The following selected transactions were completed by Air Systems Company during
ID: 2559267 • Letter: T
Question
The following selected transactions were completed by Air Systems Company during January of the current year. Air Systems Company uses the periodic inventory system.
Jan.
2
Purchased $18,200 of merchandise on account, FOB shipping point, terms 2/15, n/30.
5
Paid freight of $190 on the January 2 purchase.
6
Returned $2,750 of the merchandise purchased on January 2.
13
Sold merchandise on account, $37,300, FOB destination, 1/10, n/30. The cost of goods sold was $22,400.
15
Paid freight of $215 for the merchandise sold on January 13.
17
Paid for the purchase of January 2 less the return and discount.
23
Received payment on account for the sale of January 13 less the discount.
Journalize the entries to record the transactions of Air Systems Company. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
Air Systems Company
General Ledger
ASSETS
110
Cash
120
Accounts Receivable
125
Notes Receivable
130
Merchandise 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
210
Accounts Payable
216
Salaries Payable
218
Sales Tax Payable
219
Customer Refunds Payable
220
Unearned Rent
221
Notes Payable
EQUITY
310
Common Stock
311
Retained Earnings
312
Dividends
313
Income Summary
REVENUE
410
Sales
610
Rent Revenue
EXPENSES
510
Purchases
511
Purchases Returns and Allowances
512
Purchases Discounts
513
Freight In
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
Journalize the entries to record the transactions of Air Systems Company. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Jan.
2
Purchased $18,200 of merchandise on account, FOB shipping point, terms 2/15, n/30.
5
Paid freight of $190 on the January 2 purchase.
6
Returned $2,750 of the merchandise purchased on January 2.
13
Sold merchandise on account, $37,300, FOB destination, 1/10, n/30. The cost of goods sold was $22,400.
15
Paid freight of $215 for the merchandise sold on January 13.
17
Paid for the purchase of January 2 less the return and discount.
23
Received payment on account for the sale of January 13 less the discount.
Explanation / Answer
1)
Date Account Debit credit jan 2 Purchase 18200 Accounts payable 18200 jan5 Freight In 190 cash 190 Jan 6 Accounts payable 2750 Purchases Returns and Allowances 2750 Jan 13 Accounts receivable 37300 Sales 37300 Jan 15 Delivery Expense 215 cash 215 Jan 17 Accounts payable [18200-2750] 15450 Purchases Discounts [15250*.02] 309 cash 15141 jan 23 cash 36927 sales Discount [37300*.01] 373 Accounts receivable 37300