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

Q9PGB

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 295

Short Answer

Question: Journalize the following transactions that occurred in January 2018 for Mike’s Amusements. Assume Mike’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.

Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, $5,000. Terms 1/10, n/EOM, FOB shipping point.

6 Paid freight bill of $150 on January 4 purchase.

8 Returned half the inventory purchased on January 4 from Vanderbilt Company.

10 Sold merchandise inventory for cash, $1,100. Cost of goods, $440. FOB destination.

11 Sold merchandise inventory to Gilmore Corporation, $10,100, on account, terms of 3/10, n/EOM. Cost of goods, $5,555. FOB shipping point.

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

13 Sold merchandise inventory to Cadet Company, $8,800, on account, terms of 3/10, n/45. Cost of goods, $4,400. FOB shipping point.

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

18 Purchased inventory of $4,600 on account from Roberts Corporation. Payment terms were 1/10, n/30, FOB destination.

20 Received cash from Gilmore Corporation, less discount.

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

28 Received cash from Cadet Company.

29 Purchased inventory from Silk Corporation for cash, $12,000, FOB shipping point. Freight in paid to shipping company, $240.

Answer

The total of debits and credits is $80,915

See the step by step solution

Step by Step Solution

Step 1: Meaning of Sales Returns

In accounting, sales returns refer to the goods returned by the customers. Sales returns occur when goods are not up to the mark, are defective, or are found damaged by the customers. Sales returns decrease the sales revenues of the business entity and are treated separately in the books.

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.