Question

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

July 3.	Purchased merchandise on account from Hamling Co., list price $72,000, trade discount 15%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $1,450 added to the invoice.
5.	Purchased merchandise on account from Kester Co., $33,450, terms FOB destination, 2/10, n/30.
6.	Sold merchandise on account to Parsley Co., $36,000, terms n/15. The cost of the merchandise sold was $25,000.
7.	Returned $6,850 of merchandise purchased on July 5 from Kester Co.
13.	Paid Hamling Co. on account for purchase of July 3.
15.	Paid Kester Co. on account for purchase of July 5, less return of July 7.
21.	Received cash on account from sale of July 6 to Parsley Co.
21.	Sold merchandise on MasterCard, $108,000. The cost of the merchandise sold was $64,800.
22.	Sold merchandise on account to Tabor Co., $16,650, terms 2/10, n/30. The cost of the merchandise sold was $10,000.
23.	Sold merchandise for cash, $91,200. The cost of the merchandise sold was $55,000.
28.	Paid Parsley Co. a cash refund of $7,150 for returned merchandise from sale of July 6. The cost of the returned merchandise was $4,250.
31.	Paid MasterCard service fee of $1,650.

Required:

Journalize the entries to record the transactions of Essex Company for July using the periodic inventory system.

For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

	Date	Account titles & Explanations					Debit	Credit
	3-Jul	Merchandise inventory					61426
		Accounts payable-Hamling co						61426
		(72000*85%=		61200	)
		(61200*98%+1450=		61426
	5-Jul	Merchandise inventory					32,781
		Accounts payable -		Kester co				32,781
	6-Jul	Accounts receivable		Parsley co			36,000
		Sales						36,000
		Cost of goods sold					25,000
		Merchandise inventory						25,000
	7-Jul	Accounts payable -		kester co			6,850
		Merchandise inventory						6,850
	13-Jul	Accounts payable-Hamling co					61426
		Cash						61426
	15-Jul	Accounts payable-kester co					25,931
		Cash						25,931
	21-Jul	Cash					36,000
		Accounts receivable		Parsley co				36,000
	21-Jul	Cash					108,000
		Sales						108,000
		Cost of good sold					64,800
		Merchandise inventory						64,800
	22-Jul	Accounts receivable		Tabor			16,317
		Sales						16,317
		Cost of goods sold					10,000
		Merchandise inventory						10,000
	23-Jul	Cash					91,200
		Sales						91,200
		Cost of good sold					55,000
		Merchandise inventory						55,000
	28-Jul	Customer refunds payable					7,150
		Cash						7,150
		Merchandise inventory					4,250
		Estimated returns inventory						4,250
	31-Jul	Credit card expense					1,650
		cash						1,650