Question

Solve the follwing problem. CHART OF ACCOUNTSBeartooth Co.General Ledger ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 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-Summit Company 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 221 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods 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 CHART OF ACCOUNTS
Summit Company
General Ledger
ASSETS 110 Cash 121 Accounts Receivable-Beartooth Co. 125 Notes Receivable 130 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 210 Accounts Payable 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 221 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods 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

The following selected transactions were completed during August between Summit Company and Beartooth Co.:

Aug.	1	Summit Company sold merchandise on account to Beartooth Co., $48,000, terms FOB destination, 2/15, n/eom. The cost of the goods sold was $28,800.
	2	Summit Company paid freight of $1,150 for delivery of merchandise sold to Beartooth Co. on August 1.
	5	Summit Company sold merchandise on account to Beartooth Co., $66,000, terms FOB shipping point, n/eom. The cost of the goods sold was $40,000.
	9	Beartooth Co. paid freight of $2,300 on August 5 purchase from Summit Company.
	15	Summit Company sold merchandise on account to Beartooth Co., $58,700, terms FOB shipping point, 1/10, n/30. Summit Company paid freight of $1,675, which was added to the invoice. The cost of the goods sold was $35,000.
	16	Beartooth Co. paid Summit Company for purchase of August 1.
	25	Beartooth Co. paid Summit Company on account for purchase of August 15.
	31	Beartooth Co. paid Summit Company on account for purchase of August 5.

Journalize the August transactions for (1) Summit Company and (2) Beartooth Co. Refer to the Chart of Accounts of the appropriate company for exact wording of account titles.

Answer 1

	Summit company
Aug-01	Accounts receivable -Beartooth co.	48000
	Sales revenue		48000
	Cost of goods sold	28800
	Inventory		28800
Aug-02	Delivery expense	1150
	Cash		1150
Aug-05	Accounts receivable -Beartooth co.	66000
	Sales revenue		66000
	Cost of goods sold	40000
	Inventory		40000
Aug-15	Accounts receivable -Beartooth co.	58700
	Sales revenue		58700
	Cost of goods sold	35000
	Inventory		35000
	Accounts receivable -Beartooth co.	1675
	Cash		1675
Aug-16	Cash	47040
	Sales discount (48000*.02)	960
	Accounts receivable - beartooth co.		48000
Aug-25	Cash	59788
	Sales discount (58700*.01)	587
	Accounts receivable - beartooth co.		60375
Aug-31	Cash	66000
	Accounts receivable - beartooth co.		66000

Beartooth co.
Aug-01	Inventory	48000
	Accounts payable Summit co.		48000
Aug-05	Inventory	66000
	Accounts payable Summit co.		66000
Aug-09	Inventory	2300
	Cash		2300
Aug-15	Inventory	60375
	Accounts payable Summit co.		60375
Aug-16	Accounts payable summit	48000
	Inventory		960
	Cash		47040
Aug-25	Accounts payable summit	60375
	Inventory		587
	Cash		59788
Aug-31	Accounts payable summit	66000
	Cash		66000