The following were selected from among the transactions completed by Babcock Company during November of the current year: Nov. 3 Purchased merchandise on account from Moonlight Co., list price $85,000, trade discount 25%, terms FOB destination, 2/10, n/30. 4 Sold merchandise for cash, $37,680. The cost of the goods sold was $22,600. 5 Purchased merchandise on account from Papoose Creek Co., $47,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice. 6 Returned $13,500 ($18,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co. 8 Sold merchandise on account to Quinn Co., $15,600 with terms n/15. The cost of the goods sold was $9,400. 13 Paid Moonlight Co. on account for purchase of November 3, less return of November 6. 14 Sold merchandise on VISA, $236,000. The cost of the goods sold was $140,000. 15 Paid Papoose Creek Co. on account for purchase of November 5. 23 Received cash on account from sale of November 8 to Quinn Co. 24 Sold merchandise on account to Rabel Co., $56,900, terms 1/10, n/30. The cost of the goods sold was $34,000. 28 Paid VISA service fee of $3,540. 30 Paid Quinn Co. a cash refund of $6,000 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,300. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

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 were selected from among the transactions completed by Babcock Company during November of the current year:

Nov.	3	Purchased merchandise on account from Moonlight Co., list price $85,000, trade discount 25%, terms FOB destination, 2/10, n/30.
	4	Sold merchandise for cash, $37,680. The cost of the goods sold was $22,600.
	5	Purchased merchandise on account from Papoose Creek Co., $47,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice.
	6	Returned $13,500 ($18,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co.
	8	Sold merchandise on account to Quinn Co., $15,600 with terms n/15. The cost of the goods sold was $9,400.
	13	Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
	14	Sold merchandise on VISA, $236,000. The cost of the goods sold was $140,000.
	15	Paid Papoose Creek Co. on account for purchase of November 5.
	23	Received cash on account from sale of November 8 to Quinn Co.
	24	Sold merchandise on account to Rabel Co., $56,900, terms 1/10, n/30. The cost of the goods sold was $34,000.
	28	Paid VISA service fee of $3,540.
	30	Paid Quinn Co. a cash refund of $6,000 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,300.

Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Babcock Company

General Ledger

	ASSETS
110	Cash
121	Accounts Receivable-Quinn Co.
122	Accounts Receivable-Rabel Co.
125	Notes Receivable
130	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
211	Accounts Payable-Moonlight Co.
212	Accounts Payable-Papoose Creek Co.
216	Salaries Payable
218	Sales Tax Payable
219	Customer Refunds Payable
221	Notes Payable

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

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods 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

Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
2
4
10
11
12
13
14
15
16
17

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20
21
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