Question

The following were selected from among the transactions completed by Babcock Company during November of the current year:

Nov. 3.	Purchased merchandise on account from Moonlight Co., list price $82,000, trade discount 25%, terms FOB destination, 2/10, n/30.
4.	Sold merchandise for cash, $40,700. The cost of the goods sold was $22,290.
5.	Purchased merchandise on account from Papoose Creek Co., $49,000, terms FOB shipping point, 2/10, n/30, with prepaid freight of $780 added to the invoice.
6.	Returned $15,000 ($20,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co.
8.	Sold merchandise on account to Quinn Co., $16,790 with terms n/15. The cost of the merchandise sold was $9,870.
13.	Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
14.	Sold merchandise on VISA, $219,080. The cost of the goods sold was $147,900.
15.	Paid Papoose Creek Co. on account for purchase of November 5.
23.	Received cash on account from sale of November 8 to Quinn Co.
24.	Sold merchandise on account to Rabel Co., $60,500, terms 1/10, n/30. The cost of the goods sold was $32,170.
28.	Paid VISA service fee of $3,370.
30.	Paid Quinn Co. a cash refund of $6,040 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,450.

Required:

Journalize the transactions.

Answer 1

Date	Accounts and Explanation	Debit	Credit
3-Nov	Merchandise inventory (82000*75%)	$     61,500.00
	Accounts payable- Moonlight		$     61,500.00
	( To record the purchase of inventory on account at a trade discount 25%)
4-Nov	Cash	$     40,700.00
	Sales revenue		$     40,700.00
	( To record the sale of merchandise inventory for cash)
	Cost of goods sold	$     22,290.00
	Merchandise inventory		$     22,290.00
	( To record the cost of goods sold)
5-Nov	Merchandise inventory (49000+780)	$     49,780.00
	Accounts payable-papoose		$     49,780.00
	( To record the purchase of inventory on account)
6-Nov	Accounts payable - MoonLight	$     15,000.00
	Merchandise inventory (20000*75%)		$     15,000.00
	( To record the purchase returns)
8-Nov	Accounts Receivable - Quinn	$     16,790.00
	Sales revenue		$     16,790.00
	( To record the sales on account to Quinn)
	Cost of goods sold	$       9,870.00
	Merchandise inventory		$       9,870.00
	( To record the cost of goods sold)
13-Nov	Accounts payable - MoonLight (61500-15000)	$     46,500.00
	Merchandise inventory (46500*2%)		$           930.00
	Cash (46500*98%)		$     45,570.00
	( To record the payment towards accounts payable to Moonlight
14-Nov	Cash	$ 219,080.00
	Sales revenue		$ 219,080.00
	( To record the sales by cash)
	Cost of goods sold	$ 147,900.00
	merchandise inventory		$ 147,900.00
	( To record the cost of goods sold)
15-Nov	Accounts payable - papoose	$     49,780.00
	Merchandise inventory (49780*2%)		$           995.60
	Cash		$     48,784.40
	( To record the payment of cash towards accounts payable to papoose
23-Nov	cash	$     16,790.00
	Accounts Receivable - Quinn		$     16,790.00
	( To record the receipt of cash from accounts receivable from Quinn
24-Nov	Accounts receivable-Rabel	$     60,500.00
	Sales revenue		$     60,500.00
	( To record the sale on credit to Rabel
	Cost of goods sold	$     32,170.00
	Merchandise inventory		$     32,170.00
	( To record the cost of goods sold)
24-Nov	Credit card Expense	$       3,370.00
	Cash		$       3,370.00
	( To record the payment of visa service fees
30-Nov	sales returns and allowances	$       6,040.00
	Cash		$       6,040.00
	( To record the sales return)
	merchandise inventory	$       3,450.00
	Cost of goods sold		$       3,450.00
	( To record the reversal of cost of goods sold)