Chapter 5, Problem P5.49CP1

Journalizing and posting purchase and sale transactions.

This problem continues the canyon canoe company situation from Chapter 4. At the beginning of the new Canyon canoe Company decided to carry and sell T-Shirts with its logo printed on them. Canyon Canoe Company uses the perpetual inventory System to account for the inventory. During January 2019, Canyon canoe Company completed the following merchandising transactions:

Jan.1
Purchased 10 T-Shirts at $4 each and paid cash.
2 Sold 6 T-Shirts for $10 each, total cost $24. Received cash.
3 Purchased 50 T-Shirts on account at $5each. Terms 2/10, n/30.
7 Paid the supplier for the T-Shirts purchased on January 3, less discount.

8 Realized 4 T-Shirts from the January 1 order were printed wrong and returned them for a case refund.

10 Sold 40 T-Shirts on account for $10 each, total cost of $200. Terms 3/15.
12 Received payment for the the T-Shirts sold on account on January 10, less discount.

14 Purchased 100 T-Shirts on account at $4 each. Terms 4/15, n/30.
18 Canyon Company called the supplier from the January 14 purchase and told them that some of the T-Shirts were the wrong color. The Supplier offered a $50 purchase allowance.
20 Paid the supplier for the T-Shirts purchased on January 14, less the allowance and discount.

21 Sold 60 T-Shirts on account for $10 each, total cost of $220. Terms 2/20, n/30.
23 Received a payment on account for the T-Shirts sold on January 21. Less discount.
25 Purchased 320 T-Shirts on account at $5 each. Terms 2/10, n/30, FOB shipping point.
27 Paid freight associated with the January 25 purchase, $48.

29 Paid for the January 25 purchase, less discount.

30 Sold 275 T-Shirts on account for $10 each, total cost of $1,300. Terms 2/10, n/30.
31 Received payment for the T-Shirts sold on January 30, less discount.

Requirements

1. Open the following T-accounts in the ledger, using the post-closing balances from Chapter 4. Accounts Receivable, Merchandise Inventory, Estimated Returns Inventory, Office Supplies, Prepaid Rent, Land Building, Accumulated Depreciation-Building, Canoes, Accumulated Depreciation-Canoes, Accounts Payable, Telephone Payable, Wages Payable, Refunds payable, Interest Payable, Unearned Revenue, Notes Payable, Wilson, Capital, Income Summary, Sales Revenue, Canoe Rental Revenue, Cost of Goods Sold, Rent Expense, Wages Expense, Unities Expense, Telephone Expense, Supplies Expense, Depreciation Expense-Building, Depreciation Expense-Canoes, Interest Expense.
2. Journalize and post the transactions. Compute each account balance, and denote the balance as Balance. Omit explanations.