Question
Ace Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Ace showed Cash of
Ace Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Ace showed Cash of $5,000 and Owners Capital of $5,000.
May
1 - Purchased merchandise on account from Isdrio Wholesale Supply $4,100, terms 2/10, n/30.
2 - Sold merchandise on account $1,900, terms 1/10, n/30. The cost of the merchandise sold was $1,000.
5 - Received credit from Isdrio Wholesale Supply for merchandise returned $300.
9 - Received collections in full, less discounts, from customers billed on sales of $1,900 on May 2.
10 - Paid Isdrio Wholesale Supply in full, less discount.
11 - Purchased supplies for cash $350.
12 - Purchased merchandise for cash $1,400.
15 - Received refund for poor quality merchandise from supplier on cash purchase $200.
17 - Purchased merchandise from Chandler Distributors $1,300, FOB shipping point, terms 2/10, n/30.
19 - Paid freight on May 17 purchase $200.
24 - Sold merchandise for cash $3,100. The merchandise sold had a cost of $2,300.
25 - Purchased merchandise on account from Amado, Inc. $600, FOB destination, terms 2/10, n/30.
27 - Paid Chandler Distributors in full, less discount.
29 - Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $20.
31 - Sold merchandise on account $1,000, terms n/30. The cost of the merchandise sold was $600.
Ace Hardwares chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 Owners Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.
Journalize the transactions using a perpetual inventory system
| Date | Account Titles & Explanation | Debit | Credit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (To record credit sale) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (To record cost of merchandise sold) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (To record cash sale) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (To record cost of merchandise sold) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (To record merchandise returned) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (To record cost of merchandise returned) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (To record credit sale) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (To record cost of merchandise sold) |
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Accounting for Governmental and Nonprofit Entities
Authors: Jacqueline Reck, Suzanne Lowensohn, Earl Wilson
17th edition
78025826, 978-1259564239, 1259564231, 978-0078025822
