ACC 120

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ABC Company is a merchandising business. Below are the routing transactions for ABC Company for the month of December.

Dec 1 Paid rent for December, $7500.

Dec 3 Purchased merchandise from Goat Company for $8,000 under terms 1/15, n/30, FOB Shipping Point.

Dec 4 Paid $500 cash for freight charges on purchase of Dec 3.

Dec 5 Sold merchandise to Beaver company for $22,000 under credit terms 2/10, n/60, FOB Shipping Point. The merchandise had a cost of $9000.

Dec 6 Purchased merchandise from Duck Company for 28,000, under terms n/eom.

Dec 8 Received $22,400 on account from Warthog Company, no discount. This sale was made in November.

Dec 9 After negotiations with Goat Company concerning problems with the merchandise purchased on Dec 3, ABC Company received an credit memorandum from Goat Company granting an allowance of $3,000.

Dec 10 Paid part-time sales clerk for two weeks salary including the amount owed on December 1st, $3000.

Dec 11 Sold merchandise on account to Cow Company, terms 2/10, n/60, FOB destination, $20,000. The merchandise had a cost of $11,000.

Dec 12 Paid $750 cash for shipping charges related to the Dec 11 sale to Cow Company.

Dec 13 Paid the amount due to Goat Company for the Dec 3 purchase less the allowance granted.

Dec 15 Received balance due from Beaver Company for merchandise sold on Dec 5.

Dec 16 Cow company returned merchandise from the Dec 11 sale that had cost ABC Company $1500 and been sold for $6,000. The merchandise was restored to inventory.

Dec 21 Received amount due from Cow company for the Dec 11 sale less the sale return on Dec 16.

Dec 23 Paid advertising expense for ads running the last week of December, $1750.

Dec 24 Paid part-time sales clerk for two weeks' salary, $3000.

Dec 27 Purchased office supplies on account, $900.

Dec 31 Paid Duck Company amount due from the Dec 6 purchase.

At the end of December, the following adjustment data were assembled.

a.) After a physical count of inventory, it was determined that $127,200 of inventory exists at December 31.

b.) 1% of sales is expected to be refunded.

c.)Estimated Cost of Merchandise that will be returned in the next year is $7500

d.)Insurance Expired during the year, $2800.

e.)Office supplies on hand at Dec 31, $1250.

f.)Depreciation for December is $1100.

g.)Sales clerk earned $1500 of unpaid and unrecorded salary as of Dec 31.

Directions:

1.Journalize the routine transactions above on the Journal-December tab.