The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers:Record on page 10 of the journalMar.2Sold merchandise on account to Equinox Co., $20,000, terms FOB destination, 1/10, n/30. The cost of the merchandise sold was $13,150. 3Sold merchandise for $10,950 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $7,100. 4Sold merchandise on account to Empire Co., $51,450, terms FOB shipping point, n/eom. The cost of merchandise sold was $35,420. 5Sold merchandise for $27,900 plus 6% sales tax to retail customers who used MasterCard. The cost of merchandise sold was $18,470. 12Received check for amount due from Equinox Co. for sale on March 2. 14Sold merchandise to customers who used American Express cards, $12,380. The cost of merchandise sold was $9,120. 16Sold merchandise on account to Targhee Co., $28,500, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $14,690. 18Issued credit memo for $1,200 to Targhee Co. for damaged merchandise from sale on March 16 Record on page 11 of the journal 19Sold merchandise on account to Vista Co., $8,500, terms FOB shipping point, 2/10, n/30. Added $55 to the invoice for prepaid freight. The cost of merchandise sold was $4,620. 26Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18. 28Received check for amount due from Vista Co. for sale of March 19. 31Received check for amount due from Empire Co. for sale of March 4. 31Paid Fleetwood Delivery Service $6,040 for delivery of merchandise in March to customers under shipping terms of FOB destination.Apr.3Paid City Bank $860 for service fees for handling MasterCard and American Express sales during March. 15Paid $6,385 to state sales tax division for taxes owed on salesCHART OF ACCOUNTSAmsterdam Supply Co.General Ledger ASSETS110Cash121Accounts Receivable-Empire Co.122Accounts Receivable-Equinox Co.123Accounts Receivable-Targhee Co.124Accounts Receivable-Vista Co.125Notes Receivable130Merchandise Inventory131Estimated Returns Inventory140Office Supplies141Store Supplies142Prepaid Insurance180Land192Store Equipment193Accumulated Depreciation-Store Equipment194Office Equipment195Accumulated Depreciation-Office Equipment LIABILITIES210Accounts Payable216Salaries Payable218Sales Tax Payable219Customer Refunds Payable221Notes Payable EQUITY310Owner, Capital311Owner, Drawing REVENUE410Sales610Interest Revenue EXPENSES510Cost of Merchandise Sold521Delivery Expense522Advertising Expense524Depreciation Expense-Store Equipment525Depreciation Expense-Office Equipment526Salaries Expense531Rent Expense533Insurance Expense534Store Supplies Expense535Office Supplies Expense536Credit Card Expense539Miscellaneous Expense710Interest Expense **Journal Entry Template**This template is designed for accounting purposes and is structured to facilitate recording business transactions in a journal format, which ultimately supports the accounting equation: Assets = Liabilities + Equity.**1. Date**: This column is used to record the date of each transaction.**2. Description**: This area is reserved for a brief description of the transaction or entry being recorded.**3. Post Ref. (Posting Reference)**: This column could be used to note the ledger page number or any reference that links the journal entry to its corresponding ledger account pages.**4. Debit**: This column is for entering the monetary amount that increases the asset or expense accounts, or decreases the liabilities, equity, or revenue accounts.**5. Credit**: This column is for entering the monetary amount that increases the liability, equity, or revenue accounts, or decreases the assets or expense accounts.**6. Accounting Equation**: The following categories help in balancing and ensuring that every journal entry adheres to the accounting equation: - **Assets**: The resources owned by the business. - **Liabilities**: The obligations or debts the business owes to external parties. - **Equity**: The owner's interest in the business after all liabilities have been deducted from assets.This journal includes 18 rows for recording individual transactions, providing a systematic approach to ensuring the dual entry bookkeeping principle is followed. This principle mandates that for every financial transaction, there must be corresponding and opposite entries in at least two different accounts. **Journalizing Transactions for Amsterdam Supply Co.**Below is a record of the transactions for Amsterdam Supply Co., displayed in a journal format. Each transaction is listed by date, description, debit, credit, and effects on the accounting equation (assets, liabilities, and equity). The CNOW journals automatically handle indentation for credit entries.---### JOURNAL| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY ||--------|---------------------------------|------------|-----------|-----------|--------|-------------|--------|| Mar. 2 | Accounts Receivable-Equinox Co. | | 20,000.00 | | ↑ | | || | Sales | | | 20,000.00 | | | ↑ || | Cost of Merchandise Sold | | 13,150.00 | | | | ↓ || | Merchandise Inventory | | | 13,150.00 | ↓ | | || Mar. 3 | Cash | | 10,950.00 | | ↑ | | || | Sales | | | 10,950.00 | | | ↑ || | Sales Tax Payable | | | | | | || Mar. 3 | Cost of Merchandise Sold | | 7,100.00 | | | | ↓ || | Merchandise Inventory | | | 7,100.00 | ↓ | | || Mar. 4 | Accounts Receivable-Empire Co. | | 51,450.00 | | ↑ | | || | Sales | | | 51,450.00 | | | ↑ || Mar. 4 | Cost of Merchandise Sold | | 35,420.00 | | | | ↓ || | Merchandise Inventory | | | 35,420.00 | ↓ | | || Mar. 5 | Cash | | 27,900.00 | | ↑ | | || | Sales

