In: Accounting
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
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capers Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Journal
Shaded cells have feedback.
Journalize the entries to record the transactions of Capers Company for October. Refer to the Chart of Accounts for exact wording of account titles.
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PAGE 10
JOURNAL
ACCOUNTING EQUATION
Score: 275/301
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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1 |
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14 |
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22 |
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23 |
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24 |
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Points:
54.82 / 60
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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.
Prepare journal entries as follows:
Date | Account Titles and Explanation | Debit | Credit | Assets | = | Liability | + | Equity | |
Oct. 01 | Merchandise Inventory | $14,448 | $14,448 | ||||||
Accounts payable | $14,448 | $14,448 | |||||||
(To record purchase of merchandise from U.K imports co.) | |||||||||
Oct. 03 | Inventory ($9950+$220) | $10,170 | $10,170 | ||||||
Accounts payable | $10,170 | $10,170 | |||||||
(To record purchase of inventory from Hogi co. including freight) | |||||||||
Oct. 04 | Inventory | $13,650 | $13,650 | ||||||
Accounts payable | $13,650 | $13,650 | |||||||
(To record purchase of inventory from Taco co.) | |||||||||
Oct. 06 | Accounts payable | $4,550 | ($4,550) | ||||||
Inventory | $4,550 | ($4,550) | |||||||
(To record return of inventory to Taco co.) | |||||||||
Oct. 13 | Accounts payable | $10,170 | ($10,170) | ||||||
Cash ($10,170 - $865) | $9,971 | ($9,971) | |||||||
Inventory ($9950 × 2%) | $199 | ($199) | |||||||
(To record payment to Hogie co.) | |||||||||
Oct. 14 | Accounts payable ($13650 -$4550) | $9,100 | ($9,100) | ||||||
Cash | $8,918 | ($8,918) | |||||||
Inventory ($9100 × 2%) | $182 | ($182) | |||||||
(To record the payment made and discount availed) | |||||||||
Oct. 19 | Inventory | $27,300 | $27,300 | ||||||
Accounts payable | $27,300 | $27,300 | |||||||
(To record purchase from veggie co.) | |||||||||
Oct. 19 | Inventory | $400 | $400 | ||||||
Cash | $400 | ($400) | |||||||
(To record payment of freight on veggie co. purchase) | |||||||||
Oct. 20 | Inventory | $22,000 | $22,000 | ||||||
Accounts payable | $22,000 | $22,000 | |||||||
(To record inventory purchase from ceasar co.) | |||||||||
Oct. 30 | Accounts payable | $22,000 | ($22,000) | ||||||
Cash ($22000 - $130) | $21,780 | ($21,780) | |||||||
Inventory ($22000 × 1%) | $220 | ($220) | |||||||
(To record payments to ceasar co.) | |||||||||
Oct. 31 | Accounts payable | $14,448 | ($14,448) | ||||||
Cash | $14,448 | ($14,448) | |||||||
(To record payment made to U.K I.C for inventory) | |||||||||
Oct. 31 | Accounts payable | $27,300 | ($27,300) | ||||||
Cash | $27,300 | ($27,300) | |||||||
(To record payments to veggie co.) |