On March 1, Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $259,040, terms n/30. The cost of the merchandise sold is $152,710. Showcase Co. issues a credit memo on March 5 for $31,930 as a price adjustment prior to Balboa Co. paying the original invoice on March 29.
Journalize Showcase Co.s entries for (a) the sale, including the cost of the merchandise sold; (b) the credit memo; and (c) the receipt of the check for the amount due from Balboa Co. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
CHART OF ACCOUNTS |
Showcase Co. |
General Ledger |
| ASSETS | 110 | Cash | 121 | Accounts Receivable-Balboa Co. | 125 | Notes Receivable | 130 | Merchandise Inventory | 131 | Estimated Returns Inventory | 140 | Office Supplies | 141 | Store Supplies | 142 | Prepaid Insurance | 180 | Land | 192 | Store Equipment | 193 | Accumulated Depreciation-Store Equipment | 194 | Office Equipment | 195 | Accumulated Depreciation-Office Equipment | | LIABILITIES | 210 | Accounts Payable | 218 | Sales Tax Payable | 219 | Customer Refunds Payable | 220 | Unearned Rent | 221 | Notes Payable | | EQUITY | 310 | Owner, Capital | 311 | Owner, Drawing | | | REVENUE | 410 | Sales | 610 | Rent Revenue | | EXPENSES | 501 | Cost of Merchandise Sold | 521 | Delivery Expense | 522 | Advertising Expense | 524 | Depreciation Expense-Store Equipment | 525 | Depreciation Expense-Office Equipment | 531 | Rent Expense | 533 | Insurance Expense | 534 | Store Supplies Expense | 535 | Office Supplies Expense | 536 | Credit Card Expense | 539 | Miscellaneous Expense | 710 | Interest Expense | |