Question
Mercury Company has the following opening account balances in its subsidiary ledgers on May 1 and uses the periodic inventory system. All ledger accounts have
Mercury Company has the following opening account balances in its subsidiary ledgers on May 1 and uses the periodic inventory system. All ledger accounts have normal debit and credit balances. The company completed the following transactions during the month. The cost of all merchandise sold was 64% of the sales price.
A/R Subsidiary Ledger Beginning Balances | A/P Subsidiary Ledger Beginning Balances | ||
Smith | 1,500 | Davidof | 9,000 |
Minnie | 7,500 | Rasputin | 20,000 |
Merkel | 4000 | Oklo | 13,000 |
1 Purchased merchandise on account from Little Company $12,000, Invoice no. 260, terms 2/10, n/30.
3 Sold merchandise on account to Soho $2,800, Invoice no. 520, and Danube $2,400, invoice no. 511.
5 Purchase merchandise on account from Bennet $5,000 and Gasby $4,700.
9 Issued credit of $300 to Danube for merchandise returned.
10 Purchased merchandise on account from Frankle Corp. $2,600.
13 Receive payment in full from Soho and Danube.
18 Purchased merchandise for cash $1,600.
21 Issued $20,000 note to Rasputin in payment of balance due.
21 Made cash sales for the week totaling $6,000.
22 Sold merchandise on account to Soho for $3,700, invoice no. 514, and to Smith for $800, invoice no. 515.
25 Purchased supplies on account from Francisco Co. $190.
25 Received payment from Soho for invoice no. 514 and from Smith for invoice no. 515.
25 Sold merchandise on account to Mestis Corp. $3,800, invoice no. 206, terms 2/10, n/30.
26 Purchased for cash a small parcel of land and a building on the land to use as a storage facility. The total cost of $26,000 was allocated $16,000 to the land and $10,000 to the building.
28 Paid $1,600 for employee salaries and wages.
30 Sold merchandise on account to Billys Co.$3,400, invoice no. 207, terms 2/10, n/30.
Instructions 2
a. Record the months transactions in the appropriate journalsales, purchases, cash receipts, cash payments, and general.
b. Post the journals to the general and subsidiary ledgers.
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