PROBLEM 1 MERCHANDISING TRANSACTIONS (30 POINTS) Smith Co. distributes suitcase

Question

PROBLEM 1 MERCHANDISING TRANSACTIONS (30 POINTS) Smith Co. distributes suitcase to retail stores. During the month of Juty, the toWowing, merchandining tr ansactions occurred July 1 Purchased suitcase on account for $1,800 from Edward Manufacturers, terms 2/1o, n/30 3 sold suitcase on account t Paid Edward Manufacturers in full. (Discount) Received payment in full from Anderson Co Anderson Co. $2,000, terms 1/10, n/30 The cost of suitcases sold isao. 9 12 17 Purchased suitcase on account for $1,900 from Bryan Manufacturers, terms 1/10, n/30. 20 Received $300 credit for suitcases returned to Bryan Manufacturers. 21 Paid Bryan Manufacturers in Full. (Discount and Credit) 22 Sold Suitcases on account to Walsh Co. for $2,250, terms 1/10, n/30. The cost of suitcases sold is $1,350 30 Granted Walsh $200 credit for suitcase returned costing $120 CASH, ACCOUNT RECEIVABLE, INVENTORY, ACCOUNT PAYBLE, SALES REVENUE, SALES RETURN AND ALLOWANCE, SALES DISCOUNTS AND COST OF GOODS SOLD Smith's chart of accounts includes the following: INSTRUCTION: Journal the transaction for the month of July for Smith Co. using a perpetual inventory system.

Explanation / Answer

Jjournal entries: Date Accounts title and explanations Debit $ Credit $ 1-Jul Inventory Account Dr. 1800    Acounts payable 1800 3-Jul Accounts receivable Dr. 2000      sales revenue 2000 Cost of Goods sold Dr. 1000     Inventory 1000 9-Jul Accounts payable Dr. 1800      Cash Account 1764      Inventory (1800*2%) 36 12-Jul Cash Account Dr. (2000*99%) 1980 Sales discount and allowance Dr. 20      Accounts receivable 2000 17-Jul Inventory Account Dr. 1900    Acounts payable 1900 20-Jul Accounts payable Ddr. 300      Inventory Account 300 21-Jul Accounts payable Dr. 1600     Cash Account 1584      Inventory (1600*1%) 16 22-Jul Accounts receivable Dr. 2250     Sales revenue 2250 Cost of Goods sold Dr. 1350     Inventory Account 1350 30-Jul Sales return Dr. 200      Accounts receivable 200 Inventory Account Dr. 120     Cost of Goods sold 120

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