Question

In: Accounting

Towncenter Furniture specializes in modern living room and dining room furniture. Merchandise sales are subject to...

Towncenter Furniture specializes in modern living room and dining room furniture. Merchandise sales are subject to an 8 percent sales tax. The firm’s credit sales and sales returns and allowances for February 2019 are reflected below, along with the general ledger accounts used to record these transactions. The balances shown are for the beginning of the month.

DATE TRANSACTIONS
Feb 1 Sold a living room sofa to Sun Yoo; issued Sales Slip 1615 for $4,790 plus sales tax of $383.20.
5 Sold three recliners to Jacqueline Moore; issued Sales Slip 1616 for $2,350 plus sales tax of $188.
9 Sold a dining room set to Hazel Tran; issued Sales Slip 1617 for $6,550 plus sales tax of $524.
11 Accepted a return of one damaged recliner from Jacqueline Moore that was originally sold on Sales Slip 1616 of February 5; issued Credit Memorandum 702 for $1,026, which includes sales tax of $76.00.
17 Sold living room tables and bookcases to Ann Brown; issued Sales Slip 1618 for $9,550 plus sales tax of $764.
23 Sold eight dining room chairs to Domingo Salas; issued Sales Slip 1619 for $3,650 plus sales tax of $292.
25 Gave Ann Brown an allowance for scratches on her bookcases; issued Credit Memorandum 703 for $702, which includes sales tax of $52; the bookcases were originally sold on Sales Slip 1618 of February 17.
27 Sold a living room sofa and four chairs to Jose Saucedo; issued Sales Slip 1620 for $4,225 plus sales tax of $338.
28 Sold a dining room table to Mimi Yuki; issued Sales Slip 1621 for $2,050 plus sales tax of $164.
28 Sold a living room modular wall unit to Alan Baker; issued Sales Slip 1622 for $3,900 plus sales tax of $312.

Solutions

Expert Solution

Recording the Transactions:

Journal Entries
Date Account Titles and Explanation Debit Credit
Feb. 1 Accounts Receivable ($4,790 + $383.20) $5,173.20
   Sales Revenue $4,790
   Sales Tax Payable $383.20
(To record the sale of living room sofa)
Feb. 5 Accounts Receivable ($2,350 + $188) $2,538
   Sales Revenue $2,350
   Sales Tax Payable $188
(To record the sale of three recliners)
Feb. 9 Accounts Receivable ($6,550 + $524) $7,074
   Sales Revenue $6,550
   Sales Tax Payable $524
(To recod the sale of dining room set)
Feb. 11 Sales Returns and Allowances $1,026
Sales Tax Payable $76
   Accounts Receiable ($1,026 + $76) $1,102
(To record the return of one recliner)
Feb. 17 Accounts Receivable ($9,550 + $764) $10,314
   Sales Revenue $9,550
   Sales Tax Payable $764
(To record the sale of living room tables and book cases)
Feb. 23 Accounts Receivable ($3,650 + $292) $3,942
   Sales Revenue $3,650
   Sales Tax Payable $292
(To record the sale of living room chairs)
Feb. 25 Sales Returns and Allowances $702
Sales Tax Payable $52
   Accounts Receiable ($702 + $52) $754
(To record the return of one bookcase)
Feb. 27 Accounts Receivable ($4,225 + $338) $4,563
   Sales Revenue $4,225
   Sales Tax Payable $338
(To record the sale of living room sofa and chairs)
Feb. 28 Accounts Receivable ($2,050 + $164) $2,214
   Sales Revenue $2,050
   Sales Tax Payable $164
(To record the sale of dining room table)
Feb. 28 Accounts Receivable ($3,900 + $312) $4,212
   Sales Revenue $3,900
   Sales Tax Payable $312
(To record the sale of living room modular)

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