A company purchases office supplies worth $3,000 on credit. Later, they pay $1,200 in cash for part of the supplies purchased. After a month, they realize $300 worth of supplies were defective and return them, receiving a refund. What are the entries for these transactions in the company's accounts? XYZ Company, a small retail business, started the month with $15,000 in cash and inventory worth $25,000. During the month, the company purchased additional inventory worth $10,000 on credit and made sales totalling $20,000, of which $5,000 was cash sales and the rest was on account. The cost of the inventory sold was $12,000. By the end of the month, the company paid $6,000 to suppliers for inventory purchases. Additionally, the company incurred $3,000 in operating expenses, which were all paid in cash. Prepare the journal entries for each transaction and calculate the ending balances for Cash, Accounts Receivable, Inventory, Accounts Payable, and Retained Earnings.

College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter14: Adjustments For A Merchandising Business
Section: Chapter Questions
Problem 1CP: Block Foods, a retail grocery store, has agreed to purchase all of its merchandise from Square...
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A company purchases office supplies worth $3,000 on credit. Later,
they pay $1,200 in cash for part of the supplies purchased. After a
month, they realize $300 worth of supplies were defective and return
them, receiving a refund. What are the entries for these transactions in
the company's accounts? XYZ Company, a small retail business,
started the month with $15,000 in cash and inventory worth $25,000.
During the month, the company purchased additional inventory worth
$10,000 on credit and made sales totalling $20,000, of which $5,000
was cash sales and the rest was on account. The cost of the inventory
sold was $12,000. By the end of the month, the company paid $6,000
to suppliers for inventory purchases. Additionally, the company
incurred $3,000 in operating expenses, which were all paid in cash.
Prepare the journal entries for each transaction and calculate the ending
balances for Cash, Accounts Receivable, Inventory, Accounts Payable,
and Retained Earnings.
Transcribed Image Text:A company purchases office supplies worth $3,000 on credit. Later, they pay $1,200 in cash for part of the supplies purchased. After a month, they realize $300 worth of supplies were defective and return them, receiving a refund. What are the entries for these transactions in the company's accounts? XYZ Company, a small retail business, started the month with $15,000 in cash and inventory worth $25,000. During the month, the company purchased additional inventory worth $10,000 on credit and made sales totalling $20,000, of which $5,000 was cash sales and the rest was on account. The cost of the inventory sold was $12,000. By the end of the month, the company paid $6,000 to suppliers for inventory purchases. Additionally, the company incurred $3,000 in operating expenses, which were all paid in cash. Prepare the journal entries for each transaction and calculate the ending balances for Cash, Accounts Receivable, Inventory, Accounts Payable, and Retained Earnings.
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