The following were selected from among the transactions completed by Wild Advent
ID: 2612668 • Letter: T
Question
The following were selected from among the transactions completed by Wild Adventures Company during December of the current year:
Paid MasterCard service fee of $2,660.
Dec. 3. Purchased merchandise on account from Miramar Co., list price $48,000, trade discount 25%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $1,200 added to the invoice. 5. Purchased merchandise on account from Grand Canyon Co., $13,950, terms FOB destination, 2/10, n/30. 6. Sold merchandise on account to Arches Co., list price $43,000, trade discount 20%, terms 2/10, n/30. The cost of the merchandise sold was $22,400. 7. Returned $2,200 of merchandise purchased on December 5 from Grand Canyon Co. 13. Paid Miramar Co. on account for purchase of December 3, less discount. 15. Paid Grand Canyon Co. on account for purchase of December 5, less return of December 7 and discount. 16. Received cash on account from sale of December 6 to Arches Co., less discount. 19. Sold merchandise on MasterCard, $71,100. The cost of the merchandise sold was $42,700. 22. Sold merchandise on account to Yellowstone River Co., $10,400, terms 2/10, n/30. The cost of the merchandise sold was $6,000. 23. Sold merchandise for cash, $35,100. The cost of the merchandise sold was $21,100. 28. Received merchandise returned by Yellowstone River Co. from sale on December 22, $1,700. The cost of the returned merchandise was $1,000. 31.Paid MasterCard service fee of $2,660.
Explanation / Answer
Dec. 3 Merchandise Inventory...................................... 37200
Accounts Payable—Miramar Co .................... 37200
[$48000 – ($48,000 × 25%)] = $36000
$36000 + $1200 = $37200
5 Merchandise Inventory............................................ 13950
Accounts Payable—Grand Canyon Co. . .... 13950
6 Accounts Receivable— Arches Co...................... 34400
Sales....................................................................... 34400
[$43000 – ($43000 × 20%)] = $34400.
6 Cost of Merchandise Sold....................................... 22400
Merchandise Inventory...................................... 22400
7 Accounts Payable—Grand Canyon Co. . .......... 2200
Merchandise Inventory...................................... 2200
13 Accounts Payable—Miramar Co .......................... 37200
Cash........................................................................ 36480
Merchandise Inventory...................................... 720
15 Accounts Payable—Grand Canyon Co. . .......... 11750
Cash........................................................................ 11515
Merchandise Inventory...................................... 235
16 Cash.............................................................................. 33712
Sales Discounts......................................................... 688
Accounts Receivable— Arches Co................ 34400
19 Cash.............................................................................. 71100
Sales....................................................................... 71100
19 Cost of Merchandise Sold....................................... 42700
Merchandise Inventory...................................... 42700
22 Accounts Receivable—Yellowstone River Co. . 10400
Sales....................................................................... 10400
22 Cost of Merchandise Sold....................................... 6000
Merchandise Inventory...................................... 6000
23 Cash.............................................................................. 35100
Sales....................................................................... 35100
23 Cost of Merchandise Sold....................................... 21100
Merchandise Inventory...................................... 21100
28 Sales Returns and Allowances.............................. 1700
Accounts Receivable— Yellowstone River Co. .. 1700
28 Merchandise Inventory............................................ 1000
Cost of Merchandise Sold................................. 1000
31 Credit Card Expense................................................ 2660
Cash........................................................................ 2660
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