The following were selected from among the transactions completed by Babcock Company during November of the current year. Babock uses the net method under a perpetual inventory system. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. InstructionsThe following were selected from among the transactions completed by Babcock Company during November of the current year. Babcock uses the net method under a perpetual inventory system.Nov.3Purchased merchandise on account from Moonlight Co., list price $93,000, trade discount 25%, termsFOB destination, 2/10, n/30.Chart of Accounts4Sold merchandise for cash, $34,100. The cost of the goods sold was $22,080.5Purchased merchandise on account from Papoose Creek Co., $43,650, terms FOB shipping point,CHART OF ACCOUNTS2/10, n/30, with prepaid freight of $750 added to the invoice.Babcock Company6Returned $15,000 ($20,000 list price less trade discount of 25%) of merchandise purchased onNovember 3 from Moonlight Co.General Ledger8Sold merchandise on account to Quinn Co., $15,270 with terms n/15. The cost of the goods sold was$8,940.ASSETSREVENUE13Paid Moonlight Co. on account for purchase of November 3, less return of November 6.110 Cash410 Sales14Sold merchandise on VISA, $229,890. The cost of the goods sold was $153,500.121 Accounts Receivable-Quinn Co.610 Interest Revenue15Paid Papoose Creek Co. on account for purchase of November 5.122 Accounts Receivable-Rabel Co.23Received cash on account from sale of November 8 to Quinn Co.125 Notes ReceivableEXPENSES24Sold merchandise on account to Rabel Co., $51,300, terms 1/10, n/30. The cost of the goods sold was130 Inventory510 Cost of Goods Sold$33,280.131 Estimated Returns Inventory521 Delivery Expense28Paid VISA service fee of $3,410.140 Office Supplies522 Advertising Expense30Paid Quinn Co. a cash refund of $5,610 for returned merchandise from sale of November 8. The cost of141 Store Supplies524 Depreciation Expense-Store Equipmentthe returned merchandise was $3,180.142 Prepaid Insurance525 Depreciation Expense-Office Equipment180 Land526 Salaries Expense192 Store Equipment531 Rent ExpenseJournalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.193 Accumulated Depreciation-Store Equipment533 Insurance Expense194 Office Equipment534 Store Supplies Expense195 Accumulated Depreciation-Office Equipment535 Office Supplies ExpenseJournal536 Credit Card ExpenseLIABILITIES539 Miscellaneous Expense211 Accounts Payable-Moonlight Co.710 Interest ExpenseJournalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.212 Accounts Payable-Papoose Creek Co.216 Salaries Payable218 Sales Tax PayableJOURNAL219 Customer Refunds Payable221 Notes PayableDATEDESCRIPTIONPOST, REF.DEBITCREDITEQUITY2310 Common Stock3311 Retained Earnings4312 Dividends58910111213

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Description: The following were selected from among the transactions completed by Babcock Company during November of the current year. Babock uses the net method under a perpetual inventory system. Journalize the transactions. Refer to the Chart of Accounts for e

Answered: The following were selected from among…

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 following were selected from among the transactions completed by Babcock Company during November of the current year. Babock uses the net method under a perpetual inventory system. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

Instructions
The following were selected from among the transactions completed by Babcock Company during November of the current year. Babcock uses the net method under a perpetual inventory system.
Nov.
3
Purchased merchandise on account from Moonlight Co., list price $93,000, trade discount 25%, terms
FOB destination, 2/10, n/30.
Chart of Accounts
4
Sold merchandise for cash, $34,100. The cost of the goods sold was $22,080.
5
Purchased merchandise on account from Papoose Creek Co., $43,650, terms FOB shipping point,
CHART OF ACCOUNTS
2/10, n/30, with prepaid freight of $750 added to the invoice.
Babcock Company
6
Returned $15,000 ($20,000 list price less trade discount of 25%) of merchandise purchased on
November 3 from Moonlight Co.
General Ledger
8
Sold merchandise on account to Quinn Co., $15,270 with terms n/15. The cost of the goods sold was
$8,940.
ASSETS
REVENUE
13
Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
110 Cash
410 Sales
14
Sold merchandise on VISA, $229,890. The cost of the goods sold was $153,500.
121 Accounts Receivable-Quinn Co.
610 Interest Revenue
15
Paid Papoose Creek Co. on account for purchase of November 5.
122 Accounts Receivable-Rabel Co.
23
Received cash on account from sale of November 8 to Quinn Co.
125 Notes Receivable
EXPENSES
24
Sold merchandise on account to Rabel Co., $51,300, terms 1/10, n/30. The cost of the goods sold was
130 Inventory
510 Cost of Goods Sold
$33,280.
131 Estimated Returns Inventory
521 Delivery Expense
28
Paid VISA service fee of $3,410.
140 Office Supplies
522 Advertising Expense
30
Paid Quinn Co. a cash refund of $5,610 for returned merchandise from sale of November 8. The cost of
141 Store Supplies
524 Depreciation Expense-Store Equipment
the returned merchandise was $3,180.
142 Prepaid Insurance
525 Depreciation Expense-Office Equipment
180 Land
526 Salaries Expense
192 Store Equipment
531 Rent Expense
Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
193 Accumulated Depreciation-Store Equipment
533 Insurance Expense
194 Office Equipment
534 Store Supplies Expense
195 Accumulated Depreciation-Office Equipment
535 Office Supplies Expense
Journal
536 Credit Card Expense
LIABILITIES
539 Miscellaneous Expense
211 Accounts Payable-Moonlight Co.
710 Interest Expense
Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
212 Accounts Payable-Papoose Creek Co.
216 Salaries Payable
218 Sales Tax Payable
JOURNAL
219 Customer Refunds Payable
221 Notes Payable
DATE
DESCRIPTION
POST, REF.
DEBIT
CREDIT
EQUITY
2
310 Common Stock
3
311 Retained Earnings
4
312 Dividends
5
8
9
10
11
12
13

Expert Solution

Step 1 Concepts

The Net method for recording purchase transactions, assumes that the buyer takes advantage of the cash discount provided for early payment.

The invoice price is list price, net of trade discount.

FOB(Free on board) destination indicates that the transfer of responsibility from seller to buyer of goods takes place when the goods are delivered at the buyer's destination. Any damage in transit is borne by seller.

FOB shipping point indicates that the transfer of responsibility from seller to buyer of goods takes place when the goods are loaded to the ship for delivery. Any loss in transit is borne by buyer.

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