The following selected transactions were completed by Capers Company during Octo
ID: 2543830 • Letter: T
Question
The following selected transactions were completed by Capers Company during October of the current year:
Oct.
1
Purchased merchandise from UK Imports Co., $14,448, terms FOB destination, n/30.
3
Purchased merchandise from Hoagie Co., $9,950, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $220 was added to the invoice.
4
Purchased merchandise from Taco Co., $13,650, terms FOB destination, 2/10, n/30.
6
Issued debit memo to Taco Co. for $4,550 of merchandise returned from purchase on October 4.
13
Paid Hoagie Co. for invoice of October 3.
14
Paid Taco Co. for invoice of October 4, less debit memo of October 6.
19
Purchased merchandise from Veggie Co., $27,300, terms FOB shipping point, n/eom.
19
Paid freight of $400 on October 19 purchase from Veggie Co.
20
Purchased merchandise from Caesar Salad Co., $22,000, terms FOB destination, 1/10, n/30.
30
Paid Caesar Salad Co. for invoice of October 20.
31
Paid UK Imports Co. for invoice of October 1.
31
Paid Veggie Co. for invoice of October 19.
Journalize the entries to record the transactions of Capers Company for October. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Capers Company
General Ledger
ASSETS
110
Cash
120
Accounts Receivable
125
Notes Receivable
130
Merchandise Inventory
131
Estimated Returns Inventory
140
Office Supplies
141
Store Supplies
142
Prepaid Insurance
180
Land
192
Store Equipment
193
Accumulated Depreciation-Store Equipment
194
Office Equipment
195
Accumulated Depreciation-Office Equipment
LIABILITIES
211
Accounts Payable-Caesar Salad Co.
212
Accounts Payable-Hoagie Co.
213
Accounts Payable-Taco Co.
214
Accounts Payable-UK Imports Co.
215
Accounts Payable-Veggie Co.
216
Salaries Payable
218
Sales Tax Payable
219
Customers Refunds Payable
221
Notes Payable
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
521
Delivery Expense
522
Advertising Expense
524
Depreciation Expense-Store Equipment
525
Depreciation Expense-Office Equipment
526
Salaries Expense
531
Rent Expense
533
Insurance Expense
534
Store Supplies Expense
535
Office Supplies Expense
536
Credit Card Expense
539
Miscellaneous Expense
710
Interest Expense
Oct.
1
Purchased merchandise from UK Imports Co., $14,448, terms FOB destination, n/30.
3
Purchased merchandise from Hoagie Co., $9,950, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $220 was added to the invoice.
4
Purchased merchandise from Taco Co., $13,650, terms FOB destination, 2/10, n/30.
6
Issued debit memo to Taco Co. for $4,550 of merchandise returned from purchase on October 4.
13
Paid Hoagie Co. for invoice of October 3.
14
Paid Taco Co. for invoice of October 4, less debit memo of October 6.
19
Purchased merchandise from Veggie Co., $27,300, terms FOB shipping point, n/eom.
19
Paid freight of $400 on October 19 purchase from Veggie Co.
20
Purchased merchandise from Caesar Salad Co., $22,000, terms FOB destination, 1/10, n/30.
30
Paid Caesar Salad Co. for invoice of October 20.
31
Paid UK Imports Co. for invoice of October 1.
31
Paid Veggie Co. for invoice of October 19.
Explanation / Answer
Solution:
Journal Entries - Capers Company Date Particulars Debit Credit 1-Oct Merchandise Inventory Dr $14,448.00 To Accounts Payable-UK Imports Co. $14,448.00 (Being goods purchased on FOB destination terms) 3-Oct Merchandise Inventory Dr $10,170.00 To Accounts Payable-Hoagie Co $10,170.00 (Being goods purchased on FOB shipping point, terms 2/10, n/eom) 4-Oct Merchandise Inventory Dr $13,650.00 To Accounts Payable-Taco Co. $13,650.00 (Being goods purchased on FOB destination terms 2/10, n/30) 6-Oct Accounts Payable-Taco Co. Dr $4,550.00 To Merchandise Inventory $4,550.00 (Being goods returned and debit to creditor) 13-Oct Accounts Payable-Hoagie Co Dr $10,170.00 To Estimated Returns Inventory $199.00 To Cash ($9,950*98% + $220) $9,971.00 (Being payment made and discount accounted for) 14-Oct Accounts Payable-Taco Co. Dr $9,100.00 To Estimated Returns Inventory $182.00 To Cash [($13,650-4550)*98%] $8,918.00 (Being payment made and discount account for) 19-Oct Merchandise Inventory Dr $27,300.00 To Accounts Payable-Veggie Co $27,300.00 (Being goods purchased on FOB shipping point, terms n/eom) 19-Oct Merchandise Inventory Dr $400.00 To Cash $400.00 (Being frieght paid on veggie co purchase) 20-Oct Merchandise Inventory Dr $22,000.00 To Accounts Payable-Caesar Salad Co $22,000.00 (Being goods purchased on FOB destination terms, 1/10, n/30) 30-Dec Accounts Payable-Caesar Salad Co Dr $22,000.00 To Estimated Returns Inventory $220.00 To Cash ($22,000*99%) $21,780.00 (Being payment made and discount account for) 31-Dec Accounts Payable-UK Imports Co. Dr $14,448.00 To Cash $14,448.00 (Being payment made) 31-Dec Accounts Payable-Veggie Co Dr $27,300.00 To Cash $27,300.00 (Being payment made)