Question

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

Oct.	1	Purchased merchandise from UK Imports Co., $14,448, terms FOB destination, n/30.
	3	Purchased merchandise from Hoagie Co., $9,950, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $220 was added to the invoice.
	4	Purchased merchandise from Taco Co., $13,650, terms FOB destination, 2/10, n/30.
	6	Issued debit memo to Taco Co. for $4,550 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., $27,300, terms FOB shipping point, n/eom.
	19	Paid freight of $400 on October 19 purchase from Veggie Co.
	20	Purchased merchandise from Caesar Salad Co., $22,000, 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 exact wording of account titles.

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

Answer 1

Solution:

Journal Entries - Capers Company
Date	Particulars	Debit	Credit
1-Oct	Merchandise Inventory Dr	$14,448.00
	To Accounts Payable-UK Imports Co.		$14,448.00
	(Being goods purchased on FOB destination terms)
3-Oct	Merchandise Inventory Dr	$10,170.00
	To Accounts Payable-Hoagie Co		$10,170.00
	(Being goods purchased on FOB shipping point, terms 2/10, n/eom)
4-Oct	Merchandise Inventory Dr	$13,650.00
	To Accounts Payable-Taco Co.		$13,650.00
	(Being goods purchased on FOB destination terms 2/10, n/30)
6-Oct	Accounts Payable-Taco Co. Dr	$4,550.00
	To Merchandise Inventory		$4,550.00
	(Being goods returned and debit to creditor)
13-Oct	Accounts Payable-Hoagie Co Dr	$10,170.00
	To Estimated Returns Inventory		$199.00
	To Cash ($9,950*98% + $220)		$9,971.00
	(Being payment made and discount accounted for)
14-Oct	Accounts Payable-Taco Co. Dr	$9,100.00
	To Estimated Returns Inventory		$182.00
	To Cash [($13,650-4550)*98%]		$8,918.00
	(Being payment made and discount account for)
19-Oct	Merchandise Inventory Dr	$27,300.00
	To Accounts Payable-Veggie Co		$27,300.00
	(Being goods purchased on FOB shipping point, terms n/eom)
19-Oct	Merchandise Inventory Dr	$400.00
	To Cash		$400.00
	(Being frieght paid on veggie co purchase)
20-Oct	Merchandise Inventory Dr	$22,000.00
	To Accounts Payable-Caesar Salad Co		$22,000.00
	(Being goods purchased on FOB destination terms, 1/10, n/30)
30-Dec	Accounts Payable-Caesar Salad Co Dr	$22,000.00
	To Estimated Returns Inventory		$220.00
	To Cash ($22,000*99%)		$21,780.00
	(Being payment made and discount account for)
31-Dec	Accounts Payable-UK Imports Co. Dr	$14,448.00
	To Cash		$14,448.00
	(Being payment made)
31-Dec	Accounts Payable-Veggie Co Dr	$27,300.00
	To Cash		$27,300.00
	(Being payment made)