Question 1

Michelles Marvellous Mittens Limited, a retail business, commenced operations on January 1, 2019. Michelles Marvellous Mittens uses a perpetual inventory system and has chosen a December 31 year-end. Below are the transactions that took place during the month of December 2019:

Dec 1 Paid three months rent in advance in the amount of $2,250.

Dec 3 Received merchandise inventory and an invoice dated December 1, terms 2/10, n/60, from Natural Products in the amount of $2,790. Dec 3 Purchased on credit from Flintrock Suppliers, merchandise inventory, $19,650; store supplies, $340; and office supplies, $80; invoice dated December 3, terms n/10, EOM.

Dec 4 Sold merchandise on credit to Arcam Company, $6,500 (cost $3,900). The terms of all credit sales are 2/10, n/30. Dec 6 Received a $390 credit memorandum from Natural Products for defective merchandise received on December 3 and returned for credit.

Dec 6 Issued a $350 credit memorandum to Arcam Company for defective merchandise sold on December 4 and returned for credit (cost of the merchandise was $210). The goods were returned to inventory.

Dec 8 Sold store supplies at cost to the business next door for cash in the amount of $30.

Dec 9 Issued cheque #100 to Natural Products in payment of the balance owing.

Dec 13 Received payment of balance owing from Arcam Company. Dec 15 Issued cheque #101 in payment of the November telephone bill, in the amount of $150.

Dec 15 Issued cheque #102 in payment of the November utilities bill, in the amount of $225.

Dec 16 Issued cheque #103 to Flintrock Suppliers in payment of the balance owing.

Dec 18 Michelle Paquin, the owner of the business, used cheque #104 to withdraw $500 from the business for personal use.

Dec 20 The business borrowed $1,000 from the bank by signing a 90-day note, with interest @ 5%. Dec 31 Cash sales for the month of December were $8,500 (cost, $5,100).

(Question 1) prepare the journal entries to record ALL of the above transactions. Explanations are NOT required. (2) BELOW each journal entry, indicate which SPECIAL JOURNAL the transaction should have been journalized in (i.e. Cash Disbursements Journal, Cash Receipts Journal, Sales Journal, Purchase Journal, General Journal). You may use abbreviations for the journal names: CDJ, CRJ, SJ, PJ and GJ. (1 mark each)