Chart of Account Journal The following were selected from among the transactions
ID: 2403599 • Letter: C
Question
Chart of Account Journal The following were selected from among the transactions completed by Babcock Company during November of the current year Nov merchandise on account from Moonlight Co., list price $89,000, trade discount 30%, terms FOB destination, 2/10, n/30. 4 Sold merchandise for cash, $38,210. The cost of the merchandise sold was $20,810. 5 Purchased merchandise on account from Papoose Creek Co., $51,550, terms FOB shipping point, 2/10, n/30, with prepaid freight of $730 added to the invoice. Returned $14,000 ($20,000 list price less trade discount of 30%) of merchandise purchased on November 3 from Moonlight Co. 8 Sold merchandise on account to Quinn Co. $15,010 with terms n/15. The cost of the merchandise sold was $10,190 13 Paid Moonlight Co on account for purchase of November 3, less return of November 6.Explanation / Answer
Journal entries: Date Accounts Titles Debit $ Credit $ 3-Nov Merchandise Inventory 89000 AP-Moonlight 62300 Trade discount 26700 (being merchandise purchased on credit) 4-Nov Cash 38210 Sales 38210 (being cash sales) COMS 20810 Merchandise Inventory 20810 (being cost of sales booked) 5-Nov Merchandise Inventory 51550 AP- Creek Co. 51550 (Being purchase of merchandise with freight expenses) 6-Nov Trade discount 6000 AP-Moonlight 14000 E Return inventory 20000 (being return of merchandise purchased) 8-Nov AR-Quinn Co. 15010 Sales 15010 COMS 10190 Merchandise Inventory 10190 13-Nov AP-Moonlight 5630 Cash 4504 Cash discount 1126 (56300 *2%=1126) 14-Nov Credit Card sales 231570 Sales 231570 COMS 142060 Merchandise Inventory 142060 15-Nov AP- Creek Co. 51550 Cash 50519 cash discount 1031 (51550-730)*2%=1031 23-Nov Cash 15010 AR - Quinn 15010 24-Nov AR-Rabel Co. 54800 Sales 54800 COMS 33850 Merchandise Inventory 33850 28-Nov Cash 2427990 Credit Cash Expense 3580 Credit Card sales 2431570 30-Nov Sales return 6420 AR - Quinn 6420 Merchandise Inventory 3140 COMS 3140 (being return of sales, COGS reversed and Mercha. Taken back)