Question

5 4 Problem 5-2A (Part Level Submission) Vaughn Distributing Company plc completed the following merchandising transactions in the month of April. At the beginning of April, the ledger of Vaughn showed Cash of €9,490 and Share Capital-Ordinary of €9,490. Apr. Purchased merchandise on account from Walker Supply Co. €6,500, terms 2/10, 1/30. 2 Sold merchandise on account €5,600, FOB destination, terms 1/10, 1/30. The cost of the merchandise sold was €3,720. 5 Paid €270 freight on April 4 sale. 6 Received credit from Walker Supply Co. for merchandise returned €700. 11 Paid Walker Supply Co. in full, less discount. 13 Received collections in full, less discounts, from customers billed on April 4. 14 Purchased merchandise for cash €4,460. 16 Received refund from supplier for returned goods on cash purchase of April 14, €520. 18 Purchased merchandise from Benjamin Distributors €4,600, FOB shipping point, terms 4/10, n/30. 20 Paid freight on April 18 purchase €170. 23 Sold merchandise for cash €7,190. The merchandise sold had a cost of €5,320. 26 Purchased merchandise for cash €2,130. 27 Paid Benjamin Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise €82. The returned merchandise had a fair value of €38. 30 Sold merchandise on account €3,560, terms n/30. The cost of the merchandise sold was €2,450. Vaughn Distributing Company's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 311 Share Capital - Ordinary, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, No. 505 Cost of Goods Sold, and No. 644 Freight-Out. (a) Journalize the transactions using a perpetual inventory system. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Ref. Debit Credit >

Answer 1

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Answer (a) Ref. Debit (€) Credit (€) General Journal J1 Date Account Titles and Explanation Apr 2 Merchandise Inventory Accounts Payable 6,500 120 201 6,500 4 112 5,600 Accounts Receivable Sales 401 5,600 3,720 Cost of Goods Sold Merchandise Inventory 505 120 3,720 5 270 Freight-out Cash 644 101 270 6 700 Accounts Payable Merchandise Inventory 201 120 700 11 5,800 201 120 116 Accounts Payable (6,500-$700) Merchandise Inventory (5,800 X 2%) Cash (5,800 - 116) 101 5,684

13 Cash (5,600-56) Sales Discounts (5,600 X 1%) Accounts Receivable 101 414 112 5,544 56 5,600 14 4,460 Merchandise Inventory Cash 120 101 4,460 16 520 Cash Merchandise Inventory 101 120 520 18 4,600 Merchandise Inventory Accounts Payable 120 201 4,600 20 170 Merchandise Inventory Cash 120 101 170 23 7,190 Cash Sales 101 401 7,190 5,320 Cost of Goods Sold Merchandise Inventory 505 120 5,320

26 2,130 Merchandise Inventory Cash 120 101 2,130 27 4,600 201 120 184 Accounts Payable Merchandise Inventory (4,600 X 4%) Cash 101 4,416 29 82 Sales Returns and Allowances Cash 412 101 82 38 Merchandise Inventory Cost of Goods Sold 120 505 38 30 3,560 Accounts Receivable Sales 112 401 3,560 2,450 Cost of Goods Sold Merchandise Inventory 505 120 2,450