MERCHANDISING ACOUNTING Joe Blink opened Blink Corporations Merchandising business on October 1. It authorized 800,000 share at $5 par value 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 1. Issued 480,000 shares of $5 par value common stock for $45 per share. 1. Paid three months rent on a lease rental contract, $3,800. 1. Oct. Issued 10,500 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 $9,200 under credit terms of 1/15, n/30, FOB shipping point, invoice dated October 1. Sold merchandise that cost $900 to Rivera Co. for $1,850 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated October 1. 1. and received Issued a 4-year, $70,500, zero-interest-bearing note to Reid Company cash of $71,776. 2. 2 Paid $225 cash for freight charges on the purchase of October 1. 3. Accept a note to replace its existing $1,800 account receivable to 60-day, 10% Rivera Co on Octoberl. 4. Established a petty cash fund in the amount of $28o. 5. Paid the premiums on property and casualty insurance policies, $3,900. 6. Purchased used truck for $8,000, paying $3,000 cash and the balance 7. Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, Fob on account. shipping point, invoice dated October 7. The merchandise had cost $700 Issued 28,000 shares of $5 par value stock for land valued at $380,000. Purchased merchandise form Light Co. for $3,700 under credit terms of 2/15, n/60, FOB destination, invoice dated October 9. 8. 9. Received a $200 credit memorandum form Light Co. for the return of part of the merchandise purchased on October 9. Received the balance due from Creek Co. for the invoice dated October 7, net of the discount. 9 9. 10. Paid cash for a newspaper advertisement, $490 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 L.O.U. from employees 25 50 17 36 petty cash fund was replenished. The balance in the fund was $14. 12. Paid Office station Co. For part of the debt incurred on October 1, 51,000 14. weekly payroll of $3,000 entirely subject to F.LCA and Medicare (7.65%). with The incotax withholding of $1,420 and union dues of $99 deducted. Journal entry to record salaries and wages paid FOB shipping point, invoice dated October 15 October 15. The merchandise had cost $120 15. Sold merchandise that cos $600 to art co. for $1200 under credit terms of 2/15, r/6. 16.Issued a $300 credit memorandum to Art Co. fo r an allowance on goods sold on 16 Paid Light Co. the balance due after deducting the discount. 17 Sold merchandise that cost $970 to customers for $1,800 cash under FOB shipping point, Sales are subject to a 11.5 % sales tax. 17. Paid cash for supplies, $350. 17 Purchased land and building for $390,000 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 $870 to customers for $1,500 cash ,under FOB shipping point, Sales are subject to a 11.5 % sales tax