Finer Company uses a sales journal, a purchases journal, a cash receipts journal

Question

Finer Company uses a sales journal, a purchases 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. Journalize the May transactions that should be recorded in the sales journal assuming the perpetual inventory system is used.

Explanation / Answer

Journal entries: Date Accounts title and explanations Debit $ Credit $ 2-May Cash Account Dr. 450         Sales revenue 450 2-May Cost of Goods sold Dr. 300        Inventory 300 5-May Inventry Account Dr. 2400       Accounts payable-Marchant 2400 7-May Accounts receivable-J dyer 1250      Sales revenue 1250 7-May Cost of Goods sold Dr. 800        Inventory 800 8-May Cash Account Dr. 9000       Notes payable 9000 12-May Accounts receivable-R Lamb Account Dr. 340        Sales revenue 340 12-May Cost of Goods sold Dr. 200      Inventory 200 16-May Cash Account Dr. (1250*98%) 1225 Sales discount Dr. 25     Accounts receivable-J dyre 1250 19-May Cash Account Dr. 900       Stores equipment Account 900 25-May Accounts receivable-T Taylor 750       Sales revenue 750 25-May Cost of Goods sold Dr. 500       Inventory 500

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