Question

Consider the following perpetual system merchandising transactions of Belton Company. Use a separate account for each receivable and payable; for example, record the sale on June 1 in Accounts Receivable—Avery & Wiest.

June	1	Sold merchandise to Avery & Wiest for $9,600; terms 3/5, n/15, FOB destination (cost of sales $6,750).
	2	Purchased $5,000 of merchandise from Angolac Suppliers; terms 2/10, n/20, FOB shipping point.
	4	Purchased merchandise inventory from Bastille Sales for $11,600; terms 2/15, n/45, FOB Bastille Sales.
	5	Sold merchandise to Gelgar for $11,200; terms 3/5, n/15, FOB destination (cost of sales $7,800).
	6	Collected the amount owing from Avery & Wiest regarding the June 1 sale.
	12	Paid Angolac Suppliers for the June 2 purchase.
	20	Collected the amount owing from Gelgar regarding the June 5 sale.
	30	Paid Bastille Sales for the June 4 purchase.

Prepare General Journal entries to record the above transactions.

Part 2:

Based on the information provided above, calculate the following:

a. Calculate Net sales.

b. Calculate Cost of goods sold.

c. Calculate Gross profit from sales.

Answer 1

1	Date	Account Titles and Explanation	Debit	Credit
	June 1	Accounts Receivable-Avery & Wiest.	$9,600
		Sales Revenue		$9,600
		(To record sales revenue)
		Cost of Goods Sold	$6,750
		Merchandise Inventory		$6,750
		(To record cost of goods sold)
	June 2	Merchandise Inventory	$5,000
		Accounts Payable - Angolac Suppliers		$5,000
		(To record purchase of merchandise)
	June 4	Merchandise Inventory	$11,600
		Accounts Payable - Bastille Sales		$11,600
		(To record purchase of merchandise)
	June 5	Accounts Receivable-Gelgar	$11,200
		Sales Revenue		$11,200
		(To record sales revenue)
		Cost of Goods Sold	$7,800
		Merchandise Inventory		$7,800
		(To record cost of goods sold)
	June 6	Cash	$9,312
		Sales Discounts	$288		($9,600 x 3%)
		Accounts Receivable-Avery & Wiest.		$9,600
		(To record collection form accounts receivable)
	June 12	Accounts Payable - Angolac Suppliers	$5,000
		Merchandise Inventory		$100	($5,000 x 2%)
		Cash		$4,900
		(To record cash payment to accounts payable)
	June 20	Cash	$11,200
		Accounts Receivable-Avery & Wiest.		$11,200
		(To record collection form accounts receivable)
	June 12	Accounts Payable - Angolac Suppliers	$11,600
		Cash		$11,600
		(To record cash payment to accounts payable)
2		Sales	$20,800
		Less: Sales discounts	$288
		Net Sales.	$20,512
		Less: Cost of goods sold	$14,450
		Gross Profit	$6,062