Question

Weygandt, Accounting Principles, 13e Help System Announcements - CALCULATOR PRINTER VERSION 4 BACK Problem 5-02A a-c (Video) Cullumber Hardware store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Cullumber showed Cash of $5,000 and Owner's Capital of $5,000. May 1 Purchased merchandise on account from Braun's Wholesale Supply $4,300, terms 2/10, 1/30. 2 Sold merchandise on account $1,800, terms 1/10, n/30. The cost of the merchandise sold was $1,600. 5 Received credit from Braun's Wholesale Supply for merchandise returned $300. 9 Received collections in full, less discounts, from customers billed on sales of $1,800 on May 2 10 Paid Braun's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $400. 12 Purchased merchandise for cash $1,300. 15 Received refund for poor quality merchandise from supplier on cash purchase $100. 17 Purchased merchandise from Valley Distributors $1,200, FOB shipping point, terms 2/10, 1/30. 19 Paid freight on May 17 purchase $200. 24 Sold merchandise for cash $2,800. The merchandise sold had a cost of $2,200. 25 Purchased merchandise on account from Lumley, Inc. $750, FOB destination, terms 2/10, 1/30. 27 Paid Valley Distributors in full, loss discount. 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $30. 31 Sold merchandise on account $1,500, terms 1/30. The cost of the merchandise sold was $500. Cullumber Hardware's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. Owner's Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold. Journalize the transactions using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Rec journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit ch ORIE 9 040 2124/2

Answer 1

Solutions:

IN the Books of Cullumber Hardware
Date	Account	Debit	Credit
May-01	Inventory	$4,300.00
	Accounts Payable		$4,300.00
May-02	Accounts Receivable	$1,800.00
	Sales		$1,800.00
May-02	Cost of Goods Sold	$1,600.00
	Inventory		$1,600.00
May-05	Accounts Payable	$300.00
	Inventory		$300.00
May-09	Cash	$1,782.00
	Sales Discount 1800*1%	$18.00
	Accounts Receivable		$1,800.00
May-10	Accounts Payable (4300-300)	$4,000.00
	Purchases Discounts ($4000*2%)		$80.00
	Cash ($4000-80)		$3,920.00
May-11	Supplies	$400.00
	Cash		$400.00
12-May	Inventory	$1,300.00
	Cash		$1,300.00
15-May	Cash	$100.00
	Inventory		$100.00
17-May	Cash	$1,200.00
	Accounts Payable		$1,200.00
19-May	Inventory	$200.00
	Cash		$200.00
24-May	Accounts Receivable	$2,800.00
	Sales		$2,800.00
	Cost of Goods Sold	$2,200.00
	Inventory		$2,200.00
May-25	Inventory	750
	Accounts Payable		750
27-May	Accounts Payable	$1,200.00
	Purchase Discount (1200*2%)		$24.00
	Cash (1200-24)		$1,176.00
29-May	Sales Returns and allowances	$70.00
	Cash		$70.00
	Inventory	$30.00
	Cost of Goods sold		$30.00
31-May	Accounts Receivable	$1,500.00
	Sales		$1,500.00
	Cost of Goods Sold	$500.00
	Inventory		$500.00