Selected accounts from the chart of accounts of Malone Company are shown below.
|
101 |
Cash |
201 |
Accounts Payable |
|
112 |
Accounts Receivable |
401 |
Sales Revenue |
|
120 |
Inventory |
414 |
Sales Discounts |
|
126 |
Supplies |
505 |
Cost of Goods Sold |
|
140 |
Land |
610 |
Advertising Expense |
|
145 |
Buildings |
The cost of all merchandise sold was 65% of the sales price. During October, Malone Company completed the following transactions.
|
2 |
Purchased merchandise on account from Ryan Company $12,000. |
|
|
4 |
Sold merchandise on account to Howard Co. $5,600. Invoice no. 204, terms 2/10, n/30. |
|
|
5 |
Purchased supplies for cash $60. |
|
|
7 |
Made cash sales for the week totaling $6,700. |
|
|
9 |
Paid in full the amount owed Ryan Company less a 2% discount. |
|
|
10 |
Purchased merchandise on account from Arduino Corp. $2,600. |
|
|
12 |
Received payment from Howard Co. for invoice no. 204. |
|
|
13 |
Returned $150 worth of damaged goods purchased on account from Arduino Corp. on |
|
|
October 10. |
||
|
14 |
Made cash sales for the week totaling $6,000. |
|
|
16 |
Sold a parcel of land for $20,000 cash, the land’s original cost. |
|
|
17 |
Sold merchandise on account to BJ’s Warehouse $3,900, invoice no. 205, terms 2/10, n/30. |
|
|
18 |
Purchased merchandise for cash $1,600. |
|
|
21 |
Made cash sales for the week totaling $6,000. |
|
|
23 |
Paid in full the amount owed Arduino Corp. for the goods kept (no discount). |
|
|
25 |
Purchased supplies on account from Paul Martin Co. $190. |
|
|
25 |
Sold merchandise on account to David Corp. $3,800, invoice no. 206, terms 2/10, n/30. |
|
|
25 |
Received payment from BJ’s Warehouse for invoice no. 205. |
|
|
26 |
Purchased for cash a small parcel of land and a building on the land to use as a storage facility. |
|
|
The total cost of $26,000 was allocated $16,000 to the land and $10,000 to the building. |
||
|
27 |
Purchased merchandise on account from Novak Co. $6,200. |
|
|
28 |
Made cash sales for the week totaling $5,500. |
|
|
30 |
Purchased merchandise on account from Ryan Company $10,000. |
|
|
30 |
Paid advertising bill for the month from the Gazette, $290. |
|
|
30 |
Sold merchandise on account to BJ’s Warehouse $3,400, invoice no. 207, terms 2/10, n/30. |
Malone Company uses the following journals.
1. Sales journal.
2. Single column purchases journal.
3. Cash receipts journal with columns for Cash Dr., Sales Discounts Dr., Accounts Receivable Cr., Sales Revenue Cr., Other Accounts Cr., and Cost of Goods Sold Dr./Inventory Cr.
4. Cash payments journal with columns for Other Accounts Dr., Accounts Payable Dr., Inventory Cr., and Cash Cr.
5. General journal.
Instructions
Using the selected accounts provided:
(a) Record the October transactions in the appropriate journals.
(b) Foot and cross foot all special journals.
(c) Show how postings would be made by placing ledger account numbers and check marks as needed in the journals. (Actual posting to ledger accounts is not required.)