The following selected transactions were completed by Green Lawn Supplies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers:
July
1. Sold merchandise on account to Landscapes Co., $33,450, terms FOB shipping point, n/eom. The cost of merchandise sold was $20,000.
2. Sold merchandise for $86,000 plus 8% sales tax to retail cash customers. The cost of merchandise sold was $51,600.
5. Sold merchandise on account to Peacock Company, $17,500, terms FOB destination, 1/10, n/30. The cost of merchandise sold was $10,000.
8. Sold merchandise for $112,000 plus 8% sales tax to retail customers who used VISA cards. The cost of merchandise sold was $67,200.
13. Sold merchandise to customers who used MasterCard cards, $96,000. The cost of merchandise sold was $57,600.
14. Sold merchandise on account to Loeb Co., $16,000, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $9,000.
15. Received check for amount due from Peacock Company for sale on July 5.
16. Issued credit memo for $3,000 to Loeb Co. for merchandise returned from sale on July 14. The cost of the merchandise returned was $1,800.
18. Sold merchandise on account to Jennings Company, $11,350, terms FOB shipping point, 2/10, n/30. Paid $475 for freight and added it to the invoice. The cost of merchandise sold was $6,800.
24. Received check for amount due from Loeb Co. for sale on July 14 less credit memo of July 16.
28. Received check for amount due from Jennings Company for sale of July 18.
31. Paid Black Lab Delivery Service $8,550 for delivery of merchandise in July to customers under shipping terms of FOB destination.
31. Received check for amount due from Landscapes Co. for sale of July 1.
Aug.
3. Paid Hays Federal Bank $3,770 for service fees for handling MasterCard and VISA sales during July.
10. Paid $41,260 to state sales tax division for taxes owed on sales.
Instructions
Journalize the entries to record the transactions of Green Lawn Supplies Co.
Answer:
July 1 Accounts Receivable—Landscapes Co. 33,450
Sales33,450
1 Cost of Merchandise Sold 20,000
Merchandise Inventory20,000
2 Cash92,880
Sales 86,000
Sales Tax Payable6,880
2 Cost of Merchandise Sold 51,600
Merchandise Inventory51,600
5 Accounts Receivable—Peacock Company 17,325
Sales17,325
[$17,500 – ($17,500 × 1%)]
5 Cost of Merchandise Sold 10,000
Merchandise Inventory10,000
8 Cash120,960
Sales 112,000
Sales Tax Payable8,960
8 Cost of Merchandise Sold 67,200
Merchandise Inventory67,200
13 Cash96,000
Sales 96,000
13 Cost of Merchandise Sold 57,600
Merchandise Inventory57,600
14 Accounts Receivable—Loeb Co. 15,840
Sales15,840
[$16,000 – ($16,000 × 1%)]
14 Cost of Merchandise Sold 9,000
Merchandise Inventory9,000
15 Cash17,325
Accounts Receivable—Peacock Company 17,325
July 16 Customer Refunds Payable 2,970
Accounts Receivable—Loeb Co.2,970
[$3,000 – ($3,000 × 1%)]
16 Merchandise Inventory1,800
Estimated Returns Inventory 1,800
18 Accounts Receivable—Jennings Company 11,123
Sales11,123
[$11,350 – ($11,350 × 2%)]
18 Accounts Receivable—Jennings Company 475
Cash475
18 Cost of Merchandise Sold 6,800
Merchandise Inventory6,800
24 Cash ($15,840 – $2,970) 12,870
Accounts Receivable—Loeb Co.12,870
28 Cash ($11,123 + $475) 11,598
Accounts Receivable—Jennings Company 11,598
31 Delivery Expense8,550
Cash8,550
31 Cash33,450
Accounts Receivable—Landscapes Co. 33,450
Aug. 3 Credit Card Expense3,770
Cash3,770
10 Sales Tax Payable41,260
Cash41,260