FULL SCREEN PRINTER Problem 7-4A Selected accounts from the chart of accounts of

Question

FULL SCREEN PRINTER Problem 7-4A Selected accounts from the chart of accounts of Mercer Company are shown below 101 Cash 112 Accounts Receivable 412 Sales Returns and Allowances 120 Inventory 126 Supplies 157 Equipment 201 Accounts Payable 401 Sales Revenue 414 Sales Discounts 505 Cost of Goods Sold 726 Salaries and Wages Expense The cost of a" merchandise sold was 60% of the sales price. During January, Mercer completed the following transactions. Jan. 3 Purchased merchandise on account from Gallagher Co. $10,100. 4 Purchased supplies for cash $90 4 Sold merchandise on account to Wheeler $6,030, invoice no. 371, terms 1/1O, n/30. 5 Returned $500 worth of damaged goods purchased on account from Gallagher Co. on January 3 6 Made cash sales for the week totaling $3,840 8 Purchased merchandise on account from Phegley Co. $5,600. 9 Sold merchandise on account to Linton Corp. $7,800, invoice no. 372, terms 1/10, n/30. 11 Purchased merchandise on account from Cora Co.$3,630 13 Paid in full Gallagher Co. on account less a 2% discount. 13 Made cash sales for the week totaling $5,380. 15 Received payment from Linton Corp, for invoice no. 372 15 Paid semi-monthly salaries of $14,700 to employees. 17 Received payment from Wheeler for invoice no. 371. 17 Sold merchandise on account to Delaney Co. $1,160, invoice no. 373, terms 1/10, n/30. 19 Purchased equipment on account from Dozier Corp. $5.070

Explanation / Answer

(a) Sales Journal Date Account Debited Invoice No: Ref Account receivables Dr Cost of goods sold Dr Sales Cr merchandise Invenotry Cr Jan-04 wheeler 371 6030 3618 Jan-09 Linton corp 372 7800 4680 Jan-17 Delaney 373 1160 696 Jan-31 wheeler 374 9620 5772 24610 14766 (112) (401) (505) (120) Purchase Journal Date Credited Ref merchandise Invenotry Cr Account Payable Jan-03 Gallargher 10100 Jan-08 Phegley 5600 Jan-11 Cora co 3630 Jan-23 Gallargher 7570 Jan-24 Atchison 5000 31900 (120) (201) General Journal date accounts & Explanations' Ref Debit Credit Jan-05 Account Payable -gallagher Co 201 500          To Merchandise inventory 120 500 (being Goods returned has been recorded) Jan-19 Equipment A/c 157 5070         To Account Payables - Dozier 201 5070 (Being equipment Has been Purchased on account) Cash receipts Journal Date Account credited ref cash Dr Sales Discounts Dr Account receivables Cr Sales Cr Other accounts Cr Cost of goods sold Dr Merchandise inventory cr Jan-06 3840 3840 2304 13 5830 5380 3228 15 Linton corp 7644 156 7800 17 Wheeler 6030 6030 20 4230 4230 2538 27 4790 4790 2874 30 Delaney Co 1160 1160 33524 156 14990 18240 0 10944 (101). (414). (112). (401). (X). (505).(120) Cash payments Journal Date Accounts debited Ref Other Accounts Dr Account Payables Dr Merchandise Invenotry Cr cash Cr Jan-04 Supplies 126 90 90 13 Gallagher Co 9600 192 9408 15 Salaries expenses 726 14700 14700 20 Phegley Co 5600 112 5488 31 Salaries expenses 726 12060 12060 26850 15200 304 41746

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