What is meant by journal entries? It is the first step to record the financial transactions in the…

The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers: Record on page 10 of the journal Mar. 2 Sold merchandise on account to Equinox Co., $20,000, terms FOB destination, 1/10, n/30. The cost of the merchandise sold was $13,150. 3 Sold merchandise for $10,950 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $7,100. 4 Sold merchandise on account to Empire Co., $51,450, terms FOB shipping point, n/eom. The cost of merchandise sold was $35,420. 5 Sold merchandise for $27,900 plus 6% sales tax to retail customers who used MasterCard. The cost of merchandise sold was $18,470. 12 Received check for amount due from Equinox Co. for sale on March 2. 14 Sold merchandise to customers who used American Express cards, $12,380. The cost of merchandise sold was $9,120. 16 Sold merchandise on account to Targhee Co., $28,500, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $14,690. 18 Issued credit memo for $1,200 to Targhee Co. for damaged merchandise from sale on March 16 Record on page 11 of the journal 19 Sold merchandise on account to Vista Co., $8,500, terms FOB shipping point, 2/10, n/30. Added $55 to the invoice for prepaid freight. The cost of merchandise sold was $4,620. 26 Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18. 28 Received check for amount due from Vista Co. for sale of March 19. 31 Received check for amount due from Empire Co. for sale of March 4. 31 Paid Fleetwood Delivery Service $6,040 for delivery of merchandise in March to customers under shipping terms of FOB destination. Apr. 3 Paid City Bank $860 for service fees for handling MasterCard and American Express sales during March. 15 Paid $6,385 to state sales tax division for taxes owed on sales CHART OF ACCOUNTS Amsterdam Supply Co. General Ledger ASSETS 110 Cash 121 Accounts Receivable-Empire Co. 122 Accounts Receivable-Equinox Co. 123 Accounts Receivable-Targhee Co. 124 Accounts Receivable-Vista Co. 125 Notes Receivable 130 Merchandise Inventory 131 Estimated Returns 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 210 Accounts Payable 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 221 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing REVENUE 410 Sales 610 Interest Revenue

The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers: Record on page 10 of the journal Mar. 2 Sold merchandise on account to Equinox Co., $20,000, terms FOB destination, 1/10, n/30. The cost of the merchandise sold was $13,150. 3 Sold merchandise for $10,950 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $7,100. 4 Sold merchandise on account to Empire Co., $51,450, terms FOB shipping point, n/eom. The cost of merchandise sold was $35,420. 5 Sold merchandise for $27,900 plus 6% sales tax to retail customers who used MasterCard. The cost of merchandise sold was $18,470. 12 Received check for amount due from Equinox Co. for sale on March 2. 14 Sold merchandise to customers who used American Express cards, $12,380. The cost of merchandise sold was $9,120. 16 Sold merchandise on account to Targhee Co., $28,500, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $14,690. 18 Issued credit memo for $1,200 to Targhee Co. for damaged merchandise from sale on March 16 Record on page 11 of the journal 19 Sold merchandise on account to Vista Co., $8,500, terms FOB shipping point, 2/10, n/30. Added $55 to the invoice for prepaid freight. The cost of merchandise sold was $4,620. 26 Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18. 28 Received check for amount due from Vista Co. for sale of March 19. 31 Received check for amount due from Empire Co. for sale of March 4. 31 Paid Fleetwood Delivery Service $6,040 for delivery of merchandise in March to customers under shipping terms of FOB destination. Apr. 3 Paid City Bank $860 for service fees for handling MasterCard and American Express sales during March. 15 Paid $6,385 to state sales tax division for taxes owed on sales CHART OF ACCOUNTS Amsterdam Supply Co. General Ledger ASSETS 110 Cash 121 Accounts Receivable-Empire Co. 122 Accounts Receivable-Equinox Co. 123 Accounts Receivable-Targhee Co. 124 Accounts Receivable-Vista Co. 125 Notes Receivable 130 Merchandise Inventory 131 Estimated Returns 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 210 Accounts Payable 216 Salaries Payable 218 Sales Tax Payable 219 Customer Refunds Payable 221 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing REVENUE 410 Sales 610 Interest Revenue

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

The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers:

