The following were selected from among the transactions completed by Essex Compa

Question

The following were selected from among the transactions completed by Essex Company during July of the current year:

Required:

Journalize the entries to record the transactions of Essex Company for July using the periodic inventory system.

For a compound transaction, if an amount box does not require an entry, leave it blank.

July 3. Purchased merchandise on account from Hamling Co., list price $72,000, trade discount 15%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $1,450 added to the invoice. 5. Purchased merchandise on account from Kester Co., $33,450, terms FOB destination, 2/10, n/30. 6. Sold merchandise on account to Parsley Co., $36,000, terms n/15. The cost of the merchandise sold was $25,000. 7. Returned $6,850 of merchandise purchased on July 5 from Kester Co. 13. Paid Hamling Co. on account for purchase of July 3. 15. Paid Kester Co. on account for purchase of July 5, less return of July 7. 21. Received cash on account from sale of July 6 to Parsley Co. 21. Sold merchandise on MasterCard, $108,000. The cost of the merchandise sold was $64,800. 22. Sold merchandise on account to Tabor Co., $16,650, terms 2/10, n/30. The cost of the merchandise sold was $10,000. 23. Sold merchandise for cash, $91,200. The cost of the merchandise sold was $55,000. 28. Paid Parsley Co. a cash refund of $7,150 for returned merchandise from sale of July 6. The cost of the returned merchandise was $4,250. 31. Paid MasterCard service fee of $1,650.

Explanation / Answer

  Essex Company  

Journal Entries (Amounts in $)

Date Account Titles Debit Credit July 3 Purchases ($72,000*85%) 61,200 Accounts Payable-Hamling Co. 61,200 July 5 Purchases 33,450 Accounts Payable-Kester Co. 33,450 July 6 Accounts Receivable-Parsley Co. 36,000 Sales 36,000 July 7 Accounts Payable-Kester Co. 6,850 Purchases returns and allowances 6,850 July 13 Accounts Payable-Hamling Co. 61,200 Cash ($61,200 - $1,224) 59,976 Purchases Discounts ($61,200*2%) 1,224 July 15 Accounts Payable-Kester Co. ($33,450-$6,850) 26,600 Cash ($26,600-$532) 26,068 Purchases Discounts ($26,600*2%) 532 July 21 Cash 36,000 Accounts Receivable-Parsley Co. 36,000 July 21 Cash 108,000 Sales 108,000 July 22 Accounts Receivable-Tabor Co. 16,650 Sales 16,650 July 23 Cash 91,200 Sales 91,200 July 28 Sales returns and allowances 7,150 Cash 7,150 July 31 Credit Card Expense 1,650 Cash 1,650

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