The Jewel Box purchases jewellery from around the world and sells to local retai

Question

The Jewel Box purchases jewellery from around the world and sells to local retailers in Canada. Consider the following perpetual system merchandising transactions of The Jewel Box. Use a separate account for each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Luu Company. Aug. 1 Purchased necklaces from Luu Company for $4,700 under credit terms of 3/10, n/30, FOB destination. 4 At Luu Company’s request, paid $420 for freight charges on the August 1 purchase, reducing the amount owed to Luu. 5 Sold rings to Green Ruby for $4,220 under credit terms of 2/10, n/60, FOB destination. The merchandise had cost $2,820. 8 Purchased bracelets from Jane Co. for $5,900 under credit terms of 1/10, n/45, FOB shipping point. 9 Paid $395 shipping charges related to the August 5 sale to Green Ruby. 10 Green Ruby returned the rings purchased from the August 5 sale that had cost $510 and been sold for $870. The merchandise was restored to inventory. 12 After negotiations with Jane Co. concerning problems with the merchandise purchased on August 8, received a credit memo from Jane granting a price reduction of $300. 15 Received balance due from Green Ruby for the August 5 sale. 17 Purchased office equipment from WestCo on credit, $6,700, n/45. 18 Paid the amount due Jane Co. for the August 8 purchase. 19 Sold earrings to Chic Jewellery for $2,150 under credit terms of 1/10, n/30, FOB shipping point. The merchandise had cost $1,060. 22 Chic Jewellery requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Sent Chic Jewellery a credit memo for $250 to resolve the issue. 29 Received Chic Jewellery’s payment of the amount due from the August 19 purchase. 30 Paid Luu Company the amount due from the August 1 purchase. Prepare General Journal entries to record the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

JOURNAL FOR JEWELLERY

DATE

TRANSACTION

AMOUNT      $

DEBIT

A/C

CREDIT

A/C

AUG

1

PURCHASES FROM LUU

4700

PURCHASES

ACC PAY

LUU

4

PAID FREIGHT LUU REQUEST

420

ACC PAY LUU

CASH

5

SALES GREEN RUBY

4220

ACC REC – GREEN RUBY

SALES

8

PURCHASES FROM JANE

5900

PURCHASES

ACC PAY JANE

9

PAID FREIGHT GREEN RUBY

395

ACC REC GREEN RUBY

CASH

10

SALES RETURNS GREEN RUBY

870

SALES RETURNS

ACC REC

GREEN RUBY

12

CREDIT MEMO FROM JANE FOR FAULTY GOODS

300

ACC PAY

JANE

DISCOUNT RECEIVED

15

RECEIPT OF CASH FROM

GREEN RUBY

3670

CASH

ACC REC

GREEN RUBY

DISCOUNT ALLOWED G RUBY

75

DIS ALLOWED

ACC REC GREEN RUBY

17

OFFICE EQUIPMENT FROM WESTCO

6700

OFFICE EQUIPMENT

ACC PAY

WESCO

18

CASH PAID TO JANE

5544

ACC PAY

JANE

CASH

18

DISCOUNT RECEIVED JANE

56

ACC PAY

JANE

DISCOUNT RECEIVED

19

SALES TO ACC REC - CHIC

2150

ACC REC

CHIC

SALES

19

CREDIT MEMO TO CHIC FOR FAULTY GOODS

250

SALES RETURNS

ACC REC

CHIC

29

CASH RECEIPT FROM CHIC

1881

CASH

ACC REC

CHIC

29

DISCOUNT ALLOWED FOR CHIC

19

DISCOUNT

ALLOWED

ACC REC

CHIC

30

CASH PAYMENT TO ACC PAY

LUU

4280

ACC PAY

LUU

CASH

JOURNAL FOR JEWELLERY

DATE

TRANSACTION

AMOUNT      $

DEBIT

A/C

CREDIT

A/C

AUG

1

PURCHASES FROM LUU

4700

PURCHASES

ACC PAY

LUU

4

PAID FREIGHT LUU REQUEST

420

ACC PAY LUU

CASH

5

SALES GREEN RUBY

4220

ACC REC – GREEN RUBY

SALES

8

PURCHASES FROM JANE

5900

PURCHASES

ACC PAY JANE

9

PAID FREIGHT GREEN RUBY

395

ACC REC GREEN RUBY

CASH

10

SALES RETURNS GREEN RUBY

870

SALES RETURNS

ACC REC

GREEN RUBY

12

CREDIT MEMO FROM JANE FOR FAULTY GOODS

300

ACC PAY

JANE

DISCOUNT RECEIVED

15

RECEIPT OF CASH FROM

GREEN RUBY

3670

CASH

ACC REC

GREEN RUBY

DISCOUNT ALLOWED G RUBY

75

DIS ALLOWED

ACC REC GREEN RUBY

17

OFFICE EQUIPMENT FROM WESTCO

6700

OFFICE EQUIPMENT

ACC PAY

WESCO

18

CASH PAID TO JANE

5544

ACC PAY

JANE

CASH

18

DISCOUNT RECEIVED JANE

56

ACC PAY

JANE

DISCOUNT RECEIVED

19

SALES TO ACC REC - CHIC

2150

ACC REC

CHIC

SALES

19

CREDIT MEMO TO CHIC FOR FAULTY GOODS

250

SALES RETURNS

ACC REC

CHIC

29

CASH RECEIPT FROM CHIC

1881

CASH

ACC REC

CHIC

29

DISCOUNT ALLOWED FOR CHIC

19

DISCOUNT

ALLOWED

ACC REC

CHIC

30

CASH PAYMENT TO ACC PAY

LUU

4280

ACC PAY

LUU

CASH

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