Record on page 10 of the journal

Mar.	2	Sold merchandise on account to Equinox Co., $20,000, terms FOB destination, 1/10, n/30. The cost of the merchandise sold was $13,150.
	3	Sold merchandise for $10,950 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $7,100.
	4	Sold merchandise on account to Empire Co., $51,450, terms FOB shipping point, n/eom. The cost of merchandise sold was $35,420.
	5	Sold merchandise for $27,900 plus 6% sales tax to retail customers who used MasterCard. The cost of merchandise sold was $18,470.
	12	Received check for amount due from Equinox Co. for sale on March 2.
	14	Sold merchandise to customers who used American Express cards, $12,380. The cost of merchandise sold was $9,120.
	16	Sold merchandise on account to Targhee Co., $28,500, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $14,690.
	18	Issued credit memo for $1,200 to Targhee Co. for damaged merchandise from sale on March 16

Record on page 11 of the journal

	19	Sold merchandise on account to Vista Co., $8,500, terms FOB shipping point, 2/10, n/30. Added $55 to the invoice for prepaid freight. The cost of merchandise sold was $4,620.
	26	Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18.
	28	Received check for amount due from Vista Co. for sale of March 19.
	31	Received check for amount due from Empire Co. for sale of March 4.
	31	Paid Fleetwood Delivery Service $6,040 for delivery of merchandise in March to customers under shipping terms of FOB destination.
Apr.	3	Paid City Bank $860 for service fees for handling MasterCard and American Express sales during March.
	15	Paid $6,385 to state sales tax division for taxes owed on sales

CHART OF ACCOUNTS

Amsterdam Supply Co.

General Ledger

	ASSETS
110	Cash
121	Accounts Receivable-Empire Co.
122	Accounts Receivable-Equinox Co.
123	Accounts Receivable-Targhee Co.
124	Accounts Receivable-Vista Co.
125	Notes Receivable
130	Merchandise Inventory
131	Estimated Returns 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
210	Accounts Payable
216	Salaries Payable
218	Sales Tax Payable
219	Customer Refunds Payable
221	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing

	REVENUE
410	Sales
610	Interest Revenue

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

**Journal Entry Template**

This template is designed for accounting purposes and is structured to facilitate recording business transactions in a journal format, which ultimately supports the accounting equation: Assets = Liabilities + Equity.

**1. Date**: This column is used to record the date of each transaction.

**2. Description**: This area is reserved for a brief description of the transaction or entry being recorded.

**3. Post Ref. (Posting Reference)**: This column could be used to note the ledger page number or any reference that links the journal entry to its corresponding ledger account pages.

**4. Debit**: This column is for entering the monetary amount that increases the asset or expense accounts, or decreases the liabilities, equity, or revenue accounts.

**5. Credit**: This column is for entering the monetary amount that increases the liability, equity, or revenue accounts, or decreases the assets or expense accounts.

**6. Accounting Equation**: The following categories help in balancing and ensuring that every journal entry adheres to the accounting equation:
- **Assets**: The resources owned by the business.
- **Liabilities**: The obligations or debts the business owes to external parties.
- **Equity**: The owner's interest in the business after all liabilities have been deducted from assets.

This journal includes 18 rows for recording individual transactions, providing a systematic approach to ensuring the dual entry bookkeeping principle is followed. This principle mandates that for every financial transaction, there must be corresponding and opposite entries in at least two different accounts.

**Journalizing Transactions for Amsterdam Supply Co.**

Below is a record of the transactions for Amsterdam Supply Co., displayed in a journal format. Each transaction is listed by date, description, debit, credit, and effects on the accounting equation (assets, liabilities, and equity). The CNOW journals automatically handle indentation for credit entries.

---

### JOURNAL

| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY |
|--------|---------------------------------|------------|-----------|-----------|--------|-------------|--------|
| Mar. 2 | Accounts Receivable-Equinox Co. | | 20,000.00 | | ↑ | | |
| | Sales | | | 20,000.00 | | | ↑ |
| | Cost of Merchandise Sold | | 13,150.00 | | | | ↓ |
| | Merchandise Inventory | | | 13,150.00 | ↓ | | |
| Mar. 3 | Cash | | 10,950.00 | | ↑ | | |
| | Sales | | | 10,950.00 | | | ↑ |
| | Sales Tax Payable | | | | | | |
| Mar. 3 | Cost of Merchandise Sold | | 7,100.00 | | | | ↓ |
| | Merchandise Inventory | | | 7,100.00 | ↓ | | |
| Mar. 4 | Accounts Receivable-Empire Co. | | 51,450.00 | | ↑ | | |
| | Sales | | | 51,450.00 | | | ↑ |
| Mar. 4 | Cost of Merchandise Sold | | 35,420.00 | | | | ↓ |
| | Merchandise Inventory | | | 35,420.00 | ↓ | | |
| Mar. 5 | Cash | | 27,900.00 | | ↑ | | |
| | Sales

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