APPLYING THE CONCEPTS: Purchases and sales in action This is a list of purchases
ID: 2468620 • Letter: A
Question
APPLYING THE CONCEPTS: Purchases and sales in action
This is a list of purchases and sales transactions that occurred in the month of November. Correctly journalize these transactions below. Use Smart Entry when dropdowns are not available. For compound entries, if amount box does not require an entry, leave it blank. If required, round to the nearest cent.
+ Assets
- Liabilities
+ Equity
+ Revenues/Gains
+ Expenses/Losses
GENERAL JOURNAL
Nov. 1
Nov. 2
Nov. 6
Nov. 8 Record sale
Nov. 8 Record cost
Nov. 10
Nov. 15 Record sales return
Nov. 15 Record goods returned
Nov. 16
Nov. 17
APPLYING THE CONCEPTS: Purchases and sales in action
See an illustrated example.This is a list of purchases and sales transactions that occurred in the month of November. Correctly journalize these transactions below. Use Smart Entry when dropdowns are not available. For compound entries, if amount box does not require an entry, leave it blank. If required, round to the nearest cent.
November 1 Purchased inventory with credit terms 2/10, n/30, $3,700. November 2 Paid transportation costs, FOB shipping point, $100. November 6 Returned part of inventory purchased on 11/1 for a credit, $740. November 8 Sold inventory on credit, terms 2/10, n/30, $3,600; cost of inventory $2,160; transportation costs FOB shipping point at a cost of $100, paid by the buyer. November 10 Paid one half of the amount due for the purchase on 11/1. November 15 Accepted return of part of inventory sold on 11/8 for credit, $720; cost of the inventory, $432. November 16 Paid the remaining balance of the amount due for the purchase on 11/1. November 17 Collected in full for the sale on 11/8. Not sure about the account title? Click here to view the chart of accounts.+ Assets
- Liabilities
Accounts Payable Sales Tax Payable State Income Tax Payable Notes Payable Estimated Warranty Liability Social Security Tax Payable Interest Payable Bonds Payable Medicare Tax Payable Salaries Payable Income Tax Payable Federal Unemployment Tax Payable Utilities Payable Unearned Revenue State Unemployment Tax Payable Dividends Payable Federal Income Tax Payable+ Equity
+ Revenues/Gains
+ Expenses/Losses
GENERAL JOURNAL
pageDATE DESCRIPTION DOC.
NO. POST.
REF. DEBIT CREDIT 1
Nov. 1
1 2
2 3
3 4
Nov. 2
4 5
5 6
6 7
Nov. 6
7 8
8 9
9 10
Nov. 8 Record sale
10 11
11 12
12 13
Nov. 8 Record cost
13 14
14 15
15 16
Nov. 10
16 17
17 18
18 19
19 20
Nov. 15 Record sales return
20 21
21 22
22 23
Nov. 15 Record goods returned
23 24
24 25
25 26
Nov. 16
26 27
27 28
28 29
Nov. 17
29 30
30 31
31 32
32
Explanation / Answer
Journal Entries
Date
Description
Debit
Credit
Nov 1
Merchandise inventory
$3,700
To Accounts payable
$3,700
Nov 2
Merchandise inventory
$100
To Cash
$100
Nov 6
Accounts payable
$740
To Merchandise inventory
$740
Nov 8
Account receivable
$3,600
To Sales
$3,600
Cost of goods sold
$2,160
To Merchandise inventory
$2,160
Nov 10
Accounts payable(3700-740)/2
1,480
To Merchandise inventory 1480@2%
29.60
To Cash
1,450.40
Nov 15
Sales return and allowances
720
To Accounts receivable
720
Merchandise inventory
$432
To Cost of goods sold
$432
Nov 16
Accounts payable
$1,480
To Cash
$1,480
Nov 17
Account receivable
(3600 – 720)
$2,880
Sales discount
(2,880 @ 2%)
$57.60
To Cash
$2822.40
Date
Description
Debit
Credit
Nov 1
Merchandise inventory
$3,700
To Accounts payable
$3,700
Nov 2
Merchandise inventory
$100
To Cash
$100
Nov 6
Accounts payable
$740
To Merchandise inventory
$740
Nov 8
Account receivable
$3,600
To Sales
$3,600
Cost of goods sold
$2,160
To Merchandise inventory
$2,160
Nov 10
Accounts payable(3700-740)/2
1,480
To Merchandise inventory 1480@2%
29.60
To Cash
1,450.40
Nov 15
Sales return and allowances
720
To Accounts receivable
720
Merchandise inventory
$432
To Cost of goods sold
$432
Nov 16
Accounts payable
$1,480
To Cash
$1,480
Nov 17
Account receivable
(3600 – 720)
$2,880
Sales discount
(2,880 @ 2%)
$57.60
To Cash
$2822.40