Problem 7-4A Selected accounts from the chart of accounts of Mercer Company are shown below 101 Cash 112 Accounts Receivable 412 Sales Returns and Allowances 120 Inventory 126 Supplies 157 Equipment 201 Accounts Payable 401 Sales Revenue 414 Sales Discounts 505 Cost of Goods Sold 726 Salaries and Wages Expense The cost of all merchandise sold was 60% of the sales price. During January, Mercer completed the following transactions Jan. 3 Purchased merchandise on account from Gallagher Co. $9,000 4 Purchased supplies for cash $80 4 Sold merchandise on account to Wheeler $5,250, invoice no. 371, terms 1/10, n/30 5 Returned $300 worth of damaged goods purchased on account from Gallagher Co.on January 3 6 Made cash sales for the week totaling $3,150 8 Purchased merchandise on account from Phegley Co. $4,500 9 Sold merchandise on account to Linton Corp. $5,400, invoice no. 372, terms 1/10, n/30 11 Purchased merchandise on account from Cora Co. $3,700 13 Paid in full Gallagher Co. on account less a 2% discount. 13 Made cash sales for the week totaling $6,260 15 Received payment from Linton Corp. for invoice no. 372 15 Paid semi-monthly salaries of $14,300 to employees. 17 Received payment from Wheeler for invoice no. 371 17 Sold merchandise on account to Delaney Co. $1,200, invoice no. 373, terms 1/10, n/30 19 Purchased equipment on account from Dozier Corp. $5,500 20 Cash sales for the week totaled $3,200 20 Paid in full Phegley Co. on account less a 2% discount. 23 Purchased merchandise on account from Gallagher Co. $7,800 24 Purchased merchandise on account from Atchison Corp. $5,100 27 Made cash sales for the week totaling $4,230 30 Received payment from Delaney Co. for invoice no. 373 31 Paid semi-monthly salaries of $13,200 to employees. 31 Sold merchandise on account to Wheeler $9,330, invoice no. 374, terms 1/10, n/30 Mercer Company uses the following journals 1. Sales journal 2. Single-column purchases journal. 3. Cash receipts journal 4. Cash payments journal 5. General journal Using the selected accounts provided Record and Post the January transactions in the appropriate journal noted. Foot and cross-foot all special journals. (Record entries in the order displayed in the problem statement.) Sales Journal S1 Accounts Receivable Dr. Sales Revenue Cr. Cost of Goods Sold Dr Inventory Cr Date Account Debited Invoice No. Ref. (112)(401) (505) 120) Purchases Journal P1 Inventory Dr Date Account Credited Ref. Accounts Payable Cr (120 201) General Journal Date Account Titles and Explanation Debit Credit Cash Receipts Journal CR1 Cost of Goods Sold Dr Inventory Cr Date Account Credited Ref. Cash Dr Sales Discounts Dr. Accounts Receivable Cr. Sales Revenue Cr. Other Accounts Cr (101) 414) (112) (401) (505)(120) Cash Payments Journal CP1 Date Account Debited Ref. Other Accounts Dr Accounts Payable Dr. Inventory Cr. Cash Cr 126 726 726 (201) (120) (101)
