Question

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 $93,000, trade discount 30%, terms FOB destination, 2/10, n/30. 4 Sold merchandise for cash, $35,370. The cost of the merchandise sold was $23,670. 5 Purchased merchandise on account from Papoose Creek Co., $44,400, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice. 6 Returned $13,300 ($19,000 list price less trade discount of 30%) of merchandise purchased on November 3 from Moonlight Co. 8 Sold merchandise on account to Quinn Co., $17,080 with terms n/15. The cost of the merchandise sold was $10,010. 13 Paid Moonlight Co. on account for purchase of November 3, less return of November 6. 14 Sold merchandise on VISA, $246,980. The cost of the merchandise sold was $152,530. 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., $52,400, terms 1/10, n/30. The cost of the merchandise sold was $31,410. 28 Paid VISA service fee of $3,220. 30 Paid Quinn Co. a cash refund of $6,020 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,390. Required: Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

In the books of Babcock Company:
Date	Account Titles	Debit	Credit
		$	$
Nov-03	Merchandise Inventory	65,100
	Accounts Payable : Moonlight Co. ( $ 93,000 x 70%)		65,100
Nov-04	Cash	35,370
	Sales		35,370
Nov-04	Cost of Goods Sold	23,670
	Merchandise Inventory		23,670
Nov-05	Merchandise Inventory	45,210
	Accounts Payable: Papoose Creek Co. $ ( 44,400 + 810)		45,210
Nov-06	Accounts Payable: Moonlight Co.	13,300
	Merchandise Inventory		13,300
Nov-08	Accounts Receivable : Quinn Co.	17,080
	Sales		17,080
Nov-08	Cost of Goods Sold	10,010
	Merchandise Inventory		10,010
Nov-13	Accounts Payable : Moonlight Co. $ ( 65,100 - 13,300)	51,800
	Cash		50,764
	Merchandise Inventory $ ( 51,800 x 2%)		1,036
Nov-14	Cash	2,46,980
	Sales		2,46,980
Nov-14	Cost of Goods Sold	1,52,530
	Merchandise Inventory		1,52,530
Nov-15	Accounts Payable: Papoose Creek Co.	45,210
	Cash		44,322
	Merchandise Inventory $ ( 44,400x 2%)		888
Nov-23	Cash	17,080
	Accounts Receivable: Quinn Co.		17,080
Nov-24	Accounts Receivable : Rebel Co.	52,400
	Sales		52,400
Nov-24	Cost of Goods Sold	31,410
	Merchandise Inventory		31,410
Nov-28	Credit Card Expense	3,220
	Cash		3,220
Nov-30	Sales Returns and Allowances	6,020
	Cash		6,020
Nov-30	Merchandise Inventory	3,390
	Cost of Goods sold		3,390