Question

Please Journalize all Transactions. They have a perpetual Inventory System and all Sales on account are subject to 2/10 (Discounts are taken and granted only when terms are met). Cost of Goods sold is 80% of the sale.

Dec
3	Received a check from Swanson Brothers Construction in full payment of invoice dated November 26. The invoice amount was $24,050.
3	Sold sewer and drainage pipe to Beverly’s Building Products on account for $13,150.
3	Purchased copper tubing and fittings from Edward’s Plumbing Supplies Inc. on account for $24,320, terms n/60.
3	Issued check for $26,400 to Oxenford Copperworks in settlement of the balance owed on account, no discount taken.
3	Issued check for $810 to Standard Oil Co. in payment of gas, oil, and truck repair.
6	Sold cast pipe to Trudy's Plumbing on account for $29,300
6	Received a check in the amount of $27,800 form Coconino Contractors, Inc. in full payment of invoice dated October 20
6	Purchased bathroom fixtures from Phoenix Plastics, on account for $52,700, terms 1/10, n/30
12	Received a check from Trudy's Plumbing in payment of invoice from December 6.
13	Issued check for $399 in payment of November telephone bill
14	Issued check to Phoenix Plastics, Inc in payment of invoice from December 6
20	Purchased supplies in the amount of $1,360. (Note: Debit the asset account)
24	A half-acre parcel of land adjacent to the building is acquired in exchange for 600 share of common stock. The land has a fair value of $54,000 and will be used immediately.
26	Board of directors declared a total dividend of $8,740 payable on January 14 to stockholders of record on December 26
27	An invoice in the amount of $2,650 is received from a lawyer for legal services involved in the acquisition of the land purchased on Dec. 24
31	Sold a piece of equipment for $2,500 cash. The original cost was $7,000, a life of 10 years, and accumulated depreciation recorded through 12/31/17 of $4,550. The straight-line method is used. (Note: the company follows the practice of recording a half year's depreciation in the year of acquisition and a half year in the year of disposal.) First, bring the depreciation expense up to date, then record the sale
31	Cash sales for December totaled $52,272

Answer 1

	Journal entries:
	Date	Account titles and explanation						Debit	Credit
	Dec 3.	Cash						23569
		Sales returns and allowances						481
		Accounts receivable-Swanson							24050
		(Note:1)
		(Received a check from Swanson Brothers Construction)
	Dec 3.	Accounts receivable-Beverly's						13150
		Sales							13150
		(Sold sewer and drainage pipe to Beverly’s Building Products)
		Cost of goods sold		(13150*80%)				10520
		Inventory							10520
		(Cost of goods sold recorded)
	Dec 3.	Inventory						24320
		Accounts payable-Edward's							24320
		(Purchased copper tubing and fittings from Edward’s Plumbing Supplies Inc)
	Dec 3.	Accounts payable-Oxenford						26400
		Cash							26400
		(Issued check to Oxenford Copperworks)
	Dec 3.	Utilities expense						810
		Cash							810
		(Issued check in payment of gas, oil, and truck repair)
	Dec 6.	Accounts receivable-Trudy's						29300
		Sales							29300
		(Sold cast pipe to Trudy's Plumbing)
		Cost of goods sold			(29300*80%)			23440
		Inventory							23440
		(Cost of goods sold recorded)
	Dec 6.	Cash						27800
		Accounts receivable-Coconino							27800
		(Received a check form Coconino Contractors)
		(Note:2)
	Dec 6.	Inventory						52700
		Accounts payable-Phoenix							52700
		(Purchased bathroom fixtures from Phoenix Plastics)
	Dec 12.	Cash						28714
		Sales returns and allowances			(29300*2%)			586
		Accounts receivable-Swanson							29300
		(Received a check from Trudy's Plumbing)
	Dec 13.	Telephone expense						399
		Cash							399
		(Issued check in payment of November telephone bill)
	Dec 14.	Accounts payable-Phoenix						52700
		Inventory							527
		Cash							52173
		(Note:3)
		(Issued check to Phoenix Plastics)
	Dec 20.	Supplies						1360
		Cash							1360
		(Purchased supplies )
	Dec 24.	Land						54000
		Common stock							54000
		(A half-acre parcel of land is acquired in exchange for 600 share of common stock)
	Dec 26.	Dividends						8740
		Dividend payable							8740
		(Board of directors declared a total dividend of $8,740)
	Dec 27.	Land						2650
		Accounts payable-Lawyer							2650
		(Legal services in the acquisition of land capitalized)
	Dec 31.	Depreciation expense				(7000/10)*1/2		350
		Accumulated depreciation-Equipment							350
		(Recorded half-year depreciation)
		Cash						2500
		Accumulated depreciation-Equipment				(4550+350)		4900
		Gain on sale of equipment				(2500+4900-7000)			400
		Equipment							7000
		(Sold a piece of equipment)
	Dec 31.	Cash						52272
		Sales							52272
		(Cash sales for December)
		Cost of goods sold				(52272*80%)		41818
		Inventory							41818
		(Cost of goods sold recorded)
	Notes:
	1. 2/10 means 2% discount when paid within 10 days
	Here, invoice date is Nov 26 and paid on Dec 3.Hence,eligible for discount
	Discount=24050*2%=$481
	2. 2/10 means 2% discount when paid within 10 days
	Here, invoice date is Oct 20 and paid on Dec 6.Hence, not eligible for discount.
	3.Purchase terms are 1/10 which means that 1% discount when paid within 10 days
	Here, invoice date is Dec 6 and paid on Dec 14.Hence,eligible for discount
	Discount=52700*1%=$ 527