The following selected transactions were completed by Affordable Supplies co., w
ID: 2451900 • Letter: T
Question
The following selected transactions were completed by Affordable Supplies co., which sells supplies primarily to wholesalers and occasionally to retail customers.
Jan 6. Sold merchandise on account, $14,000, terms FOB shipping point, n/eom. The cost of merchandise sold was $8,400. Jan 8. Sold merchandise on account, $20,000, terms FOB destination, 1/10, n/30. The cost of merchandise sold was $14,000.
Jan 16. Sold merchandise on account $19,500, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $11,700.
Jan 18. Recieved check of amount due for sale on jan 8.
Jan 19. Issued credit memorandum for $4,500 for merchandise returned from sale on jan 16. The cost of merchandise returned was $2,700.
Jan 26 Received check for amount due for sale on jan 16 less credit memorandum of jan 19 and discount.
Jan 31 Paid Cashell service $3,000 for merchandise delivered during jan to customers under shipping terms of FOB destination.
Jan 31 received check for amount dur for sale of jan 6.
Illustrate tge effects of each of the preceding transactions on the accounts and financial statements of affordable supplies co. Identify each transaction by date.
Explanation / Answer
Date Accounts and explanations Debit Credit 6-Jan Accounts receivable 14000 sales 14000 cost of merchandise 8400 merchandise inventory 8400 8-Jan Accounts receivable 20000 sales 20000 cost of merchandise 14000 merchandise inventory 14000 16-Jan Accounts receivable 19500 sales 19500 cost of merchandise 11700 merchandise inventory 11700 18-Jan cash 20000 accounts receivable 20000 19-Jan sales returns 4500 account receivable 4500 merchandise inventory 2700 purchase returns 2700 26-Jan cash 14850 discount 150 Accounts receivable 15000 31-Jan service charge 3000 cash 3000 31-Jan cash 14000 accounts receivable 14000