Concept explainers
(a)
Introduction: Journalizing is the first step in accounting. All the routine transactions of a company are recorded in the journal. Each transaction is recorded separately into the journal. Under the perpetual inventory system, the accounting records are updated after every purchase or sale of inventory, unlike the periodic system where the records are updated at the end of the month. Under the net method, the transactions are recorded at discounted amounts.
To prepare: The
(b)
Introduction: Journalizing is the first step in accounting. All the routine transactions of a company are recorded in the journal. Each transaction is recorded separately into the journal. Under the perpetual inventory system, the accounting records are updated after every purchase or sale of inventory, unlike the periodic system where the records are updated at the end of the month. Under the net method, the transactions are recorded at discounted amounts.
To prepare: The journal entries that seller records under perpetual inventory system at gross amount.
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FINANCIAL ACCT.FUND.(LOOSELEAF)
- A customer returns $690 worth of merchandise and receives a full refund. What accounts recognize this sales return, assuming the customer has not yet remitted payment to the retailer? A. accounts receivable, sales returns and allowances B. accounts receivable, cash C. sales returns and allowances, purchases D. sales discounts, cost of goods soldarrow_forwardA customer returns $870 worth of merchandise and receives a full refund. What accounts recognize this sales return (disregarding the merchandise condition entry) if the return occurs before the customer remits payment to the retailer? A. accounts receivable, sales returns and allowances B. accounts receivable, cash C. sales returns and allowances, merchandise inventory D. accounts receivable, cost of goods soldarrow_forwardRecord the following transactions for a perpetual inventory system in general journal form. a. Sold merchandise on account to Southridge Manufacturing, Inc., invoice no. 6910, 1,815.24. The cost of merchandise was 1,320. b. Issued credit memorandum no. 56 to Southridge Manufacturing, Inc., for merchandise returned, 622. The cost of the merchandise was 485. c. Bought merchandise on account from Michals Inc., invoice no. 1685, 850; terms 1/10, n/30; dated April 14; FOB Dallas, freight prepaid and added to the invoice, 65.00 (total 915). d. Received credit memorandum no. 219 from Michals Inc. for merchandise returned, 210.arrow_forward
- JOURNALIZING PURCHASES RETURNS AND ALLOWANCES AND POSTING TO GENERAL LEDGER AND ACCOUNTS PAYABLE LEDGER Using page 3 of a general journal and the following general ledger accounts and accounts payable ledger accounts, journalize and post the following transactions: Mar. 5Returned merchandise to Tower Industries, 500. 11Returned merchandise to A D Arms, 625. 23Returned merchandise to Mighty Mansion, 275.arrow_forwardPrepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is sold on account for 300 plus 3% sales tax, with 2/10, n/30 cash discount terms. (b) Part of the merchandise sold in transaction (a) for 70 plus sales tax is returned for credit. (c) The balance on account for the merchandise sold in transaction (a) is paid in cash within the discount period.arrow_forwardA retailer returns $400 worth of inventory to a manufacturer and receives a full refund. What accounts recognize this return before the retailer remits payment to the manufacturer? A. accounts payable, merchandise inventory B. accounts payable, cash C. cash, merchandise inventory D. merchandise inventory, cost of goods soldarrow_forward
- Preston Company sells candy wholesale, primarily to vending machine operators. Terms of sales on account are 2/10, n/30, FOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year: Required 1. Journalize the transactions for May in the cash receipts journal and the sales journal. Assume the periodic inventory method is used. 2. If you are using Working Papers, total and rule the journals and prove the equality of the debit and credit totals.arrow_forwardJOURNAL ENTRIES UNDER THE PERPETUAL INVENTORY SYSTEM Sunita Computer Supplies entered into the following transactions. Prepare journal entries under the perpetual inventory system. May 1 Purchased merchandise on account from Anju Enterprises, 200,000. 8 Purchased merchandise for cash, 100,000. 15 Sold merchandise on account to Salils Pharmacy for 8,000. The merchandise cost 5,000.arrow_forwardC. R. McIntyre Company sells candy wholesale, primarily to vending machine operators. Terms of sales on account are 2/10, n/30, FOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year: Required 1. Journalize the transactions for May in the cash receipts journal and the sales journal. Assume the periodic inventory method is used. 2. Total and rule the journals. 3. Prove the equality of the debit and credit totals.arrow_forward
- Preston Company sells candy wholesale, primarily to vending machine operators. Terms of sales on account are 2/10, n/30, FOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year: Required 1. Journalize the transactions for May in the cash receipts journal and the sales journal. Assume the periodic inventory method is used. 2. Total and rule the journals. 3. Prove the equality of the debit and credit totals.arrow_forwardPURCHASES TRANSACTIONSGROS-PRICE AND NET-PRICE METHODS Romeros Heating and Cooling had the following transactions during April: Apr. 2Purchased merchandise on account from Alanon Valve for 1,000, terms 2/10, n/30. 5Purchased merchandise on account from Leons Garage for 1,400, terms 1/10, n/30. 11Paid the amount due to Alanon Valve for the purchase on April 2. 25Paid the amount due to Leons Garage for the purchase on April 5. 1. Prepare general journal entries for these transactions using the gross-price method. 2. Prepare general journal entries for these transactions using the net-price method.arrow_forwardPurchase-related transactions Based on the data presented in Exercise 5-16, journalize Balboa Co.s entries for (A) the purchase, (B) the return of the merchandise for credit, and (C) the payment of the invoice.arrow_forward
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