P5-18 Urdan Co. distributes suitcases to retail stores and extends credit terms
ID: 2528962 • Letter: P
Question
P5-18 Urdan Co. distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers. At the end of June, Urdan's inventory consisted of suitcases costing $1,200. During the month of July, the following merchandising transactions occurred Purchased suitcases on account for $1,800 from Hostad Manufacturers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $100 for freight on this date. Sold suitcases on account to Kaye Satchels for $2,000. The cost of suitcases sold is $1,200. Paid Hostad Manufacturers in full. Received payment in full from Kaye Satchels. Sold suitcases on account to The Going Concern for $1,800. The cost of the suitcases sold was $1,080. Purchased suitcases on account for $1,900 from Nelson Manufacturers, FOB shipping point, terms 1/10, n/30. The appropriate party also made a cash payment of $125 for freight on this date. Received $300 credit (including freight) for suitcases returned to Nelson Manufacturers Received payment in full from The Going Concern. Sold suitcases on account to Wopat's for $2,250. The cost of suitcases sold was $1,350 Paid Nelson Manufacturers in full. Granted Wopat's $200 credit for suitcases returned costing $120. July 1 3 9 12 17 18 20 21 22 30 31 Urdan's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receiv- able, No. 120 Inventory, No. 201 Accounts Payable, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold. Instructions Journalize the transactions for the month of July for Urdan using a perpetual inventory system.Explanation / Answer
Urban Co. General Journal Date Particular Amount (Dr) Amount (Cr) 1-Jul Inventory $ 1,800.00 To Accounts Payable-Hostand Manufacturers $ 1,800.00 (Being Amount of Suitcases Purchased on account from Hostand Manufacturers) 3-Jul Accounts Receivable $ 2,000.00 To Sales $ 2,000.00 (Being amount of sales to Kaye Satchels) 3-Jul Cost of goods sold $ 1,200.00 To Inventory $ 1,200.00 (Being amount of cost of goods sold) 9-Jul Accounts Payable $ 1,800.00 To Inventory=($1800*2%) $ 36.00 To Cash=($1800*98%) $ 1,764.00 (Being amount paid to Hostand Manufacturer) 12-Jul Cash=(2000*99%) $ 1,980.00 Sales Discount=(2000*1%) $ 20.00 To Accounts Receivable $ 2,000.00 (Being amount of payament received from Kaye Satchels) 17-Jul Accounts Receivable $ 1,800.00 To Sales $ 1,800.00 (Being amount of sales to Going Concern) 17-Jul Cost of goods sold $ 1,080.00 To Inventory $ 1,080.00 (Being amount of cost of goods sold) 18-Jul Inventory $ 1,900.00 To Accounts Payable $ 1,900.00 (Being amount of Suitcase purchased from Nelson Manufacturers) 18-Jul Inventory $ 125.00 To Cash $ 125.00 (Being amount of Freight paid) 20-Jul Accounts Payable $ 300.00 To Inventory $ 300.00 (Being amount of suitcased returned) 21-Jul Cash=(1800*99%) $ 1,782.00 Sales Discount=(1800*1%) $ 18.00 To Accounts Receivable $ 1,800.00 (Being amount paid to Going Concern) 22-Jul Accounts Receivable $ 2,250.00 To Sales $ 2,250.00 (Being amount of sales to Wopat's ) 22-Jul Cost of goods sold $ 1,350.00 To Inventory $ 1,350.00 (Being amount of cost of goods sold) To Accounts Receivable $ - 30-Jul Accounts Payable $ 1,900.00 To Inventory=(1900*1%) $ 19.00 To Cash=(1900*99%) $ 1,881.00 (Being amount paid to Nelson) 31-Jul Sales Retuen & Allowances $ 200.00 To Accounts Receivable $ 200.00 (Being amount of goods returned by Wopat's) 31-Jul Inventory $ 120.00 To Cost of goods sold $ 120.00 (Being amount of cost of goods returned)
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