Received customer purchase order No. 37225 (Doc. No. 4) in the mail from Univers

Question

Received customer purchase order No. 37225 (Doc. No. 4) in the mail from University of Southern lowa (USI), approved their credit and shipped the goods. All goods ordered were shipped, except that only 56 shoulder pad sets were available for shipment. 19 Carrier & number: Allied Trucking; Carrier number 2154 Freight charges: FOB shipping point; Billed to buyer (i.e., paid by USI) Route: Truck & driver: Freight rate: Shipment: Express Truck 2961XZ, John Arens $19.00 per 100 lbs. 3 cartons/goal and rim sets @ 40 lbs./carton 5 cartons/backboards 150 lbs./carton 7 cartons/shoulder pad sets 25 lbs./carton 10 cartons/football helmets @ 16 lbs./carton . See flowchart, pages 18 and 19; follow all steps carefully. . You will use several documents and record an entry in the sales journal and accounts receivable subsidiary ledger for this transaction. For guidance in preparing the bill of lading, see pages 35-36 of the Reference book.

Explanation / Answer

Date

Account titles and explanations

Debit ($' million)

Credit ($' million)

For sales

Accounts receivable

XXX

Sales

XXX

(Being sales made)

However, since no amounts as per the rate on which the sales have been is provided hence, no amount has been calculated

For freight

Freight outward (Note 1)

           266.00

Cash

           266.00

(Being freight paid on sales)

Profit and loss account

           266.00

Freight outward

           266.00

(Being the freight charged against profit and loss account)

Note 1:

Particulars

Weight (Lbs.)

Amount ($)

Amount ($)

3 cartoons rim sets @40 lbs. per cartoon

     120.00

        (19 x 2)= 38.00

5 cartoons @150 lbs. per cartoon

     750.00

     (19 x 8)= 152.00

7 cartoons @25 lbs. per cartoon

     175.00

        (19 x 2)= 38.00

10 cartoons @16 lbs. per cartoon

     160.00

        (19 x 2)= 38.00

Total amount of freight

     266.00

Date

Account titles and explanations

Debit ($' million)

Credit ($' million)

For sales

Accounts receivable

XXX

Sales

XXX

(Being sales made)

However, since no amounts as per the rate on which the sales have been is provided hence, no amount has been calculated

For freight

Freight outward (Note 1)

           266.00

Cash

           266.00

(Being freight paid on sales)

Profit and loss account

           266.00

Freight outward

           266.00

(Being the freight charged against profit and loss account)

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