GL0401 - Based on Problem 4-1A LO P1, P2 Prepare journal entries to record the following merchandising transactions of Hall's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable-Wilson.) Jul. 1 Purchased merchandise from Wilson Company for $8,80 under credit terms of 1/15, n/39, FOB shipping point, invoice dated July 1. Jul. 2 Sold merchandise to Lee Co. for $2,300 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $1,380. Jul. 3 Paid $685 cash for freight charges on the purchase of July 1. Jul. Sold merchandise that had cost $2,700 for $4,500 cash Jul. Purchased merchandise from King Co. for $3,600 under credit terms of 2/15, 1/60, FOB destination, invoice dated July 9 Jul. 11 Returned $700 of merchandise purchased on July 9 from King Co. and debited its account payable for that amount. Jul12 Received the balance due from Lee Co for the invoice dated July 2, net of the discount. Jul. 16 Paid the balance due to Wilson Company within the discount period Jul 19 Sold merchandise that cost $2,000 to Cabela co for $4.000 under credit terms of 2/15, /60 FOB shipping point invoice dated July 19. Jul. 21 Gave a price reduction (allowance) of $800 to Cabela Co. for merchandise sold on July 19 and credited Cabela's accounts receivable for that mount Jul 24 Paid King Co the balance due, net of discount. Jul 30 Received the balance due from Cabela co. for the invoice dated July 19. net of discount General Ledger Account Cash Accounts receivable - Lee Debit Credit Date Debit Credit Balance Date Balance Jul 01 Jul 03 27.500 26,815 Jul 02 2,300 2,300 Merchandise inventory Debit Credit Accounts payable - Wilson Debut Credit Date Date Balance Balance 12 000 MO 01 BRO 20 DO 101 8.800 8.800 110 19.420 03 685 20.105 Hall's Company Trial Balance July 31, 2019 Account Title Debit Credit Cash Accounts receivable - Lee Merchandise inventory Accounts payable - Wilson Common stock 26,815 2,300 20,105 Osales 39,500 2,300 cost of goods sold 1.380 50 600 $ 50.600 Dates: Jul 01 to: Jul 31 Hall's Company Schedule of Accounts Receivable Accounts receivable - Cabela Accounts receivable - Wilson Accounts receivable - Lee Accounts receivable - King 0 9,800 . . Total accounts receivable 9,800 Dates: Jul 01 to: Jul 31 Hairs Company Schedule of Accounts Payable Accounts payable - Cabela Accounts payable Wilson Accounts payable Lee Accounts payable King Total accounts payable Prepare a multiple-step income statement through the calculation of gross profit. Hall's Company Partial Income Statement For the Month Ended July 31, 2019 Impact on income Increase (decrease) to income No impact on income Increases net income $ 2,300 July 1) Purchased merchandise from Wilson Company for $8,800 under credit terms of 1/15, 1/30, FOB shipping point, invoice dated July 1. July 2) Sold merchandise to Lee Co. for $2,300 under credit terms of 2/10, 1/60, FOB shipping point, invoice dated July 2. July 2) The cost of the merchandise sold to Lee Co. was $1,380. July 3) Paid $685 cash for freight charges on the purchase of July 1 Decreases net income No impact on income July 8) Sold merchandise for $4,500 cash. Increases net income July 8) The cost of the merchandise sold was $2.700. Decreases net income July 9) Purchased merchandise from King Co. for $3,600 under credit terms of 2/15, n/60, FOB destination invoice dated July 9. July 11) Received a $700 credit memorandum from King Co. for the return of part of the merchandise purchased on July 9. July 9) Purchased merchandise from King Co. for $3,600 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9. July 11) Received a $700 credit memorandum from King Co. for the return of part of the merchandise purchased on July 9. July 12) Received the balance due from Lee Co. for the invoice dated July 2, net of the discount. July 16) Paid the balance due to Wilson Company within the discount period. July 19) Sold merchandise to Cabela Co. for $4,000 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19. July 19) The cost of the merchandise sold to Cabela Co. was $2,800. July 21) Issued a $800 credit memorandum to Cabela Co. for an allowance on goods sold on July 19. July 24) Paid King Co. the balance due, net of discount. July 30) Received the balance due from Cabela Co, for the invoice dated July 19, net of discount. July 31) Sold merchandise to Lee Co. for $9.800 under credit terms of 2/10, n/60. FOB shipping point, invoice July 19) The cost of the merchandise sold to Cabela Co. was $2.800. July 21) Issued a $800 credit memorandum to Cabela Co. for an allowance on goods sold on July 19. July 24) Paid King Co. the balance due, net of discount. July 30) Received the balance due from Cabela Co, for the invoice dated July 19, net of discount. July 31) Sold merchandise to Lee Co. for $9.800 under credit terms of 2/10, 1/60, FOB shipping point, invoice dated July 31 July 31) The cost of the merchandise sold to Lee Co. was $5,900. Total gross profit $ 2,300
