Question
ABC Merchandise Sales completed the following transactions during the month of March ( terms of all sales on credit are 2/10, n30 ): March 2:
ABC Merchandise Sales completed the following transactions during the month of March (terms of all sales on credit are 2/10, n30):
March 2: Purchased merchandise inventory on credit from Johnson Industries, $57,200.
Invoice dated March 2, terms 2/10, n30.
March 3: Received a credit memo from Johnson Industries for unsatisfactory merchandise inventory purchased on March 2 and returned for credit, $700.
March 4: Sold merchandise inventory on credit to Farmers Supply, invoice #100,
$16,850 (cost of goods sold, $7,580).
March 7: Sold merchandise inventory on credit to The Country Store for $9,300; invoice #101 (cost of goods sold, $4,770).
March 10: Borrowed $25,000 cash by signing a long-term note payable with a local bank.
March 12: Issued cheque #302 to Johnson Industries in payment of the balance regarding the
March 2nd invoice, less the return of March 3rd.
March 17: Received payment from The Country Store regarding the sale of March 7.
March 18: Purchased store equipment on credit from Furnishing Inc. at a cost of $ 8,600, invoice dated March 15, terms n/30.
March 20: Sold merchandise inventory on credit to Miracle Mart for $17,365; invoice #102.
(cost of goods sold, $7,815).
March 22: Purchased merchandise inventory on credit from Smith Company, $41,370.
Invoice dated March 18, terms 2/10, n/30.
March 24: Sold merchandise inventory on credit to The Country Store for $4,300; invoice #103 (cost of goods sold, $ 1,935).
March 26: Miracle Mart returned defective merchandise purchased on credit on March 20 for $375. The merchandise was not returned to inventory.
March 30: Received payment from Farmers Supply regarding the sale of March 4.
March 31: Cash sales for the month of March were $12,300; cost of goods sold was $5,530.
March 31: Issued cheque # 303 to Payroll Bank to cover the payroll for March, $ 14,250.00.
Required
- Prepare journal entries to record the transactions for March in the appropriate Special Journal, or in the General Journal in cases where a Special Journal does not apply. (33)
- Post your Journal Entries to the Accounts Receivable and Accounts Payable Sub ledgers. (12)
- Post the special journal totals as wells as the general journal entries to the Accounts Receivable and Accounts Payable Control Accounts. (6)
Prove the accuracy of the subsidiary ledgers. Prepare a Schedule of Accounts Receivable and a Schedule of Accounts Payable as at March 31, 2019.
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