PROBLEM 3 ( 25 POINTS)

M and S Co. completed various transactions during the month of January. Journalize the entries for the following selected transactions:

Jan 1 Purchase merchandise on account from KLM Co., $4,500. Terms 2/15, n/30, FOB shipping-point. Transportation cost of $500 was paid by the seller and was added on their invoice.

Jan 10 Returned Merchandise to KLM Co. purchased on Jan 1, cost of merchandise returned, $300.

Jan 14 Paid KLM Co. within the discount period. (Less return and discount)

Jan 16 Sold merchandise on account to XYZ co., for $12,000. The cost of the merchandise sold was $6,000. Credit terms were 5/15 n/40

Jan 17 Sold merchandise to customers who used MasterCard and VISA, $10,000. The cost of the merchandise sold was $3,100.

Jan 25 Received payment from XYZ Co within the discount period.

Jan 27 Accepted a return of $1,000 worth of merchandise from cash customers. The cost of the merchandise returned was $500. The customers received a cash refund.

Jan 31 Paid service fee on VISA and MasterCard sales of $300.