Question

Problem 5-02A - (Part Level Submission) (Video) Tamarisk, Inc. completed the following merchandising transactions in the month of May. At the beginning of May, the lediger of Tamaris showed Cash of $4,500 and Common Stock of $4,500 May 1 Purchased merchandise on account from Gray's Wholesale Supply $3,900, terms 2/10, 1/30 2 Sold merchandise on account $1.00, terms 1/10, 130. The cost of the merchandise sold was $1,300. 5 Received cred from Gray's Wholesale Supply for merchandise returned $250. 9 Received collections in full, less discounts, from customers billed on sales of $1,800 on May 2. 10 Paid Gray's Wholesale Supply in full less discount 11 Purchased sules for cash $300 12 Purchased merchandise for cash $1,400. 15 Received refund for poor quality merchandise from supplier on cash purchase $200 17 Purchased merchandise from Amand Distributors $1,300,FOB shipping point terms 2/10, 1/30 19 Paid freight on May 17 purchase $170. 24 Sold merchandise for cash $2,800. The merchandise sold had a cost of $2,100. 25 Purchased merchandise on account from Horvath, Inc. $600, FOB destination, terms 2/10, 130, 27 Paid Amand Distributors in fulles discount 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $20. 31 Sold merchandise on account $1,000, terms 130. The cost of the merchandise sold was $600, Tamarisk, Inc's chart of account includes the following: No. 101 C , No 112 Accounts Receivable No. 120 tvertory, No. 126 Supplies No. 201 Accounts Payable, No311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No SOS Cost of Goods Sold

Answer 1

Journal Entries:

Date	Account title and Explanation	Debit	Credit
May 1	Inventory	$3,900
	Accounts payable		$3,900
	[To record purchase of inventory on account]
May 2	Accounts receivable	$1,800
	Sales revenue		$1,800
	[To record credit sales]
	Cost of goods sold	$1,300
	Inventory		$1,300
	[To record cost of goods sold]
May 5	Accounts payable	$250
	Inventory		$250
	[To record purchase returns]
May 9	Cash	$1,782
	Sales discount [1800 x 1%]	$18
	Accounts receivable		$1,800
	[To record collections from customers]
May 10	Accounts payable [3,900 - 250]	$3,650
	Inventory [3,650 x 2%]		$73
	Cash		$3,577
	[To record cash paid for accounts payable]
May 11	Supplies	$300
	Cash		$300
	[To record purchase of supplies]
May 12	Inventory	$1,400
	Cash		$1,400
	[To record purchase of inventory]
May 15	Cash	$200
	Inventory		$200
	[To record purchase returns]
May 17	Inventory	$1,300
	Accounts payable		$1,300
	[To record purchase of merchandise on account]
May 19	Inventory	$170
	Cash		$170
	[To record payment of freight]
May 24	Cash	$2,800
	Sales revenue		$2,800
	[To record cash sales]
	Cost of goods sold	$2,100
	Inventory		$2,100
	[To record cost of goods sold]
May 25	Inventory	$600
	Accounts payable		$600
	[To record purchase of merchandise on account]
May 27	Accounts payable	$1,300
	Inventory [1300 x 2%]		$26
	Cash		$1,274
	[To record cash paid for accounts payable]
May 29	Sales returns and allowance	$70
	Cash		$70
	[To record sales returns]
	Inventory	$20
	Cost of goods sold		$20
	[To record cost of sales returns]
May 31	Accounts receivable	$1,000
	Sales revenue		$1,000
	[To record credit sales]
	Cost of goods sold	$600
	Inventory		$600
	[To record cost of goods sold]