Selected accounts from the chart of accounts of Litke Company are shown below. 101 Cash ...........201 Accounts

Question:

Selected accounts from the chart of accounts of Litke Company are shown below.

101 Cash ...........201 Accounts Payable

120 Merchandise 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 70% of the sales price. During October, Litke Company completed the following transactions.

Oct. 2 Purchased merchandise on account from Camacho Company $16,500.

4 Sold merchandise on account to Enos Co. $7,700. Invoice no. 204, terms 2/10, n/30.

5 Purchased supplies for cash $80.

7 Made cash sales for the week totaling $9,160.

9 Paid in full the amount owed Camacho Company less a 2% discount.

10 Purchased merchandise on account from Finn Corp. $3,500.

12 Received payment from Enos Co. for invoice no. 204.

13 Returned $210 worth of damaged goods purchased on account from Finn Corp. on October 10.

14 Made cash sales for the week totaling $8,180.

16 Sold a parcel of land for $27,000 cash, the land’s original cost.

17 Sold merchandise on account to G. Richter & Co. $5,350, invoice no. 205, terms 2/10, n/30.

18 Purchased merchandise for cash $2,125.

21 Made cash sales for the week totaling $8,200.

23 Paid in full the amount owed Finn Corp. for the goods kept (no discount).

25 Purchased supplies on account from Robinson Co. $260.

25 Sold merchandise on account to Hunt Corp. $5,220, invoice no. 206, terms 2/10, n/30.

25 Received payment from G. Richter & Co. 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 $35,000 was allocated $21,000 to the land and $14,000 to the building.

27 Purchased merchandise on account from Kudro Co. $8,500.

28 Made cash sales for the week totaling $7,540.

30 Purchased merchandise on account from Camacho Company $14,000.

30 Paid advertising bill for the month from the Gazette, $400.

30 Sold merchandise on account to G. Richter & Co. $4,600, invoice no. 207, terms 2/10, n/30.

Litke 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 Cr., Other Accounts Cr., and Cost of Goods Sold Dr./Merchandise Inventory Cr.

4. Cash payments journal with columns for Other Accounts Dr., Accounts Payable Dr.,

Merchandise 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.)

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