Question

The following selected transactions were completed by Capers Company during October of the current year:

Oct.	1	Purchased merchandise from UK Imports Co., $13,377, terms FOB destination, n/30.
	3	Purchased merchandise from Hoagie Co., $10,650, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $230 was added to the invoice.
	4	Purchased merchandise from Taco Co., $14,350, terms FOB destination, 2/10, n/30.
	6	Issued debit memo to Taco Co. for $5,000 of merchandise returned from purchase on October 4.
	13	Paid Hoagie Co. for invoice of October 3.
	14	Paid Taco Co. for invoice of October 4 less debit memo of October 6.
	19	Purchased merchandise from Veggie Co., $25,850, terms FOB shipping point, n/eom.
	19	Paid freight of $430 on October 19 purchase from Veggie Co.
	20	Purchased merchandise from Caesar Salad Co., $23,000, terms FOB destination, 1/10, n/30.
	30	Paid Caesar Salad Co. for invoice of October 20.
	31	Paid UK Imports Co. for invoice of October 1.
	31	Paid Veggie Co. for invoice of October 19.

Journalize the entries to record the transactions of Capers Company for October. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

Chart of Accounts

CHART OF ACCOUNTS
Capers Company
General Ledger
ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Merchandise Inventory 131 Estimated Returns Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 211 Accounts Payable-Caesar Salad Co. 212 Accounts Payable-Hoagie Co. 213 Accounts Payable-Taco Co. 214 Accounts Payable-UK Imports Co. 215 Accounts Payable-Veggie Co. 216 Salaries Payable 218 Sales Tax Payable 219 Customers Refunds Payable 221 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 521 Delivery Expense 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 526 Salaries Expense 531 Rent Expense 533 Insurance Expense 534 Store Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 539 Miscellaneous Expense 710 Interest Expense

Journal

Shaded cells have feedback.

Journalize the entries to record the transactions of Capers Company for October. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

Score: 22/301

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

Points:

4.39 / 60

Feedback

Check My Work

Journalize these transactions from the buyer's perspective. Discounts are taken on the amount owed to the seller, except for any freight costs.

Oct. 1, 3, 4, 19, & 20: Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Under FOB shipping point, freight is paid by the buyer, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.

Oct. 6: Any discounts or returns are recorded directly by the buyer who debits Accounts Payable and credits Merchandise Inventory, basically reversing what was done in recording the purchase.

Oct. 19: Freight expense increases the cost of the merchandise. However, freight is typically prepaid in cash.

Oct. 13: Since the invoice is paid within the discount period, the cash paid on account is the difference between the invoice and the discount.

Oct. 14: Returns are not eligible for discounts. Since the invoice is paid within the discount period, Accounts Payable is debited for the balance in the account. The cash paid on account is the difference between the invoice and the discount, less the returns.

Oct. 30: Since the invoice is paid within the discount period, the cash paid on account is the difference between the invoice and the discount.

Oct. 31 (UK Imports & Veggie): Since no discounts are allowed, no discounts are recorded. The cash paid on account in each case is equal to the invoice.

Answer 1

Date	Account Titles	Debit	Credit
Oct-01	Merchandise Inventory	$         13,377
	Accounts Payable - UK Imports Co.		$          13,377
Oct-03	Merchandise Inventory	$         10,880
	Accounts Payable - Hoagie Co.		$          10,880
Oct-04	Merchandise Inventory	$         14,350
	Accounts Payable - Taco Co.		$          14,350
Oct-06	Accounts Payable - Taco Co.	$           5,000
	Merchandise Inventory		$            5,000
Oct-13	Accounts Payable - Hoagie Co.	$         10,880
	Merchandise Inventory		$               213
	Cash		$          10,667
Oct-14	Accounts Payable - Taco Co.	$           9,350
	Merchandise Inventory		$               187
	Cash		$            9,163
Oct-19	Merchandise Inventory	$         25,850
	Accounts Payable - Veggie Co.		$          25,850
Oct-19	Merchandise Inventory	$               430
	Cash		$               430
Oct-20	Merchandise Inventory	$         23,000
	Accounts Payable - Caesar Salad Co.		$          23,000
Oct-30	Accounts Payable - Caesar Salad Co.	$         23,000
	Merchandise Inventory		$               230
	Cash		$          22,770
Oct-31	Accounts Payable - UK Imports Co.	$         13,377
	Cash		$          13,377
Oct-31	Accounts Payable - Veggie Co.	$         25,850
	Cash		$          25,850