Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

7PGA

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 325

Short Answer

Journalize the following transactions that occurred in November 2018 for May’s Adventure Park. Assume May’s uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.

Nov. 4 Purchased merchandise inventory on account from Valera Company, $8,000. Terms 1/10, n/EOM, FOB shipping point.

6 Paid freight bill of $160 on November 4 purchase.

8 Returned half the inventory purchased on November 4 from Valera Company.

10 Sold merchandise inventory for cash, $1,700. Cost of goods, $680. FOB destination.

11 Sold merchandise inventory to Garrison Corporation, $10,300, on account, terms of 3/10, n/EOM. Cost of goods, $5,150. FOB shipping point.

12 Paid freight bill of $30 on November 10 sale.

13 Sold merchandise inventory to Cain Company, $9,000, on account, terms of 1/10, n/45. Cost of goods, $4,500. FOB shipping point.

14 Paid the amount owed on account from November 4, less return and discount.

18 Purchased inventory of $3,700 on account from Regan Corporation. Payment terms were 2/10, n/30, FOB destination.

20 Received cash from Garrison Corporation, less discount.

26 Paid amount owed on account from November 18, less discount.

28 Received cash from Cain Company.

29 Purchased inventory from Sanders Corporation for cash, $12,000, FOB shipping point. Freight in paid to shipping company, $200.

The total of debits and credits is $86,420.

See the step by step solution

Step by Step Solution

Step 1: Meaning of Corporation

The term corporation refers to an entity established by the association of individuals or groups to accomplish the common goals stated by the upper management. A corporation is established after the fulfilment of required legalities.

Step 2: Preparation of journal entries

Date

Accounts and Explanation

Debit ($)

Credit ($)

Nov 4

Merchandise inventory

8,000

Accounts payable (Valera)

8,000

Nov 6

Freight-in

160

Cash

160

Nov 8

Accounts payable (Valera)

4,000

Merchandise inventory

4,000

Nov 10

Cash

1,700

Sales revenue

1,700

Nov 10

Cost of goods sold

680

Merchandise inventory

680

Nov 11

Accounts receivable (Garrison)

10,300

Sales revenue

10,300

Nov 11

Cost of goods sold

5,150

Merchandise inventory

5,150

Nov 12

Delivery expense

30

Cash

30

Nov 13

Accounts receivable (Cain)

9,000

Sales revenue

9,000

Nov 13

Cost of goods sold

4,500

Merchandise inventory

4,500

Nov 14

Accounts payable (Valera) [8000-4000]

4,000

Cash

3,960

Merchandise inventory (4000*1%)

40

Nov 18

Merchandise inventory

3,700

Accounts payable (Regan)

3,700

Nov 20

Cash

9,991

Sales discount (10300*3%)

309

Accounts receivable (Garrison)

10,300

Nov 26

Accounts payable (Regan)

3,700

Merchandise inventory (3700*2%)

74

Cash

3,626

Nov 28

Cash

9,000

Accounts receivable (Cain)

9,000

Nov 29

Merchandise inventory

12,000

Cash

12,000

Nov 29

Freight-in

200

Cash

200

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.