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Horngren'S Financial And Managerial Accounting
Found in: Page 611

Short Answer

The following transactions of Plymouth Pharmacies occurred during 2017 and 2018:

2017

Jan. 9 Purchased computer equipment at a cost of $12,000, signing a six-month, 9% note payable for that amount.

29 Recorded the week’s sales of $63,000, three-fourths on credit and onefourth for cash. Sales amounts are subject to a 6% state sales tax. Ignore cost of goods sold.

Feb. 5 Sent the last week’s sales tax to the state.

Jul. 9 Paid the six-month, 9% note, plus interest, at maturity.

Aug. 31 Purchased merchandise inventory for $9,000, signing a six-month, 10% note payable. The company uses the perpetual inventory system.

Dec. 31 Accrued warranty expense, which is estimated at 4% of sales of $609,000.

31 Accrued interest on all outstanding notes payable.

2018

Feb. 28 Paid the six-month 10% note, plus interest, at maturity.

Journalize the transactions in Plymouth’s general journal. Explanations are not required. Round to the nearest dollar.

Credit Sales Amount: $50,085

Cash Sales Amount: $16,695

See the step by step solution

Step by Step Solution

Step 1: Journal entries

Step 2: Working notes

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