Accounting Principles I

Chapter 5 Journalizing Transactions for a Merchandising Company

Complete the following activity and save this file on your hard drive. Then submit your file to your instructor on Canvas.
Name:__

The Berry Merchandising Company had the following transactions for the month of January. Berrys cost of all merchandise sold was 65% of the sales price. Required: Journalize each transaction in a General Journal. Jan. 1 Purchased merchandise on account from Kimberly Supply Co., $3,900, terms 2/10, n/30. Jan. 4 Sold merchandise on account $5,000 to Able Inc., shipped FOB Destination, terms 1/10, n/30. Jan. 6 Paid $250 freight on January 1 purchase from Kimberly Supply. Jan. 7 Returned merchandise to Kimberly Supply that was defective and received a $400 credit. Jan. 8 Paid $350 freight on January 4th sale to Able. Jan. 10 Paid Kimberly Supply in full, less allowable discount. (Hint Remember the return of merchandise on January 7.) Jan. 12 Purchased merchandise for cash, $5,900. Jan. 13 Sold merchandise on account, $8,500, to Willow Company, terms 1/10, n/30 Jan. 14 Collected on account in full, less allowable discount, from Able Inc. sold on January 4th. Jan. 15 Merchandise sold to Willow Company was returned as defective. Issued a credit for $700. Jan. 17 Sold merchandise for cash, $4,500. Jan. 20 Made refund to cash customer for defective merchandise, $200. Jan. 28 Collected on account in full, less allowable discount, from Willow Company sold on January 13th. (Hint Remember the return of merchandise on January 15th.)

General Journal

Date Jan. 1

Account Titles and Explanation Inventory Accounts Payable

Debit 3900

Credit

3900

Jan. 4

Accounts Receivable Sales Revenue Cost of Goods Sold Inventory

5000 5000 3250 3250

Jan. 6

Inventory Cash

250 250

Jan. 7

Accounts Payable Inventory

400 400

Jan. 8

Freight Out Cash

350 350

Jan. 10

Accounts Payable Inventory Cash

3500 3430 70

Jan. 12

Inventory Cash

5900 5900 8500 8500 5525

Jan. 13

Accounts Receivable Sales Revenue Cost of Goods Sold

Inventory

5525

Jan. 14

Cash Sales Discount Accounts Receivable

4950 50 5000

Jan. 15

Sales Return and Allowances Accounts Receivable Inventory Cost of Goods Sold

700 700 455 455

Jan. 17

Cash Sales Revenue Cost of Goods Sold Inventory

4500 4500 2925 2925

Jan. 20

Sales Returns and Allowances Cash Inventory Cost of Goods Sold

200 200 130 130

Jan. 28

Cash Sales Discounts Accounts receivable

7800 0 7800