandise purchased returned)	$12,000	$12,000
C	Accounts recivable a/c Cost of goods sold a/c To Merchandise a/c or Inventory a/c To Sales revenue a/c (being mechandise sold on credit basis)	$10,000 $4,500	$4,500 $10,000
D	Cash a/c Cost of goods sold a/c To Merchandise a/c or Inventory a/c To Sales revenue a/c (Being Merchandise sold)	$2,000 $500	$500 $2,000
E	Accounts payable a/c To Cash a/c (Being amount paid for the merchandise)	$6,000	$6,000

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