Journalize entries for the following related transactions of Lilly Heating & Air Company. Refer to the Chart of Accounts for the exact wording of account titles. A. Purchased $36,000 of merchandise from Schell Co. on account, terms 1/10, n/30. B. Paid the amount owed on the invoice within the discount period. C. Discovered that $9,000 of the merchandise purchased in (A) was defective and returned items, receiving credit. D. Purchased $5,000 of merchandise from Schell Co. on account, terms n/30. E. Received a refund from Schell Co. for return in (C) less the purchase in (D). CHART OF ACCOUNTS Lilly Heating & Air Company General Ledger ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 211 Accounts Payable-Schell Co. 218 Sales Tax Payable 219 Customer Refunds Payable 220 Unearned Rent 221 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary REVENUE 410 Sales 610 Rent Revenue EXPENSES 501 Cost of Goods Sold 521 Delivery Expense 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 531 Rent Expense 533 Insurance Expense 534 Store Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 539 Miscellaneous Expense 710 Interest Expense

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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Question

Journalize entries for the following related transactions of Lilly Heating & Air Company. Refer to the Chart of Accounts for the exact wording of account titles.

A.	Purchased $36,000 of merchandise from Schell Co. on account, terms 1/10, n/30.
B.	Paid the amount owed on the invoice within the discount period.
C.	Discovered that $9,000 of the merchandise purchased in (A) was defective and returned items, receiving credit.
D.	Purchased $5,000 of merchandise from Schell Co. on account, terms n/30.
E.	Received a refund from Schell Co. for return in (C) less the purchase in (D).

CHART OF ACCOUNTS

Lilly Heating & Air Company

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
125	Notes Receivable
130	Inventory
140	Office Supplies
141	Store Supplies
142	Prepaid Insurance
180	Land
192	Store Equipment
193	Accumulated Depreciation-Store Equipment
194	Office Equipment
195	Accumulated Depreciation-Office Equipment

	LIABILITIES
211	Accounts Payable-Schell Co.
218	Sales Tax Payable
219	Customer Refunds Payable
220	Unearned Rent
221	Notes Payable

	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends
313	Income Summary

	REVENUE
410	Sales
610	Rent Revenue

	EXPENSES
501	Cost of Goods Sold
521	Delivery Expense
522	Advertising Expense
524	Depreciation Expense-Store Equipment
525	Depreciation Expense-Office Equipment
531	Rent Expense
533	Insurance Expense
534	Store Supplies Expense
535	Office Supplies Expense
536	Credit Card Expense
539	Miscellaneous Expense
710	Interest Expense

PAGE 10
JOURNAL
Score: 117/126
ACCOUNTING FOUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
Dec. 31 Inventory
35,640.00
1
2
Accounts Payable-Schell Co.
35,640.00
Dec. 31
Accounts Payable-Schell Co.
35,640.00
4
Cash
35,640.00
Dec. 31 Accounts Payable-Schell Co.
8,910.00
5
Inventory
8,910.00
6
Dec. 31 Inventory
3,960.00
8
Accounts Payable-Schell Co.
4,950.00
↑
Dec. 31
Accounts Payable-Schell Co.
3,960.00
↑
10
Cash
26,730.00

Instructions
Journalize entries for the following related transactions of Lilly Heating & Air Company. Refer to the Chart of Accounts for exact wording of account titles.
A. Purchased $36,000 of merchandise from Schell Co. on account, terms 1/10, n/30.
B. Paid the amount owed on the invoice within the discount period.
C. Discovered that $9,000 of the merchandise purchased in (A) was defective and returned items, receiving credit.
D. Purchased $5,000 of merchandise from Schell Co. on account, terms n/30.
E. Received a refund from Schell Co. for return in (C) less the purchase in (D).

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