MERCHANDISING ACOUNTING Joe Blink opened Blink Corporations Merchandising business on October 1. Blink applies the perpetual inventory system. Blink provides a 2-year warranty with one of its products which was first sold in October Prepare journal entries to record the following merchandising transactions Oct. 1. Issued 480,000 shares of $5 par value common stock for $35 per share. 1. Paid three months' rent on a lease rental contract, $5,800. 1. Issued 12,500 shares of common stock to attorneys in payment of their bill of $70,000 for services rendered in helping the company organize. 1 Purchased office equipment on account from Office Station Co. $8,000. 1. Purchased merchandise form Boden Company for $6,200 under credit terms of 1/15, n/30, FOB shipping point, invoice dated October 1. 1. Sold merchandise that cost $800 to Rivera Co. for $1,800 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated October 1. 2. Issued a 4-year, $70,000, zero-interest-bearing note to Reld Company and received cash of $71,776. 2 Paid $225 cash for freight charges on the purchase of October 1. 3. Accept a 60 day, 10% note to replace its existing $1,800 account receivable to Rivera Co on Octoberl. 4. Established a petty cash fund in the amount of $240. 5. Paid the premiums on property and casualty insurance policies, $3,400. 6. Purchased used truck for $8,000, paying $3.000 cash and the balance on account. 7. Sold merchandise to Creek Co. for $900 under credit terms of 2/10, 1/60, Fob shipping point, invoice dated October 7. The merchandise had cost $600, 8. Issued 28,000 shares of $5 par value stock for land valued at $380,000. 9. Purchased merchandise form Light Co. for $3,200 under credit terms of 2/15, n/60,- FOB destination, invoice dated October 9. 9. Received a $200 credit memorandum form Light Co. for the return of part of the merchandise purchased on October 9. 9. Received the balance due from Creek Co. for the invoice dated October 7, net of the discount. 10. Paid cash for a newspaper advertisement, $400. 11. A summary of the petty cash expenditures made by petty cash custodian is as follows: Delivery charges on merchandise purchased $60 Supplies purchased and used Postage expense 1.O.U. from employees Miscellaneous expense The petty cash fund was replenished. The balance in the fund was $10. 12. Paid Office station Co. For part of the debt incurred on October 1, $1.000. 14. Weekly payroll of $3,000 entirely subject to F.I.C.A. and Medicare (7.65%), with incotax withholding of $1,420 and union dues of $99 deducted. Journal entry to record salaries and wages paid 15. Sold merchandise that cost $800 to art Co. For $1200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated October 15. 16.Issued a $200 credit memorandum to Art Co. for an allowance on goods sold on October 15. The merchandise had cost $120. 16 Paid Light Co. the balance due after deducting the discount. 17 Sold merchandise that cost $900 to customers for $1,800 cash,under FOB shipping point. Sales are subject to a 11.5% sales tax. 17. Paid cash for supplies, $750. 17 Purchased land and building for $300,000 cash. The appraised values are building. $122,500, and land, $77,500. 24. Received the balance due from Art Co. For the invoice dated October 15, net of discount. 25. Sold merchandise that cost $800 to customers for $1,500 cash ,under FOB shipping point. Sales are subject to a 11.5 % sales tax. 26. Asked Client, to accept a 60-day, 15% note to replace its existing $7,000 account payable to Office Station. 26.Issued a $150,000, 4-year, 12% note at face value to Forest Hills Bank and received $150,000 cash. The note requires annual interest payments each December 31. 27. Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated October 27. 27.Paid part-time receptionist for two weeks 'salary, $1,000. 27 The petty cash fund was decrease to $300. 28.Issues bonds, that pay interest annually on december 31. The bonds have a $130,000 par value, the annual contract rate is 12%, and the bonds mature in 15 years. Market rate at the date of issuance is 12%. 28. Issued 160,000 shares of $ 3 par value stock for land valued at $350,000. 28.Paid cash for fill and clearing land $7,500. 28.Paid cash for insurance during office equipment transit $500. 28.Paid cash for Delinquent real estate taxes on land assumed $3,000. 31. Weekly payroll of $3,000 entirely subject to F.I.C.A. and Medicare (7.65%), federal (0.8%) and state (4%) unemployment taxes. Record Employer payroll taxes. Required: 1. Journalize each transaction in a two-column journal. 2. Post the journal to a ledger. 4. Prepare an unadjusted trial balance.. 5. At the end of October, the following adjustment data were assembled. Analyze and use these data to complete the adjustments: a. Insurance expired during October is $250. b. Supplies on hand on October 31 are $700. c. Depreciation of office equipment for October is straight line method. The useful life is 5 years and the salvage value is $ 500. d. Merchandise ending inventory is $ 1,500 by FIFO method. e. Accrued receptionist salary on October 31 is $250. 6.Journalize,post the adjusting entries and prepare the adjusted trial balance. 8. Prepare an Income Statement, a statement of Retained Earning. Balance Sheet