Question

In: Accounting

On March 1, Sather Co. sold merchandise to Boone Co. on account, $29,800, terms 2/15, n/30....

On March 1, Sather Co. sold merchandise to Boone Co. on account, $29,800, terms 2/15, n/30. The cost of the merchandise sold is $18,300. The merchandise was paid for on March 14.

Journalize the entries for Sather Co. and Boone Co. for the sale, purchase, and payment of amount due. Refer to the appropriate company’s Chart of Accounts for exact wording of account titles.

Chart of Accounts-Sather Co.

CHART OF ACCOUNTS
Sather Co.
General Ledger
  ASSETS
110 Cash
121 Accounts Receivable-Boone Co.
125 Notes Receivable
130 Merchandise 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
218 Sales Tax Payable
219 Customers Refunds Payable
220 Unearned Rent
221 Notes Payable
  EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
  REVENUE
410 Sales
610 Rent Revenue
  EXPENSES
501 Cost of Merchandise Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
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-Boone Co.

CHART OF ACCOUNTS
Boone Co.
General Ledger
  ASSETS
110 Cash
120 Accounts Receivable
125 Notes Receivable
130 Merchandise 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-Sather Co.
218 Sales Tax Payable
219 Customers Refunds Payable
220 Unearned Rent
221 Notes Payable
  EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
  REVENUE
410 Sales
610 Rent Revenue
  EXPENSES
501 Cost of Merchandise Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710 Interest Expense

Journal-Sather Co.

Journalize the entries for Sather Co. for the sale on March 1 and payment of the amount due on March 14. Refer to the appropriate company’s Chart of Accounts for exact wording of account titles.

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JOURNAL

  DATE DESCRIPTION POST. REF. DEBIT CREDIT

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Journal-Boone Co.

Journalize the entries for Boone Co. for the purchase on March 1 and payment of the amount due on March 14. Refer to the appropriate company’s Chart of Accounts for exact wording of account titles.

PAGE 20

JOURNAL

  DATE DESCRIPTION POST. REF. DEBIT CREDIT

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Solutions

Expert Solution

Books of Sather Co.
Date Description Debit Credit
1-Mar Accounts Receivable - Boone Co. 29800
                          Sales 29800
Goods sold to Boone Co. on account
1-Mar Cost of Merchandise Sold 18300
                  Merchandise Inventory 18300
Transfer of cost to Cost of Merchandise sold
14-Mar Cash 29204
Sales Discount 596
           Accounts Receivable - Boone Co. 29800
Payment terms were 2/15 that is if paid in15 days discount of 2 % will be allowed
Sales discount is used in this case but it is not mentioned in charts of account
Books of Boone Co.
              
1-Mar Merchandise Inventory 29800
            Accounts Payable - Sather Co. 29800
Merchandise Inventory purchased on account
14-Mar Accounts Payable - Sather Co. 29800
                Merchandise Inventory 596
                 Cash 29204
Cash Paid to Sather after adjusting for discount on purchase
being payment made within time allowed for discount

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