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

  Essex Company  

Journal Entries (Amounts in $)

Date	Account Titles	Debit	Credit
July 3	Purchases ($72,000*85%)	61,200
	Accounts Payable-Hamling Co.		61,200
July 5	Purchases	33,450
	Accounts Payable-Kester Co.		33,450
July 6	Accounts Receivable-Parsley Co.	36,000
	Sales		36,000
July 7	Accounts Payable-Kester Co.	6,850
	Purchases returns and allowances		6,850
July 13	Accounts Payable-Hamling Co.	61,200
	Cash ($61,200 - $1,224)		59,976
	Purchases Discounts ($61,200*2%)		1,224
July 15	Accounts Payable-Kester Co. ($33,450-$6,850)	26,600
	Cash ($26,600-$532)		26,068
	Purchases Discounts ($26,600*2%)		532
July 21	Cash	36,000
	Accounts Receivable-Parsley Co.		36,000
July 21	Cash	108,000
	Sales		108,000
July 22	Accounts Receivable-Tabor Co.	16,650
	Sales		16,650
July 23	Cash	91,200
	Sales		91,200
July 28	Sales returns and allowances	7,150
	Cash		7,150
July 31	Credit Card Expense	1,650
	Cash		1,650