The following were selected from among the transactions completed by Caldemeyer

Question

The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems. Jan. 3. Loaned $15,600 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10. Sold merchandise on account to Bradford & Co., $28,200. The cost of the merchandise sold was $16,920. 13. Sold merchandise on account to Dry Creek Co., $64,800. The cost of merchandise sold was $58,320. Mar. 12. Accepted a 60-day, 6% note for $28,200 from Bradford & Co. on account. 14. Accepted a 60-day, 9% note for $64,800 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford & Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5. Sold merchandise on account to Halloran Co., $14,800, net/30. The cost of the merchandise sold was $8,880. 15. Received from Halloran Co. the amount of the invoice of October 5.

Explanation / Answer

Date Account title and explanation Debit ($) Credit($) Jan-03 Trina Galhaus       15,600       To cash      15,600 (Being loaned cash) 8% Note Receivable       15,600           To Trina Galhaus      15,600 (being note accepted in consideration of loan) Feb-10 Bradford & Co. 28200        To Cost of goods sold 16920         To Profit on sale of goods 11280 (Being merchandise sold on credit) Feb-13 Dry Creek Co. 64800        To Cost of goods sold 58320         To Profit on sale of goods 6480 (Being merchandise sold on credit) Mar-12 6% note Receivable 28200       To Bradford & Co. 28200 (being note received in consideration of Merchandised sold) Mar-14 9% note Receivable 64800       To Dry Creek Co. 64800 (being note received in consideration of Merchandised sold) Apr-03 Cash 308 To Interest Receivable 308 (being Interest received ) 9% Note Receivable 15600         To 8% Note Receivable 15600 (Being note renewed) May-11 Cash 28200        To Bradford Co. 28200 (being Cash received on due date) Oct-05 Halloran Co 14800        To Cost of goods sold 8880         To Profit on sale of goods 5920 (Being goods sold on Credit) Oct-15 Cash 14800          To halloran Co. 14800 (being Cash receivved)

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