1) A) Joy company bought $8000 of merchandise on account, terms 2/10 net 30 B) J

Question

1) A) Joy company bought $8000 of merchandise on account, terms 2/10 net 30

B) Joy returned $2000 of the merchandise

C) Joy had a cash sale of $10,000; the cost of the merchandise was $4500

D) Joy sold $12,000 on account terms 1/10 net 30; cost of the merchandise was $5500

E) Paid for the purchase in A, less the return.

F) Received payment from the sale in D.

2) A) BC company bought $18000 of merchandise on account, terms 1/10 net 30

B) BC returned $12000 of the merchandise

C) BC had a sale of $10,000 terms 2/10 net 30; the cost of the merchandise was $4500

D) BC sold $2,000 for cash; cost of the merchandise was $500

E) Paid for the purchase in A, less the return.

F) Received payment from the sale in C. It had two parts numbers 1 & 2 and each of those has 5 journal entries to do.

Explanation / Answer

1. Journal entries in the books of Joy Company:

Merchandise a/c or Inventory a/c

To Accounts payable a/c

(Being marchandise purchased on credit basis)

$8,000

Accounts payables a/c

To Merchandise a/c or inventory a/c

(Being Merchandise purchased returned)

$2,000

Cash a/c

Cost of goods sold a/c

To Merchandise a/c or Inventory a/c

To Sales revenue a/c

(Being Merchandise sold)

$10,000

$4,500

$4,500

$10,000

Accounts recivable a/c

Cost of goods sold a/c

To Merchandise a/c or Inventory a/c

To Sales revenue a/c

(being mechandise sold on credit basis)

$12,000

$5,500

$5,500

$12,000

Accounts payable a/c

To Cash a/c

(Being amount paid for the merchandise)

$6,000

2. Journal entries in the books of BC company:

Merchandise a/c or Inventory a/c

To Accounts payable a/c

(Being marchandise purchased on credit basis)

$18,000

Accounts payables a/c

To Merchandise a/c or inventory a/c

(Being Merchandise purchased returned)

$12,000

Accounts recivable a/c

Cost of goods sold a/c

To Merchandise a/c or Inventory a/c

To Sales revenue a/c

(being mechandise sold on credit basis)

$10,000

$4,500

$4,500

$10,000

Cash a/c

Cost of goods sold a/c

To Merchandise a/c or Inventory a/c

To Sales revenue a/c

(Being Merchandise sold)

$2,000

$500

$500

$2,000

Accounts payable a/c

To Cash a/c

(Being amount paid for the merchandise)

$6,000

Hope this is useful and thank U!!!!!

S.no general journal Debit Credit A

Merchandise a/c or Inventory a/c

To Accounts payable a/c

(Being marchandise purchased on credit basis)

$8,000

$8,000 B

Accounts payables a/c

To Merchandise a/c or inventory a/c

(Being Merchandise purchased returned)

$2,000

$2,000 C

Cash a/c

Cost of goods sold a/c

To Merchandise a/c or Inventory a/c

To Sales revenue a/c

(Being Merchandise sold)

$10,000

$4,500

$4,500

$10,000

D

Accounts recivable a/c

Cost of goods sold a/c

To Merchandise a/c or Inventory a/c

To Sales revenue a/c

(being mechandise sold on credit basis)

$12,000

$5,500

$5,500

$12,000

E

Accounts payable a/c

To Cash a/c

(Being amount paid for the merchandise)

$6,000

$6,000

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