Question

Journalize the following transactions that occurred in November 2018 for Julie’s Fun World. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Julie’s Fun World estimates sales returns at the end of each month.

Nov. 4 Purchased merchandise inventory on account from Vera Company, \(5,000. Terms 3/10, n/EOM, FOB shipping point.

6 Paid freight bill of \)100 on November 4 purchase

8 Returned half the inventory purchased on November 4 from Vera Company.

10 Sold merchandise inventory for cash, \(1,100. Cost of goods, \)400. FOB destination.

11 Sold merchandise inventory to Geary Corporation, \(11,100, on account, terms of 2/10, n/EOM. Cost of goods, \)6,105. FOB shipping point.

12 Paid freight bill of \(20 on November 10 sale.

13 Sold merchandise inventory to Caldwell Company, \)9,500, on account, terms of n/45. Cost of goods, \(5,225. FOB shipping point.

14 Paid the amount owed on account from November 4, less return and discount.

17 Received defective inventory as a sales return from the November 13 sale, \)500. Cost of goods, \(275.

18 Purchased inventory of \)3,600 on account from Rainman Corporation. Payment terms were 2/10, n/30, FOB destination.

20 Received cash from Geary Corporation, less discount.

26 Paid amount owed on account from November 18, less discount.

28 Received cash from Caldwell Company, less return.

29 Purchased inventory from Sandra Corporation for cash, \(12,300, FOB shipping point. Freight in paid to shipping company, \)170.

Short answer

The total debit and credit is$84,095.

Step-by-step solution

Meaning of Accounting

Accounting refers to an organized,step-by-step approach that facilitates business entities tomaintain their accounting records. Accounting considersfinancial transactionsonly, and records the same in the books for summarizing them annually.

Preparation of journal entries

Date	Accounts and Explanation	Debit ($)	Credit ($)
Nov 4	Merchandise inventory	5,000
	Accounts payable (Vera company)		5,000
Nov 6	Merchandise inventory	100
	Cash		100
Nov 8	Accounts payable (Vera company)	2,500
	Merchandise inventory		2,500
Nov 10	Cash	1,100
	Sales revenue		1,100
Nov 10	Cost of goods sold	400
	Merchandise inventory		400
Nov 11	Accounts receivable (Geary corp)	11,100
	Sales revenue		11,100
Nov 11	Cost of goods sold	6,105
	Merchandise inventory		6,105
Nov 12	Delivery expense	20
	Cash		20
Nov 13	Accounts receivable (Caldwell company)	9,500
	Sales revenue		9,500
Nov 13	Cost of goods sold	5,225
	Merchandise inventory		5,225
Nov 14	Accounts payable (Vera company) [5000-2500]	2,500
	Cash		2,425
	Merchandise inventory (2500*3%)		75
Nov 17	Sales returns and allowances	500
	Accounts receivable (Caldwell company)		500
Nov 17	Merchandise inventory	275
	Cost of goods sold		275
Nov 18	Merchandise inventory	3,600
	Accounts payable (Rainman Corp)		3,600
Nov 20	Cash	10,878
	Sales discount (11,100*2%)	222
	Accounts receivable (Geary Corp)		11,100
Nov 26	Accounts payable (Rainman Corp)	3,600
	Merchandise inventory (3600*2%)		72
	Cash		3,528
Nov 28	Cash (9500-500)	9,000
	Accounts receivable (Caldwell Company)		9,000
Nov 29	Merchandise inventory	12,300
	Cash		12,300
Nov 29	Merchandise inventory	170
	Cash		170