The following were selected from among the transactions completed by Babcock Company during November of the current year: Nov. 3 Purchased merchandise on account from Moonlight Co., list price $85,000, trade discount 25%, terms FOB destination, 2/10, n/30. 4 Sold merchandise for cash, $37,680. The cost of the goods sold was $22,600. 5 Purchased merchandise on account from Papoose Creek Co., $47,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice. 6 Returned merchandise with an invoice amount of $13,500 ($18,000 list price less trade discount of 25%) purchased on November 3 from Moonlight Co. 8 Sold merchandise on account to Quinn Co., $15,600 with terms n/15. The cost of the goods sold was $9,400. 13 14 Paid Moonlight Co. on account for purchase of November 3, less return of November 6. Sold merchandise with a list price of $236,000 to customers who used VISA and who redeemed $8,000 of pointof-sale coupons. The cost of the goods sold was $140,000. Paid Papoose Creek Co. on account for purchase of November 5. 15 23 Received cash on account from sale of November 8 to Quinn Co. 24 Sold merchandise on account to Rabel Co., $56,900, terms n/30. The cost of the goods sold was $34,000. 28 Paid VISA service fee of $3,540. 30 Paid Quinn Co. a cash refund of $6,000 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,300. 30 During November, printed a coupon with each customer's sales receipt for $2 off the customer's next purchase of over $15. The coupons may be redeemed during December. Of the total of 20,000 coupons printed, it is estimated that 55% will be redeemed. Required: 1. Journalize the November transactions. 2. Assume that as of December 31, 10,400 of the $2-off coupons issued during November had been redeemed by customers. Journalize the entry for the remaining unredeemed coupons. Chart of Accounts CHART OF ACCOUNTS Babcock Company General Ledger ASSETS REVENUE 110 Cash 410 Sales 121 Accounts Receivable-Quinn Co. 610 Interest Revenue 122 Accounts Receivable-Rabel Co. 125 Notes Receivable EXPENSES 130 Inventory 510 Cost of Goods Sold 131 Estimated Returns Inventory 521 Delivery Expense 140 Office Supplies 141 Store Supplies 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 142 Prepaid Insurance 180 Land 526 Salaries Expense 180 Land 526 Salaries Expense 192 Store Equipment 531 Rent Expense 193 Accumulated Depreciation Store Equipment 533 Insurance Expense 194 Office Equipment 534 Store Supplies Expense 195 Accumulated Depreciation Office Equipment 535 Office Supplies Expense 536 Credit Card Expense LIABILITIES 539 Miscellaneous Expense 211 Accounts Payable-Moonlight Co. 710 Interest Expense 212 Accounts Payable-Papoose Creek Co. 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 220 Estimated Coupons Payable 221 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 1. Journalize the November transactions. General Journal Instructions PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 31 32 33 34 35 36 38 2. Assume that as of December 31, 10,400 of the $2-off coupons issued during November had been redeemed by customers. Journalize the entry for the remaining unredeemed coupons. General Journal Instructions PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1
