Question

Sales-Related and Purchase-Related Transactions Using Perpetual Inventory System

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

Nov. 3.	Purchased merchandise on account from Moonlight Co., list price $88,000, trade discount 20%, terms FOB destination, 2/10, n/30.
4.	Sold merchandise for cash, $38,350. The cost of the goods sold was $22,460.
5.	Purchased merchandise on account from Papoose Creek Co., $43,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $860 added to the invoice.
6.	Returned $13,600 ($17,000 list price less trade discount of 20%) of merchandise purchased on November 3 from Moonlight Co.
8.	Sold merchandise on account to Quinn Co., $15,990 with terms n/15. The cost of the merchandise sold was $9,250.
13.	Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
14.	Sold merchandise on VISA, $244,530. The cost of the goods sold was $143,910.
15.	Paid Papoose Creek Co. on account for purchase of November 5.
23.	Received cash on account from sale of November 8 to Quinn Co.
24.	Sold merchandise on account to Rabel Co., $53,200, terms 1/10, n/30. The cost of the goods sold was $33,820.
28.	Paid VISA service fee of $3,660.
30.	Paid Quinn Co. a cash refund of $6,110 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,450.

Required:

Journalize the transactions.

Nov. 3
Nov. 4-sale
Nov. 4-cost
Nov. 5
Nov. 6
Nov. 8
Nov. 8
Nov. 13
Nov. 14-sale
Nov. 14-cost
Nov. 15
Nov. 23
Nov. 24-sale
Nov. 24-cost
Nov. 28
Nov. 30-refund
Nov. 30-cost

Answer 1

( if assets is debit add up arrow and credit then down arrow)
( if liabilities and equity are credit up arrow if debit then down arrow)
(inventory and accounts receivable is asset
(Accounts payable is liabilities ,,,,,, cost of goods sold , card expense are expense hence decrease equity so down arrow)
( sales is revenue so increase equity so add up arrow under Equity) ( customers refund payable is a liability)
Date	Account titles & Explanations				Debit	Credit	Assets	liabilities	Equity
3-Nov	Merchandise inventory				68992
	Accounts payable-Moonlight co					68992
	(88000*80% =		70400
	(70400*98%=		68992
4-Nov	Cash				38,350
	Sales					38,350
	Cost of goods sold				22,460
	Merchandise inventory					22,460
5-Nov	Merchandise inventory				43490
	Accounts payable-		Papoose Creek			43490
	(43,500*98% +860)
6-Nov	Accounts payable-Moonlight co				13328
	Merchandise inventory					13,328
	(13,600*98%)
8-Nov	Accounts receivable-Quinn co				15,990
	Sales					15,990
	Cost of goods sold				9,250
	Merchandise inventory					9,250
13-Nov	Accounts payable-Moonlight co				55664
	Cash					55664
14-Nov	Cash				244,530
	Sales					244,530
	Cost of goods sold				143,910
	Merchandise inventory					143,910
15-Nov	Accounts payable-		Papoose Creek		43490
	Cash					43490
23-Nov	Cash				15,990
	Accounts receivable-Quinn co					15,990
24-Nov	Accounts receivable-		Rabel Co		52668
	Sales					52668
	Cost of goods sold				33,820
	Merchandise inventory					33,820
28-Nov	Credit card expense				3,660
	Cash					3,660
30-Nov	Customers refund payable				6,110
	Cash					6,110
	Merchandise inventory				3,450
	Estimated returns inventory					3,450