he chart of accounts of Crane Company includes the following selected accounts. 112 Accounts Receivable 401 Sales Revenue 120 Inventory 412 Sales Returns and Allowances 126 Supplies 505 Cost of Goods Sold 157 Equipment 610 Advertising Expense 201 Accounts Payable In July, the following transactions were completed. All purchases and sales were on account. The cost of all merchandise sold was 70% of the sales price. July 1 Purchased merchandise from Eby Company $8,240. 2 Received freight bill from Shaw Shipping on Eby purchase $360. 3 Made sales to Fort Company $1,970 and to Hefner Bros. $2,160. 5 Purchased merchandise from Getz Company $3,150. 8 Received credit on merchandise returned to Getz Company $340. 13 Purchased store supplies from Dayne Supply $740. 15 Purchased merchandise from Eby Company $3,660 and from Bosco Company $4,340. 16 Made sales to Aybar Company $3,750 and to Hefner Bros. $1,800. 18 Received bill for advertising from Welton Advertisements $580. 21 Sales were made to Fort Company $150 and to Duncan Company $3,380. 22 Granted allowance to Fort Company for merchandise damaged in shipment $50. 24 Purchased merchandise from Getz Company $3,040. 26 Purchased equipment from Dayne Supply $800. 28 Received freight bill from Shaw Shipping on Getz purchase of July 24, $310. 30 Sales were made to Aybar Company $5,080.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The chart of accounts of Crane Company includes the following selected accounts.

112	Accounts Receivable	401	Sales Revenue
120	Inventory	412	Sales Returns and Allowances
126	Supplies	505	Cost of Goods Sold
157	Equipment	610	Advertising Expense
201	Accounts Payable

In July, the following transactions were completed. All purchases and sales were on account. The cost of all merchandise sold was 70% of the sales price.

July 1		Purchased merchandise from Eby Company $8,240.
2		Received freight bill from Shaw Shipping on Eby purchase $360.
3		Made sales to Fort Company $1,970 and to Hefner Bros. $2,160.
5		Purchased merchandise from Getz Company $3,150.
8		Received credit on merchandise returned to Getz Company $340.
13		Purchased store supplies from Dayne Supply $740.
15		Purchased merchandise from Eby Company $3,660 and from Bosco Company $4,340.
16		Made sales to Aybar Company $3,750 and to Hefner Bros. $1,800.
18		Received bill for advertising from Welton Advertisements $580.
21		Sales were made to Fort Company $150 and to Duncan Company $3,380.
22		Granted allowance to Fort Company for merchandise damaged in shipment $50.
24		Purchased merchandise from Getz Company $3,040.
26		Purchased equipment from Dayne Supply $800.
28		Received freight bill from Shaw Shipping on Getz purchase of July 24, $310.
30		Sales were made to Aybar Company $5,080.

Journalize the transactions above in a purchases journal, a sales journal, and a general journal. (Record entries in the order
displayed in the problem statement.)
Purchases Journal
(Debited)
Ref.
Accounts Payable Cr.
Inventory Dr.
Other Accounts Dr.
126/
610/
157/
(201)
(120)
(X)
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