MODULE 10 - MERCHANDISING OPERATIONS The units in Module 10, Units 26 through 33, describe the special accounting needs of merchandising businesses. These needs give rise to new asset, revenue, and expense accounts, special journals, and a different classification of costs ASSIGNMENT 26A - PERIODIC INVENTORY SYTSEM Problem 26A-1: Journalize and post purchase and sales transactions for a merchandising business using the periodic inventory system. Use the general journal and general ledger provided. Dallas Fish Importers is a wholesale merchandising business. Dallas uses the periodic inventory system. During the first few days of June, the business has the following transactions. Required: Part A: Journalize the transactions in the general journal. Part B: Post the journal entries to the general ledger. Note: Be sure to fill in the account numbers to which you posted in the Posting Reference column of the journal and the journal page number from which you transferred the amounts in the Posting Reference column of the accounts. Part C. Complete the trial balance to verify equality of postings (both totals should be $7,695). Transactions: June 1 Dallas purchases $7,000 worth of fish from the Red River Hatchery on account. The terms of the purchase are 3/10, 1/30. June 2 Dallas returns $500 worth of fish to Red River Hatchery for credit because these fish arrived with a disease June 3 Dallas sells $1,000 worth of fish to Comerstone Pet Store on account. The terms of the purchase are 1/10,n/30. Dallas receives $100 worth of fish returned for credit by Cornerstone Pet Store. June 5 Dallas receives payment from Cornerstone Pet Store. Cash received is $891: a $9 Dallas' cash sales for the week of June 5 amount to $6,000. June Dallas pays Red River in full, less the return and the 3% discount. The cash amount paid to Red River is $6,305; the discount is $195. June 4 discount was taken. June 6 7 Pages: 1 of 6 Words: 551 of 1220 MODULE 10 - MERCHANDISING OPERATIONS The units in Module 10. Units 28 through 33, describe the special accounting needs of merchandising businesses. These needs give rise to new asset, revenue, and expenso accounts, special journals, and a different classification of costs. Problem 26A-1 Part A: Journal Entries GENERAL JOURNAL Page 5 CREDIT REF DEBIT DATE XXX1 Jun. ACCOUNTS AND EXPLANATION Purchase and Sale Entries 1 Purchased fish on account from Red River $7,000; terms 3/10, 1/30 2 Returned diseased fish to Red River for $500 credit 3 Sold fish on account to Cornerstone $1,000; terms 1/10, 1/30 4 Comerstone returned fish for $100 credit chi Comerstone paid bill in full, less retum and 1% discount 6 Cash sales for week of June 6 7 Paid account to Red River in full, loss return and 3% discount Pages: 2 of 8 Words: 551 of 1220 e units in Module 10, Units 26 through 33, describe the special accounting needs of merchandising businesses. These need we rise to new asset, revenue, and expense accounts, special journals, and a different classification of costs. Problem 26A-1 (continued) Part B: Posting Journal Entries to General Ledger Cash Account No. 111 DR. OR CR BALANCE EXPLANATION REF DEBIT CREDIT DATE Apr. 5 6 Account Receivable-Comerstone Account No. 115 DR. OR CR BALANCE EXPLANATION REF DEBIT CREDIT DATE Apr. 3 4 5 Account Payable-Red River Account No. 211 DR. OR CR BALANCE EXPLANATION REF. DEBIT CREDIT DATE Apr. 2 Sales Account No. 411 DR OR CR BALANCE DATE Apr. EXPLANATION REF DEBIT CREDIT 3 B Sales Returns and Allowances Account No. 412 DR OR CR BALANCE DATE Apr. EXPLANATION REF DEBIT CREDIT 4 Sales Discount Account No. 413 DR OR CR BALANCE DATE Apr. EXPLANATION REF DEBIT CREDIT 5 Purchases DATE Apr. Account No. 511 DR OR CR BALANCE EXPLANATION REF DEBIT CREDIT Purchases Returns and Allowances DATE Apr EXPLANATION Account No. 512 DR. OR CR BALANCE REF. 2 DEBIT CREDIT Purchases Discounts DATE Apr. EXPLANATION Account No. 513 OR. OR CR BALANCE REF DEBIT CREDIT AaBbCcDdEe AaBbDEO AaBbCcDd AaBb CcDd Normal Body Text Heading 1 Heading 2 1.2. MODULE 10 - MERCHANDISING OPERATIONS The units in Module 10. Units 26 through 33, describe the special accounting needs of merchandising businesses. These needs give rise to new asset, revenue, and expense accounts, special journals, and a different classification of costs. Credit Balances Problem 26A-1 (continued) Part C: Trial Balance Account Titles Debt Balances Cash Accounts Receivable-Cornerstone Accounts Payable - Red River Sales Sales Returns and Allowances Sales Discount Purchases Purchases Retums and Allowances Purchases Discount Totals Note: Both trial balance totals should be $7,695