Question

Sales-Related Transactions Using Perpetual Inventory System

The following selected transactions were completed by Green Lawn Supplies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers:

July 1.	Sold merchandise on account to Landscapes Co., $12,300, terms FOB shipping point, n/eom. The cost of merchandise sold was $7,400.
2.	Sold merchandise for $27,800 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $18,100.
5.	Sold merchandise on account to Peacock Company, $36,000, terms FOB destination, 1/10, n/30. The cost of merchandise sold was $23,400.
8.	Sold merchandise for $12,100 plus 5% sales tax to retail customers who used VISA cards. The cost of merchandise sold was $7,300.
13.	Sold merchandise to customers who used MasterCard cards, $7,000. The cost of merchandise sold was $4,400.
14.	Sold merchandise on account to Loeb Co., $14,600, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $8,600.
15.	Received check for amount due from Peacock Company for sale on July 5.
16.	Issued credit memo for $2,200 to Loeb Co. for merchandise returned from sale on July 14. The cost of the merchandise returned was $1,200.
18.	Sold merchandise on account to Jennings Company, $7,400, terms FOB shipping point, 2/10, n/30. Paid $220 for freight and added it to the invoice. The cost of merchandise sold was $4,400.
24.	Received check for amount due from Loeb Co. for sale on July 14 less credit memo of July 16.
28.	Received check for amount due from Jennings Company for sale of July 18.
31.	Paid Black Lab Delivery Service $1,610 for merchandise delivered during July to customers under shipping terms of FOB destination.
31.	Received check for amount due from Landscapes Co. for sale of July 1.
Aug. 3.	Paid Hays Federal Bank $960 for service fees for handling MasterCard and VISA sales during July
10.	Paid $2,610 to state sales tax division for taxes owed on sales.

Required:

Journalize the entries to record the transactions of Green Lawn Supplies Co. For a compound transaction, if no entry is required, leave the entry box blank.

Answer 1

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Step 1:

Journal

Journal entries record the transactions of the business in its accounting books. Transactions having monetary value are recorded. It is the primary books of accounts where transactions are firstly recorded.

Step 2:

JOURNAL ENTRIES

In the Books of Green Lawn Supplies Co.

      

Date	Particular	L.F.	Debit (in $)	Credit (in $)
July 1	Account receivable		12,300
	Sale			12,300
	(to record the credit sale)
July 1	Cost of goods sold		7,400
	inventory			7,400
	(to record cost part of goods sold)
July 2	Cash		29,468
	Sale			27,800
	Sales tax payable			1,668
	(to record credit sales plus 6% sales tax)
July 2	Cost of goods sold		18,100
	Inventory			18,100
	(to record cost part of goods sold)
July 5	Account receivable		36,000
	Sales			36,000
	(to record the credit sale)
July 5	Cost of goods sold		23,400
	Inventory			23,400
	(to record cost part of goods sold)
July 8	Cash		12,705
	Sale			12,100
	Sales tax payable			605
	(to record credit sales plus 5% sales tax)
July 8	Cost of goods sold		7,300
	Inventory			7,300
	(to record cost part of goods sold)
July 13	cash		7,000
	Sales			7,000
	(to record the cash sale)
July 13	Cost of goods sold		4,400
	Inventory			,400
	(to record cost part of goods sold)
July 14	Account receivable		14,600
	Sales			14,600
	(to record the credit sale)
July 14	Cost of goods sold		8,600
	Inventory			8,600
	(to record cost part of goods sold)
July 15	Cash		36,057
	Discount			357
	Account receivable			35,700
	(to record received from Peacock company allowed discount of 1%)
July 16	Sales return		2,200
	Account receivable			2,200
	(to record sales return by customer)
July 16	Inventory		1,200
	Cost of goods sold			1,200
	(to record sale return by customer in inventory)
July 18	Freight charges
	Cash		220
	(to record freight paid)			220
July 18	Account receivable		7,600
	Sales			7,400
	Freight charges			220
	(to record sales to customer on credit )
July 18	Cost of goods sold		4,400
	Inventory			4,400
	(to record cost part of goods sold)
July 24	Cash		12,276
	Discount		124
	Account receivable			12,400
	(to record cash received from customer and allowed discount of 1%)
July 28	Cash		7,252
	Discount		148
	Account receivable			7,400
	(to record cash received from customer and allowed discount of 2%)
July 31	Delivery expense		1,610
	Cash			1,610
	(to record delivery expense paid)
July 31	Cash		12,300
	Account receivable			12,300
	(to record cash received from customer)
Aug 3	Federal bank service charges		960
	Cash			960
	(to record bank services paid)
Aug 10	Sales tax payable		2,610
	Cash			2,610
	(to record sales tax paid)