The following selected transactions were completed during August between Summit
ID: 3143100 • Letter: T
Question
The following selected transactions were completed during August between Summit Company and Beartooth Co.: Aug. 1 Summit Company sold merchandise on account to Beartooth Co., $49,550, terms FOB destination, 2/15, n/eom. The cost of the merchandise sold was $30,000. 2 Summit Company paid freight of $1,265 for delivery of merchandise sold to Beartooth Co. on August 1. 5 Summit Company sold merchandise on account to Beartooth Co., $59,560, terms FOB shipping point, n/eom. The cost of the merchandise sold was $43,840. 9 Beartooth Co. paid freight of $2,290 on August 5 purchase from Summit Company. 15 Summit Company sold merchandise on account to Beartooth Co., $56,100, terms FOB shipping point, 1/10, n/30. Summit Company paid freight of $1,715, which was added to the invoice. The cost of the merchandise sold was $36,310. 16 Beartooth Co. paid Summit Company for purchase of August 1. 25 Beartooth Co. paid Summit Company on account for purchase of August 15. 31 Beartooth Co. paid Summit Company on account for purchase of August 5. Journalize the August transactions for (1) Summit Company and (2) Beartooth Co. Refer to the Chart of Accounts of the appropriate company for exact wording of account titles. Chart of Accounts-Summit Company CHART OF ACCOUNTS Summit Company General Ledger ASSETS 110 Cash 121 Accounts Receivable-Beartooth Co. 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 210 Accounts Payable 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 221 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 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 Chart of Accounts-Beartooth Co. CHART OF ACCOUNTS Beartooth Co. 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-Summit Company 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 221 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 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 Journal-Summit Company (1) Journalize the August transactions for Summit Company. Refer to the Chart of Accounts of the appropriate company for exact wording of account titles. PAGE 10 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Journal-Beartooth Co. (2) Journalize the August transactions for Beartooth Co. Refer to the Chart of Accounts of the appropriate company for exact wording of account titles. PAGE 15 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Explanation / Answer
CHART OF ACCOUNTS
Summit Company
General Ledger
ASSETS
110
Cash
121
Accounts Receivable-Beartooth Co.
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
210
Accounts Payable
216
Salaries Payable
218
Sales Tax Payable
219
Customer Refunds Payable
221
Notes Payable
EQUITY
310
Common Stock
311
Retained Earnings
312
Dividends
313
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
CHART OF ACCOUNTS
Beartooth Co.
General Ledger
ASSETS
110
Cash
120
Accounts Receivable-Beartooth Co.
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
216
Salaries Payable
218
Sales Tax Payable
219
Customer Refunds Payable
221
Notes Payable
EQUITY
310
Common Stock
311
Retained Earnings
312
Dividends
313
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
Journal the August transactions for Summit Company
PAGE 10
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
August
1
Accounts Receivable—Beartooth Co.
120
$49,550
Sales
410
$49,550
1
Cost of Merchandise Sold
510
$30,000
Merchandise Inventory
130
$30,000
2
Delivery Expense
521
$1,265
Cash
110
$1,265
5
Accounts Receivable—Beartooth Co.
120
$59,560
Sales
410
$59,560
5
Cost of Merchandise Sold
510
$43,840
Merchandise Inventory
130
$43,840
15
Accounts Receivable—Beartooth Co.
120
$56,100
Sales
410
$56,100
15
Accounts Receivable—Beartooth Co.
120
$1,715
Cash
110
$1,715
15
Cost of Merchandise Sold
510
$36,310
Merchandise Inventory
130
$36,310
16
Cash
110
$49,550
Accounts Receivable—Beartooth Co.
120
$49,550
25
Cash
110
$57,815
Accounts Receivable—Beartooth Co.
120
$57,815
31
Cash
110
$59,560
Accounts Receivable—Beartooth Co.
120
$59,560
Journal the August transactions for Beartooth Company
PAGE 15
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
August
1
Merchandise Inventory
130
$49,550
Accounts Payable—Summit Company
210
$49,550
5
Merchandise Inventory
130
$59,560.00
Accounts Payable—Summit Company
210
$59,560.00
9
Merchandise Inventory
130
$2,290
Cash
110
$2,290
15
Merchandise Inventory
130
$57,815
Accounts Payable—Summit Company
210
$57,815
16
Accounts Payable—Summit Company
210
$49,550
Cash
110
$49,550
25
Accounts Payable—Summit Company
210
$57,815
Cash
110
$57,815
31
Accounts Payable—Summit Company
210
$59,560.00
Cash
110
$59,560.00
CHART OF ACCOUNTS
Summit Company
General Ledger
ASSETS
110
Cash
121
Accounts Receivable-Beartooth Co.
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
210
Accounts Payable
216
Salaries Payable
218
Sales Tax Payable
219
Customer Refunds Payable
221
Notes Payable
EQUITY
310
Common Stock
311
Retained Earnings
312
Dividends
313
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