Renner Hardware Store completed the following merchandising transactions in the
ID: 2393693 • Letter: R
Question
Renner Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Renner showed Cash of $4,610 and Owner’s Capital of $4,610.
Renner Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 Owner’s Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.
Journalize the transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
May 1 Purchased merchandise on account from Braun's Wholesale Supply $4,200, terms 2/10, n/30. 2 Sold merchandise on account $2,100, terms 2/10, n/30. The cost of the merchandise sold was $1,250. 5 Received credit from Braun's Wholesale Supply for merchandise returned $400. 9 Received collections in full, less discounts, from customers billed on sales of $2,100 on May 2. 10 Paid Braun's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $380. 12 Purchased merchandise for cash $1,500. 15 Received refund for poor quality merchandise from supplier on cash purchase $150. 17 Purchased merchandise from Valley Distributors $1,300, FOB shipping point, terms 2/10, n/30. 19 Paid freight on May 17 purchase $160. 24 Sold merchandise for cash $3,420. The merchandise sold had a cost of $2,210. 25 Purchased merchandise from Lumley, Inc. $580, FOB destination, terms 2/10, n/30. 27 Paid Valley Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $40. 31 Sold merchandise on account $1,480, terms n/30. The cost of the merchandise sold was $580.Explanation / Answer
Date General Journal Debit Credit 01-May Merchandise inventory 8,500 Accounts payable 8,500 02-May Accounts receivable 2,100 Sales 2,100 02-May Cost of goods sold 1,250 Merchandise inventory 1,250 05-May Accounts payable 400 Merchandise inventory 400 09-May Cash 2,058 Sales Discounts 42 Accounts Receivable 2,100 10-May Accounts payable 4,200 Cash 4,124 Merchandise inventory (4200-400)*2% 76 11-May Supplies 380 Cash 380 12-May Merchandise Inventory 1,500 Cash 1,500 15-May Cash 150 Merchandise Inventory 150 17-May Merchandise inventory 1,300 Accounts payable 1,300 19-May Merchandise inventory 160 Cash 160 24-May Cash 3,420 Sales 3,420 24-May Cost of Goods Sold 2,210 Merchandise inventory 2,210 25-May Merchandise Inventory 580 Accounts payable 580 27-May Accounts payable 1,300 Cash 1,274 Merchandise Inventory 26 29-May Sales Returns and Allowances 70 Cash 70 29-May Merchandise Inventory 40 Cost of Goods Sold 40 31-May Accounts Receivable 1,480 Sales 1,480 31-May Cost of goods sold 580 Merchandise Inventory 580