The chart of accounts of Emley Company includes the following selected accounts. 112 Accounts Receivable .......401 Sales

Question:

The chart of accounts of Emley Company includes the following selected accounts.

112 Accounts Receivable .......401 Sales

120 Merchandise Inventory .......412 Sales Returns and Allowances

126 Supplies .............505 Cost of Goods Sold

157 Equipment ............610 Advertising Expense

201 Accounts Payable

In May the following selected transactions were completed. All purchases and sales were on account except as indicated. The cost of all merchandise sold was 65% of the sales price.

May 2 Purchased merchandise from Younger Company $7,500.

3 Received freight bill from Ruden Freight on Younger purchase $360.

5 Made sales to Ellie Company $1,980, DeShazer Bros. $2,700, and Liu Company $1,500.

8 Purchased merchandise from Utley Company $8,000 and Zeider Company $8,700.

10 Received credit on merchandise returned to Zeider Company $500.

15 Purchased supplies from Rodriquez Supply $900.

16 Purchased merchandise from Younger Company $4,500, and Utley Company $7,200.

17 Returned supplies to Rodriquez Supply, receiving credit $100.

18 Received freight bills on May 16 purchases from Ruden Freight $500.

20 Returned merchandise to Younger Company receiving credit $300.

23 Made sales to DeShazer Bros. $2,400 and to Liu Company $3,600.

25 Received bill for advertising from Amster Advertising $900.

26 Granted allowance to Liu Company for merchandise damaged in shipment $200.

28 Purchased equipment from Rodriquez Supply $500.

Instructions

(a) Journalize the transactions above in a purchases journal, a sales journal, and a general journal. The purchases journal should have the following column headings: Date, Account Credited (Debited), Ref., Accounts Payable Cr., Merchandise Inventory Dr., and Other Accounts Dr.

(b) Post to both the general and subsidiary ledger accounts. (Assume that all accounts have zero beginning balances.)

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