Question

Recording transactions—sales journal

Feb. 1 Sold merchandise inventory on account, terms n/30, to Cole Co., \(1,050.

Cost of goods, \)860. Invoice no. 401.

6 Sold merchandise inventory for cash, \(950 (cost, \)750).

12 Collected interest revenue of \(170.

15 Received cash from Cole Co. in full settlement of its account receivable.

20 Sold merchandise inventory on account, terms n/30, to Dump Co.,

Issuing invoice no. 402 for \)500 (cost, \(325).

22 Sold merchandise inventory for cash, \)600 (cost \(530).

26 Sold office supplies to an employee for cash of \)150.

28 Received $500 from Dump Co. in full settlement of its account

receivable.

Requirements

1. Prepare headings for a sales journal. Journalize the transactions that should be recorded in the sales journal. Assume the company uses the perpetual inventory system.

2. Total each column of the sales journal.

Short answer

Total Accounts receivables =$1,550

Total Cost of goods sold = $1,185

Step-by-step solution

Sales Journal Headings

				Sales journal
Date	Invoice No.	Customer Account Debited	Post. Ref.	Accounts Receivables Dr Sales Revenue Cr	Cost of Goods Sold Dr. Merchandise Inventory Cr.

Journal Entries relating to sales journal

Date	Description	Debit	Credit
Feb 1	Accounts Receivables Dr.	$ 1,050
	Sales revenue		$ 1,050
	Being sales made on account
Feb 1	Cost of goods sold	860
	Merchandise Inventory		860
	Being cost of goods recorded for sales
Feb 20	Accounts Receivables	500
	Sales revenue		500
	Being sales made on account
Feb 20	Cost of goods sold	325
	Merchandise Inventory		325
	Being cost of goods recorded for sales

Total of sales journal

				Sales Journal
Date	Invoice No.	Customer Account Debited	Post. Ref.	Accounts Receivables Dr Sales Revenue Cr	Cost of Goods Sold Dr. Merchandise Inventory Cr.
Feb 1	401	Cole Co.		$ 1,050	$ 860
Feb 20	402	Dumb Co.		500	325
Feb 28		Total		$ 1,550	1,185