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Recording transactions in a general journal

Mar. 2 Sold merchandise inventory on account, terms n/30, to B. Kelp, issuing

invoice no. 501 for 1,000(cost,680).

6 Issued credit memo to B. Kelp for \(1,000 for merchandise returned to

thebusiness by the customer. Also accounted for receipt of the

merchandiseinventory at cost.

21 Purchased merchandise inventory on credit terms of 3/10, n/30 from

PondCo., \)600.

28 Returned damaged merchandise inventory to Pond Co., issuing a debit

memo for $600.

Journalize the above transactions that should be recorded in the general journal.If a transaction should not be recorded in the general journal, identify the specialjournal that should be used. Assume the company uses the perpetual inventorysystem.

Short Answer

Expert verified

Total of general journal amounts to$2,280.

Step by step solution

01

Transactions to be recorded in General Journal

Date

Particular

Debit

Credit

Mar. 6

Sales Return

$1,000

B. Kelp

$1,000

Being goods returned by the customer

6

Merchandise Inventory

680

Cost of goods sold

680

Being cost of inventory returned to pool

28

Pond Co.

600

Purchase Return

600

Being goods returned to the creditor

02

Transactions not to be recorded in General Journal

March 2โ€“ This transaction would not be recorded in the general journal. This is a sales transaction on account and would be recorded in the sales journal.

March 21โ€“ This transaction would also not be recorded in the general journal. This is related to purchase on account and would be reported in the purchase journal.

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Most popular questions from this chapter

Abby Perry recently opened her own law office on December 1, which she operates as a corporation. The name of the new entity is Abby Perry, Attorney. Perry experienced the following events during the organizing phase of the new business and its first month of operation, December 2018. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business. Dec. 1 Sold personal investment in Nike stock, which she had owned for several years, receiving 30,000cash.2Depositedthe30,000 cash from the sale of the Nike stock in her personal bank account. 3 Deposited 89,000cashinanewbusinessbankaccounttitledAbbyPerry,Attorney.ThebusinessissuedcommonstocktoPerry.5Paid600 cash for ink cartridges for the printer. 7 Purchased computer for the law office, agreeing to pay the account, 8,000,withinthreemonths.9Received2,900 cash from customers for services rendered. 15 Received bill from The Lawyer for magazine subscription, 300.(UseMiscellaneousExpenseaccount.)23Finishedcourthearingsonbehalfofaclientandsubmittedabillforlegalservices,8,000, on account. 28 Paid bill from The Lawyer. 30 Paid utilities, 900.31Received2,800 cash from clients billed on Dec. 23. 31 Cash dividends of $3,000 were paid to stockholders. Requirements 1. Analyze the effects of the preceding events on the accounting equation of Abby Perry, Attorney. Use a format similar to Exhibit 1-6. 2. Prepare the following financial statements: a. Income statement. b. Statement of retained earnings. c. Balance sheet. d. Statement of cash flows.

Amos Sharp recently opened his own accounting firm on October 1, which he operates as a corporation. The name of the new entity is Amos Sharp, CPA. Sharp experienced the following events during the organizing phase of the new business and its first month of operations in 2018. Oct. 5 Sharp deposited 45,000inanewbusinessbankaccounttitledAmosSharp,CPA.ThebusinessissuedcommonstocktoSharp.6Paid300 cash for letterhead stationery for new office. 7 Purchased office furniture for the office on account, 6,500.10Consultedwithtaxclientandreceived3,300 for services rendered. 11 Paid utilities, 340.12Finishedtaxhearingsonbehalfofaclientandsubmittedabillforaccountingservices,16,000. 18 Paid office rent, 1,800.25ReceivedamountduefromclientthatwasbilledonOctober12.27PaidfullamountofAccountsPayablecreatedonOctober7.31Cashdividendsof3,800 were paid to stockholders. Requirements 1. Analyze the effects of the events on the accounting equation of Amos Sharp, CPA. Use a format similar to Exhibit 1-6. 2. Prepare the following financial statements: a. Income statement. b. Statement of retained earnings. c. Balance sheet

Polk Street Homes had the following cash transactions for the month ended July 31, 2018.

Cash receipts:

Collections from customers $ 25,000

Issued common stock 13,000

Cash payments:

Rent 500

Utilities 2,000

Salaries 1,500

Purchase of equipment 25,000

Payment of cash dividends 4,000

Cash balance, July 1, 2018 14,000

Cash balance, July 31, 2018 19,000

Prepare the statement of cash flows for Polk Street Homes for the month ended

July 31, 2018.

Preparing the statement of retained earnings Requirements 1. Prepare the statement of retained earnings for Wilson Towing Service for the month ending June 30, 2018. 2. What does the statement of retained earnings report?

Consider the following accounting terms and definitions, and match each term to the definition:

1. Accounting equation

2. Asset

3. Balance sheet

4. Expense

5. Income statement

6. Liability

7. Net income

8. Net loss

9. Revenue

10. Statement of cash flows

11. Statement of retained

earnings

a. An economic resource that is expected to be of benefit

in the future

b. Debts that are owed to creditors

c. Excess of total expenses over total revenues

d. Excess of total revenues over total expenses

e. The basic tool of accounting, stated as

Assets = Liabilities + Equity

f. Decreases in equity that occur in the course of selling

goods or services

g. Increases in equity that occur in the course of selling

goods or services

h. Reports on a businessโ€™s cash receipts and cash payments

during a period

i. Reports on an entityโ€™s assets, liabilities, and stockholdersโ€™

equity as of a specific date

j. Reports on an entityโ€™s revenues, expenses, and net

income or loss for the period

k. Reports how the companyโ€™s retained earnings balance

changed from the beginning to the end of the period

See all solutions

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