Question

Problem 7-04A Selected accounts from the chart of accounts of Blossom Company are shown below. 101 Cash 401 Sales Revenue 112 Accounts Receivable 412 Sales Returns and Allowances 120 Inventory 414 Sales Discounts 126 Supplies 505 Cost of Goods Sold 157 Equipment 726 Salaries and Wages Expense 201 Accounts Payable The cost of all merchandise sold was 60% of the sales price. During January, Blossom completed the following transactions. Jan. 3 Purchased merchandise on account from Gallagher Co. $9,000. 4 Purchased supplies for cash $60. 4 Sold merchandise on account to Wheeler $5,000, invoice no. 371, terms 1/10, n/30. 5 Returned $200 worth of damaged goods purchased on account from Gallagher Co. on January 3. 6 Made cash sales for the week totaling $3,000. 8 Purchased merchandise on account from Phegley Co. $4,000. 9 Sold merchandise on account to Linton Corp. $5,000, invoice no. 372, terms 1/10, n/30. 11 Purchased merchandise on account from Cora Co. $3,500. 13 Paid in full Gallagher Co. on account less a 2% discount. 13 Made cash sales for the week totaling $5,000. 15 Received payment from Linton Corp. for invoice no. 372. 15 Paid semi-monthly salaries of $13,000 to employees. 17 Received payment from Wheeler for invoice no. 371. 17 Sold merchandise on account to Delaney Co. $1,000, invoice no. 373, terms 1/10, n/30. 19 Purchased equipment on account from Dozier Corp. $5,000. 20 Cash sales for the week totaled $2,500. 20 Paid in full Phegley Co. on account less a 2% discount. 23 Purchased merchandise on account from Gallagher Co. $7,000. 24 Purchased merchandise on account from Atchison Corp. $4,500. 27 Made cash sales for the week totaling $4,000. 30 Received payment from Delaney Co. for invoice no. 373. 31 Paid semi-monthly salaries of $12,000 to employees. 31 Sold merchandise on account to Wheeler $9,000, invoice no. 374, terms 1/10, n/30. Mercer Company uses the following journals. 1. Sales journal. 2. Single-column purchases journal. 3. Cash receipts journal. 4. Cash payments journal. 5. General journal. Using the selected accounts provided:

Please try to keep the same format!

Answer 1

Recording of the given journal entries in the different ledgers are shown as follows:-

1) Sales journal is shown as follows:- (Amounts in $)

Sales Journal
Date	Account Debited	Invoice No.	Ref.	Accounts Receivable Dr. Sales Revenue Cr.	Cost of goods sold Dr. Inventory Cr.
Jan 4	Wheeler	371		5,000	3,000 (5,000*60%)
Jan 9	Linton Corp.	372		5,000	3,000 (5,000*60%)
Jan 17	Delaney Co.	373		1,000	600 (1,000*60%)
Jan 31	Wheeler	374		9,000	5,400 (9,000*60%)
	Total			20,000	12,000

2) Single column purchases journal is shown as follows:- (Amounts in $)

Purchases Journal
Date	Account Credited	Ref.	Inventory Dr. Accounts Payable Cr.
Jan 3	Gallagher Co.		9,000
Jan 8	Phegley Co.		4,000
Jan 11	Cora Co.		3,500
Jan 23	Gallagher Co.		7,000
Jan 24	Atchison Corp.		4,500
Total			28,000

3) Cash receipts journal is shown as follows:- (Amounts in $)

Cash Receipt Journal
Date	Account Credited	Ref.	Cash Dr.	Sales Discount Dr.	Accounts Receivable Cr.	Sales Revenue Cr.	Other Accounts Cr.	Cost of goods sold Dr. Inventory Cr.
Jan 6			3,000			3,000		1,800 (60%*3,000)
Jan 13			5,000			5,000		3,000 (60%*5,000)
Jan 15	Linton Corp.		4,950 (5,000-50)	50 (5,000*1%)	5,000
Jan 17	Wheeler		5,000		5,000
Jan 20			2,500			2,500		1,500 (60%*2,500)
Jan 27			4,000			4,000		2,400 (60%*4,000)
Jan 30	Delaney Corp		1,000		1,000
Total			25,450	50	11,000	14,500		8,700

4) Cash payments journal is shown as follows:- (Amounts in $)

Cash Payments Journal
Date	Account Debited	Ref.	Other Accounts Dr.	Accounts Payable Dr.	Inventory Cr.	Cash Cr.
Jan 4	Supplies	126	60			60
Jan 13	Gallagher Co.			9,000	180 (9,000*2%)	8,820 (9,000-180)
Jan 15	Salaries and Wages expense	726	13,000			13,000
Jan 20	Phegley Co.			4,000	80 (4,000*2%)	3,920 (4,000-80)
Jan 31	Salaries and Wages expense	726	12,000			12,000
	Total		25,060	13,000	260	37,800

5) The entries which are not recorded under all of the above journals will be recorded in general journal (i.e Sales return entries etc).

The General Journal is shown as follows:- (Amounts in $)

Date	Account Titles and Explanations	Debit	Credit
Jan 5	Accounts Payable-Gallagher Co.	200
	Inventory		200
	(To record the purchase returns)
Jan 19	Equipment	5,000
	Accounts Payable		5,000
	(To record the purchase of Equipment)