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Chapter 5: Q15SE (page 298)

Journalize the following sales transactions for Sanborn Camera Store using the periodic inventory system. Explanations are not required.
Dec. 3, Sanborn sold $41,900 of camera equipment on the account; credit terms are 3/15, n/EOM.
17 Sanborn receives payment from the customer on the amount due to less the discount.

Short Answer

Expert verified

The total of debits and credits is$83,800

Step by step solution

01

Definition of Journal Entries

In the accounting process, the recording offinancial information in the tabular format by considering thedebit and credit aspects is termed journal entries. It is the primary activity of the business concern that helps in drafting further reports.

02

Preparation of journal entries

Date	Accounts and Explanation	Debit ($)	Credit ($)
Dec 3	Accounts receivable	41,900
	Sales revenue		41,900
Dec 17	Cash	40,643
	Sales discount (41,900*3%)	1,257
	Accounts receivable		41,900

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Most popular questions from this chapter

The records of Grade A Beef Company list the following selected accounts for the quarter ended September 30, 2018:

Interest Revenue \( 900 Accounts Payable \) 17,000

Merchandise Inventory 46,300 Accounts Receivable 33,500

Notes Payable, long-term 47,000 Accumulated Depreciation— Equipment 36,500

Salaries Payable 2,600 Common Stock 38,000

Net Sales Revenue 294,000 Retained Earnings 3,610

Rent Expense (Selling) 16,700 Dividends 15,000

Salaries Expense (Administrative) 2,500 Cash 7,300

Office Supplies 5,800 Cost of Goods Sold 161,700

Unearned Revenue 13,800 Equipment 131,000

Interest Expense 2,300 Interest Payable 900

Depreciation Expense—Equipment (Administrative) 1,310

Rent Expense (Administrative) 7,400

Utilities Expense (Administrative) 4,500 Salaries Expense (Selling) 5,000

Delivery Expense (Selling) 3,100 Utilities Expense (Selling) 10,900

Requirements

1. Prepare a single-step income statement.

2. Prepare a multi-step income statement.

3. J. Douglas, manager of the company, strives to earn a gross profit percentage of at least 50%. Did Grade A Beef achieve this goal? Show your calculations

What is inventory shrinkage? Describe the adjusting entry that would be recorded to account for inventory shrinkage.

D & T Printing Supplies’ accounting records include the following accounts at December 31, 2018.

Purchases \( 185,200 Accumulated Depreciation—Building \) 21,000

Accounts Payable 7,700 Cash 18,100

Rent Expense 8,600 Sales Revenue 257,800

Building 42,800 Depreciation Expense—Building 4,700

Common Stock 55,000 Dividends 26,500

Retained Earnings 30,400 Interest Expense 1,900

Merchandise Inventory,

Beginning 119,000 Merchandise Inventory,

Ending 102,100

Notes Payable 11,300 Purchase Returns and Allowances 20,700

Purchase Discounts 2,900

Requirements

1. Journalize the required closing entries for D & T Printing Supplies assuming that D & T uses the periodic inventory system.

2. Determine the ending balance in the Retained Earnings account.

Under the new revenue recognition standard, what most companies do at the end of the period related to sales returns? Describe the journal entries that would be recorded.

Rae Philippe was a warehouse manager for Atkins Oilfield Supply, a business that operated across eight Western states. She was an old pro and had known most of the other warehouse managers for many years. Around December each year, auditors would come to do a physical count of the inventory at each warehouse. Recently, Rae’s brother started his own drilling company and persuaded Rae to “loan” him 80 joints of 5-inch drill pipe to use for his first well. He promised to have it back to Rae by December, but the well encountered problems and the pipe was still in the ground. Rae knew the auditors were on the way, so she called her friend Andy, who ran another Atkins warehouse. “Send me over 80 joints of 5-inch pipe tomorrow, and I’ll get them back to you ASAP,” said Rae. When the auditors came, all the pipe on the books was accounted for, and they filed a “no-exception” report.

Requirements

1. Is there anything the company or the auditors could do in the future to detect this kind of fraudulent practice?

2. How would this kind of action affect the financial performance of the company?

See all solutions

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