FULL QUESTION PLEASE HELP ! Renner Hardware Store completed the following mercha
ID: 2393736 • Letter: F
Question
FULL QUESTION PLEASE HELP !
Renner Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Renner showed Cash of $5,500 and Owner’s Capital of $5,500.
Renner Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 Owner’s Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.
A.)
Journalize the transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
May 1 Purchased merchandise on account from Braun's Wholesale Supply $3,900, terms 2/10, n/30. 2 Sold merchandise on account $2,300, terms 2/10, n/30. The cost of the merchandise sold was $1,290. 5 Received credit from Braun's Wholesale Supply for merchandise returned $300. 9 Received collections in full, less discounts, from customers billed on sales of $2,300 on May 2. 10 Paid Braun's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $310. 12 Purchased merchandise for cash $1,300. 15 Received refund for poor quality merchandise from supplier on cash purchase $170. 17 Purchased merchandise from Valley Distributors $1,100, FOB shipping point, terms 2/10, n/30. 19 Paid freight on May 17 purchase $110. 24 Sold merchandise for cash $3,000. The merchandise sold had a cost of $2,090. 25 Purchased merchandise from Lumley, Inc. $710, FOB destination, terms 2/10, n/30. 27 Paid Valley Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $40. 31 Sold merchandise on account $1,170, terms n/30. The cost of the merchandise sold was $580. Journalize the transactions using a perpetual inventory system. (Credit account titles are automatically ina Date Account Titles and Explanation Debit Credit May 1 May 2 (To record credit sale) May 5 (To record cost of merchandise sold) May 9 v May 9Explanation / Answer
(a) Date Account Titles and Explanation Ref. Debit Credit May 1 Merchandise Inventory 120 $ 3,900 Accounts Payable 201 $ 3,900 May 2 Accounts Receivable 112 $ 2,300 Sales 401 $ 2,300 Cost of Goods Sold 505 $ 1,290 Merchandise Inventory 120 $ 1,290 May 5 Accounts Payable 201 $ 300 Merchandise Inventory 120 $ 300 May 9 Cash 101 $ 2,254 Sales Discounts ($2,300 X 2%) 414 $ 46 Accounts Receivable 112 $ 2,300 May 10 Accounts Payable ($3,900 – $300) 201 $ 3,600 Merchandise Inventory ($3,600 X 2%) 120 $ 72 Cash 101 $ 3,528 May 11 Supplies 126 $ 310 Cash 101 $ 310 May 12 Merchandise Inventory 120 $ 1,300 Cash 101 $ 1,300 May 15 Cash 101 $ 170 Merchandise Inventory 120 $ 170 May 17 Merchandise Inventory 120 $ 1,100 Accounts Payable 201 $ 1,100 May 19 Merchandise Inventory 120 $ 110 Cash 101 $ 110 May 24 Cash 101 $ 3,000 Sales 401 $ 3,000 Cost of Goods Sold 505 $ 2,090 Merchandise Inventory 120 $ 2,090 May 25 Merchandise Inventory 120 $ 710 Accounts Payable 201 $ 710 May 27 Accounts Payable 201 $ 1,100 Merchandise Inventory ($1,100 X 2%) 120 $ 22 Cash 101 $ 1,078 May 29 Sales Returns and Allowances 412 $ 70 Cash 101 $ 70 Merchandise Inventory 120 $ 40 Cost of Goods Sold 505 $ 40 May 31 Accounts Receivable 112 $ 1,170 Sales 401 $ 1,170 Cost of Goods Sold 505 $ 580 Merchandise Inventory 120 $ 580 (b) Cash No. 101 Date Explanation Ref. Debit Credit Balance May 1 Balance P 5,500 May 9 J1 2,254 7,754 May 10 J1 3,528 4,226 May 11 J1 310 3,916 May 12 J1 1,300 2,616 May 15 J1 170 2,786 May 19 J1 110 2,676 May 24 J1 3,000 5,676 May 27 J1 1,078 4,598 May 29 J1 70 4,528 Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance May 2 J1 2,300 2,300 May 9 J1 2,300 0 May 31 J1 1,170 1,170 Merchandise Inventory No. 120 Date Explanation Ref. Debit Credit Balance May 1 J1 3,900 3,900 May 2 J1 1,290 2,610 May 5 J1 300 2,310 May 10 J1 72 2,238 May 12 J1 1,300 3,538 May 15 J1 170 3,368 May 17 J1 1,100 4,468 May 19 J1 110 4,578 May 24 J1 2,090 2,488 May 25 J1 710 3,198 May 27 J1 22 3,176 May 29 J1 40 3,216 May 31 J1 580 2,636 Supplies No. 126 Date Explanation Ref. Debit Credit Balance May 11 J1 310 310 Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance May 1 J1 3,900 3,900 May 5 J1 300 3,600 May 10 J1 3,600 0 May 17 J1 1,100 1,100 May 25 J1 710 1,810 May 27 1,100 710 Owner's Capital No. 301 Date Explanation Ref. Debit Credit Balance May 1 Balance P 5,500 Sales Revenue No. 401 Date Explanation Ref. Debit Credit Balance May 2 J1 2,300 2,300 May 24 J1 3,000 5,300 May 31 J1 1,170 6,470 Sales Returns and Allowances No. 412 Date Explanation Ref. Debit Credit Balance May 29 J1 70 70 Sales Discounts No. 414 Date Explanation Ref. Debit Credit Balance May 9 J1 46 46 Cost of Goods Sold No. 505 Date Explanation Ref. Debit Credit Balance May 2 J1 1,290 1,290 May 24 J1 2,090 3,380 May 29 J1 40 3,340 May 31 J1 580 3,920 (c) RENNER HARDWARE STORE Income Statement (Partial) For the Month Ended May 31, 2017 Sales revenues $6,470 Sales Less: Sales returns and allowances $70 Sales discounts 46 116 Net sales 6,354 Cost of goods sold 3,920 Gross profit $ 2,434
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