Question

Please fill out the charts below with the given information.

The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers. Also note that the company uses a clearing house to take care of all bank as well as non-bank credit cards used by its customers.

Record on page 10 of the journal

Mar.      2              Sold merchandise on account to Equinox Co., $18,900, terms FOB destination, 1/10, n/30. The cost of the merchandise sold was $13,300.

3              Sold merchandise for $11,350 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $7,000.

4              Sold merchandise on account to Empire Co., $55,400, terms FOB shipping point, n/eom. The cost of merchandise sold was $33,200.

5              Sold merchandise for $30,000 plus 6% sales tax to retail customers who used MasterCard. The cost of merchandise sold was $19,400.

12           Received check for amount due from Equinox Co. for sale on March 2.

14           Sold merchandise to customers who used American Express cards, $13,700. The cost of merchandise sold was $8,350.

16           Sold merchandise on account to Targhee Co., $27,500, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $16,000.

18           Issued credit memo for $4,800 to Targhee Co. for merchandise returned from sale on March 16. The cost of the merchandise returned was $2,900.

Record on page 11 of the journal

Mar.      19           Sold merchandise on account to Vista Co., $8,250, terms FOB shipping point, 2/10, n/30. The cost of merchandise sold was $5,000. In addition, Amsterdam Supply Co. immediately paid $75 in freight charges and added this to the invoice sent.

26           Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18.

28           Received check for amount due from Vista Co. for sale of March 19.

31           Received check for amount due from Empire Co. for sale of March 4.

31           Paid Fleetwood Delivery Service $5,600 for merchandise delivered during March to customers under shipping terms of FOB destination.

Apr.       3              Paid City Bank $940 for service fees for handling MasterCard and American Express sales during March.

15           Paid $6,544 to state sales tax division for taxes owed on sales.

Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS
Amsterdam Supply Co.
General Ledger
ASSETS 110 Cash 121 Accounts Receivable-Empire Co. 122 Accounts Receivable-Equinox Co. 123 Accounts Receivable-Targhee Co. 124 Accounts Receivable-Vista Co. 125 Notes Receivable 130 Merchandise Inventory 131 Estimated Returns Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment   LIABILITIES 210 Accounts Payable 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 221 Notes Payable   EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary	REVENUE 410 Sales 610 Interest Revenue   EXPENSES 510 Cost of Merchandise Sold 521 Delivery Expense 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 526 Salaries Expense 531 Rent Expense 533 Insurance Expense 534 Store Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 539 Miscellaneous Expense 710 Interest Expense

Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles. Scroll down for page 11 of the journal.

Answer 1

Concepts and reason

Merchandise inventory: Merchandise inventory is the inventory that will not processed further to sell the same. It is reported in the current assets section of the balance sheet. Merchandising company is the company which deals with the merchandise inventory.

Transactions: Transactions are the events that happen in a business for a particular period. These transactions form base for the accounting. These transactions are recorded in the books of accounts which help to prepare the ledger accounts.

Accounting cycle: Accounting cycle is a process whereby the financial statements are prepared for a particular period. Adjusted trial balance forms base for the preparation of financial statements. It involves the following steps:

Step-1: Calculate the beginning account balances.

Step-2: Analyze the transactions and then journalize them.

Step-3: Post the journal entries to respective accounts.

Step-4: Unadjusted trial balance need to prepared, by computing the unadjusted balance in the account.

Step-5: Prepare worksheet.

Step-6: Adjusting entries need to journalized and posted.

Step-7: Prepare the adjusted trial balance.

Step-8: Prepare the financial statements.

Step-9: Closing entries need to journalized and posted.

Step-10: Prepare the post-closing trial balance.

Fundamentals

Journal entries: The transactions of an organization are recorded in the books of accounts through journal entries. The analyzation and journalizing of transactions is the second step in the accounting cycle. These journal entries are used to post the transactions into ledger.

Record the transaction of sale of merchandise on account to Eq Co. as shown below:

Record the transaction of cost of merchandise sold on account to Eq Co. as shown below:

Record the transaction of merchandise sold to retail cash customers as shown below:

Record the transaction of cost of merchandise sold on account as shown below:

Record the transaction of sale of merchandise on account to Em Co. as shown below:

Record the transaction of cost of merchandise sold on account to Em Co. as shown below:

Record the transaction of merchandise sold to retail customers who use Master Card as shown below:

Record the transaction of cost of merchandise sold using Master card as shown below:

Record the transaction of the receipt of check from the Eq Co. as shown below:

Record the transaction of sale of merchandise to customers who used American Express cards as shown below:

Record the transaction of cost of merchandise sold using American Express cards as shown below:

Record the transaction of sale of merchandise on account to T Co. as shown below:

Record the transaction of cost of merchandise sold on account to T Co. as shown below:

Record the transaction of issuance of credit memo to T Co. as shown below:

Record the transaction for the cost of merchandise returned which was sold to T Co. as shown below:

Record the transaction of sale of merchandise on account to V Co. as shown below:

Record the transaction of cost of merchandise sold on account to V Co. as shown below:

Record the transaction of payment of freight charges paid by A S Co. on behalf of the V Co. as shown below:

Record the transaction of the receipt of check from the T Co. as shown below:

Record the transaction of the receipt of check from the V Co. as shown below:

Record the transaction of receipt of check from Em Co. as shown below:

Record the transaction of the payment for merchandise delivered during the month of March as shown below:

Record the transaction of the payment made to Bank for service fees for handling Master card and American Express sales during the month of March as shown below:

Record the transaction of payment to state sales tax division as shown below:

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