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In: Accounting

The following information applies to the questions displayed below.] The trial balance for Terry’s Auto Shop...

The following information applies to the questions displayed below.]

The trial balance for Terry’s Auto Shop as of January 1, Year 2, follows:

Account Titles Debit Credit
Cash $ 14,860
Inventory 3,060
Common Stock $ 7,350
Retained Earnings 10,570
Total $ 17,920 $ 17,920


The following events affected the company during the Year 2 accounting period:

  1. Purchased merchandise on account that cost $4,130.
  2. The goods in Event 1 were purchased FOB shipping point with freight cost of $225 cash.
  3. Returned $420 of damaged merchandise for credit on account.
  4. Agreed to keep other damaged merchandise for which the company received an $220 allowance.
  5. Sold merchandise that cost $2,650 for $13,800 cash.
  6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $130 cash.
  7. Paid $2,980 on the merchandise purchased in Event 1.
  8. Paid $8,820 cash for operating expenses.

Exercise 4-12A Part a

Required
a. Record the events in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Open general ledger T-accounts with the appropriate beginning balances, and post the journal entries to the T-accounts.

Solutions

Expert Solution

1. Journal Entries -

2. Ledgers -

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ekkarill92 answered 1 year ago
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