The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers:
Mar.
2. Sold merchandise on account to Equinox Co., $18,900, terms FOB destination, 1/10, n/30. The cost of the merchandise sold was $13,300.
3. Sold merchandise for $11,350 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $7,000.
4. Sold merchandise on account to Empire Co., $55,400, terms FOB shipping point, n/eom. The cost of merchandise sold was $33,200.
5. Sold merchandise for $30,000 plus 6% sales tax to retail customers who used MasterCard. The cost of merchandise sold was $19,400.
12. Received check for amount due from Equinox Co. for sale on March 2.
14. Sold merchandise to customers who used American Express cards, $13,700. The cost of merchandise sold was $8,350.
16. Sold merchandise on account to Targhee Co., $27,500, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $16,000.
18. Issued credit memo for $4,800 to Targhee Co. for merchandise returned from sale on March 16. The cost of the merchandise returned was $2,900.
19. Sold merchandise on account to Vista Co., $8,250, terms FOB shipping point, 2/10, n/30. Added $75 to the invoice for prepaid freight. The cost of merchandise sold was $5,000.
26. Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18.
28. Received check for amount due from Vista Co. for sale of March 19.
31. Received check for amount due from Empire Co. for sale of March 4.
31. Paid Fleetwood Delivery Service $5,600 for delivery of merchandise in March to customers under shipping terms of FOB destination.
Apr.
3. Paid City Bank $940 for service fees for handling MasterCard and American Express sales during March.
15. Paid $6,544 to state sales tax division for taxes owed on sales.
Instructions
Journalize the entries to record the transactions of Amsterdam Supply Co.
Answer:
Mar. 2 Accounts Receivable—Equinox Co. 18,711
Sales18,711
[$18,900 – ($18,900 × 1%)]
2 Cost of Merchandise Sold 13,300
Merchandise Inventory13,300
3 Cash12,031
Sales 11,350
Sales Tax Payable681
3 Cost of Merchandise Sold 7,000
Merchandise Inventory7,000
4 Accounts Receivable—Empire Co. 55,400
Sales55,400
4 Cost of Merchandise Sold 33,200
Merchandise Inventory33,200
5 Cash31,800
Sales 30,000
Sales Tax Payable1,800
5 Cost of Merchandise Sold 19,400
Merchandise Inventory19,400
12 Cash18,711
Accounts Receivable—Equinox Co. 18,711
14 Cash13,700
Sales 13,700
14 Cost of Merchandise Sold 8,350
Merchandise Inventory8,350
16 Accounts Receivable—Targhee Co. 27,225
Sales27,225
[$27,500 – ($27,500 × 1%)]
16 Cost of Merchandise Sold 16,000
Merchandise Inventory16,000
Mar. 18 Customer Refunds Payable 4,752
Accounts Receivable—Targhee Co.4,752
[$4,800 – ($4,800 × 1%)]
18 Merchandise Inventory2,900
Estimated Returns Inventory 2,900
19 Accounts Receivable—Vista Co. 8,085
Sales8,085
[$8,250 – ($8,250 × 2%)]
19 Accounts Receivable—Vista Co. 75
Cash75
19 Cost of Merchandise Sold 5,000
Merchandise Inventory5,000
26 Cash ($27,225 – $4,752)22,473
Accounts Receivable—Targhee Co.22,473
28 Cash ($8,085 + $75)8,160
Accounts Receivable—Vista Co.8,160
31 Cash55,400
Accounts Receivable—Empire Co.55,400
31 Delivery Expense5,600
Cash5,600
Apr. 3 Credit Card Expense940
Cash940
15 Sales Tax Payable6,544
Cash6,544