Finer Company uses a sale journal, a purchase journal, a cash receipts journal,
ID: 2451805 • Letter: F
Question
Finer Company uses a sale journal, a purchase journal, a cash receipts journal, a cash disbursements journal, and a general journal. The following transactions occur in the month of May.
May 2 Sold merchandise costing #300 to B. Facer for $450 cash, Invoice No. 5703.
5 Purchased $2,400 of merchandise on credit from Marchant Corp.
7 Sold merchandise costing $800 to J. Dryer for $1,250, terms 2/10, n/30, Invoice No. 5704.
8 Borrowed $9,000 cash by signing a note payable to the bank.
12 Sold merchandise costing $200 to R. Lamb for $340, terms n/30, Invoice No. 5705.
16 Received $1,225 cash from J. Dryer to pay for the purchase of May 7.
19 Sold used store equipment for $900 cash to Golf Inc.
25 Sold merchandise costing $500 to T. Taylor for $750, terms n/30, Invoice No. 5706
Prepare headings for a sales journal like the one in Exhibit 7.5 (Principles of Financial Accounting Ed. 22 Wild). Journalize the May transactions that should be recorded in this sales journal.
Explanation / Answer
7May J Dryer Account Dr. $1250
Cost of goods sold Account Dr. $800
To Merchandise sales $1250
To Inventory Account $800
(Being merchandise costing $800 to J. Dryer for $1,250, terms 2/10, n/30, Invoice No. 5704)
12May R Lamb Account Dr. $340
Cost of goods sold Dr. $200
To Merchandise sale $340
To Inventory $200
(Being merchandise sold costing $200 to R. Lamb for $340, terms n/30, Invoice No. 5705.)
16May cash Account Dr. $1225
Discount issued on sale Dr. $25
To J Dryer Account $1250
(Being cash received from J, term 2/10, n/30, discount amount of $25 {1250 * 2% = 25} )
25May T Taylor Account Dr .$750
Cost of goods sold Dr.$500
To Merchandise sale $750
To Inventory $500
(Being merchandise sold costing $500 to T. Taylor for $750, terms n/30, Invoice No. 5706)
Note: Transactions recorded in Sales journal are in nature sale of Accounts receivable, not sale for cash, issuing note payable , purchase of merchandise.
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