Question

DATE TRANSACTIONS 2016 Jan. 1 William Evans started Evans Distributors with an investment of $49,000. He also invested personal business supplies worth $1,000. Purchased merchandise for cash, $10,500, Check 100. Sold merchandise on account to Chu Corporation, $750, terms 2/10, 1/30, Invoice 1001. Purchased merchandise on account from Whitson Company, $1,800, terms 1/10, n/30, Invoice 1125. Received and paid freight charges related to January 4 purchase of merchandise from Whiton Company, $100, Check 101. Chu Corporation returned merchandise purchased on January 2, issued credit memo #101 for $100. Received payment in full from Chu Corporation. Paid amount due to Whitson Company for purchase of January 4, Check 102. Recorded cash sales for the two-week period ended Jan. 15 of $5,750. Recorded sales on credit cards for the two-week period ended Jan. 15, $1,200; the bank charges a 3% fee on all credit card sales. Paid wages, $1,400, Check 103. Purchased equipment (not for resale), $1,750, Check 104. Paid freight for delivery of equipment purchased on January 16, $250, Check 105. (Note: freight charges for purchase of equipment should be debited to the Equipment account.) Purchased merchandise on account from Terri Manufacturing for $4,500, subject to trade dis- count of 40%, terms 1/10, 1/30, Invoice 2078. Sold merchandise on account to Moloney Corp., $2,500, terms 1/10, 1/30, Invoice 1002. Purchased merchandise on account from Schmidt Company, $3,000 terms 1/10, 1/30, Invoice 3204; freight prepaid by Schmidt Company and added to invoke, $70. (Total invoice amount, $3,070). Paid amount owed to Terri Manufacturing for purchase of January 18, Check 106. Received amount due from Moloney Corp. for the sale of January 20. Paid amount due to Schmidt Company for purchase of January 21, Check 107. Recorded cash sales for the period from January 16–31, $6,200. Recorded sales on the credit cards for the period from January 16–31, $2,200, the bank charges a 3% fee on all credit card sales.

Were using the Purchases accounts for this problem, so no merchandise inventory account. Need the journal entries.

Answer 1

Journal Entries:

Date	Account Titles and Explanation	Debit	Credit
Jan. 1, 2016	Cash	$49,000
	Supplies	$1,000
	Common Stock		$50,000
	(To record the amount invested into the business along with supplies)
Jan. 2, 2016	Purchases	$10,500
	Cash		$10,500
	(To record the purchase of merchandise inventory by cash)
Jan. 3, 2016	Accounts Receivable - Chu Corporation	$750
	Sales Revenue		$750
	(To record the sale of merchandise on account)
Jan. 4, 2016	Purchases	$1,800
	Accounts Payable - Whitson Company		$1,800
	(To record the purchase of merchandise inventory on account)
Jan. 5, 2016	Freight Expenses	$100
	Cash		$100
	(To record the payment of freight charges)
Jan. 10, 2016	Sales Returns and Allowances	$100
	Accounts Receivable - Chu Corporation		$100
	(To record the return of merchandise that was sold to Chu Corporation)
Jan. 11, 2016	Cash	$650
	Accounts Receivable - Chu Corporation ($750 - $100)		$650
	(To record the collection of amount from credit sales)
Jan. 13, 2016	Accounts Payable - Whitson Company	$1,800
	Cash		$1,800
	(To record the payment made to credit purchases)
Jan. 15, 2016	Cash	$5,750
	Sales Revenue		$5,750
	(To record the cash sales)
Jan. 15, 2016	Accounts Receivable	$1,200
	Bank Charges ($1,200*3/100)	$36
	Sales Revenue		$1,236
	(To record the sales made on credit card)
Jan. 16, 2016	Equipment	$1,750
	Cash		$1,750
	(To record the purchase of equipment on account)
Jan. 17, 2016	Equipment	$250
	Cash		$250
	(To record the payment of freight charges)
Jan. 18, 2016	Purchases	$4,500
	Accounts Payable - Terri Manufacturing		$4,500
	(To record the purchase of merchanise inventory on account)
Jan. 20, 2016	Accounts Receivable - Moloney Corp.	$2,500
	Sales Revenue		$2,500
	(To record the sales made on account)
Jan. 21, 2016	Purchases	$3,000
	Freight Expenses	$70
	Accounts Payable - Schmidt Company		$3,070
	(To record the purchase of inventory on account)
Jan. 27, 2016	Accounts Payable - Terri Manufacturing	$4,500
	Cash		$4,500
	(To record the payment made to credit purchases)
Jan. 29, 2016	Cash	$2,500
	Accounts Receivable - Moloney		$2,500
	(To record the amount received from credit sales)
Jan. 30, 2016	Accounts Payable - Schmidt Company	$3,070
	Cash		$3,070
	(To record the payment made to credit purchases)
Jan. 31, 2016	Cash	$6,200
	Sales Revenue		$6,200
	(To record the cash sales)
Jan. 31, 2016	Accounts Receivable	$2,200
	Bank Charges ($2,200*3/100)	$66
	Sales Revenue		$2,266
	(To record the sales made on credit card)