
1.
Record the
1.

Answer to Problem 22E
The journal entry for the credit sale is recorded as follows:
Date | Account Title and Explanation |
Post Ref. |
Debit ($) |
Credit ($) | |
February 1, 2014 | 1,500 | ||||
Sales | 1,500 | ||||
(To record the sales made on account) | |||||
February 1, 2014 | Cost of Goods Sold | 975 | |||
Merchandised Inventory | 975 | ||||
(To record the cost of goods sold) |
Table (1)
Explanation of Solution
- Accounts receivable is an asset and increased by $1,500. Therefore, debit accounts receivable account with $1,500.
- Sales are revenue and increased by $1,500. Therefore, credit sales account with $1,500.
- Cost of goods sold is an expense and increased which has decreased the equity by $975. Therefore, debit cost of goods sold account with $975.
- Merchandised inventory is an asset and decreased by $975. Therefore, credit the merchandised inventory account with $975.
2.
Record the journal entry for the account receivable that was collected in full on February 9, 2014.
2.

Answer to Problem 22E
The journal entry for the account receivable that was collected on February 9, 2014 is recorded as follows:
Date | Account Title and Explanation |
Post Ref. |
Debit ($) |
Credit ($) |
February 9, 2014 | Cash (2) | 1,470 | ||
Sales discounts (1) | 30 | |||
Accounts Receivable | 1,500 | |||
(To record the sale discounts) |
Table (2)
Explanation of Solution
- Cash is an asset and increased by $1,470. Therefore, debit cash account with $1,470.
- Sale discount is a contra-sale account (with normal debit balance) and increased by $30. Therefore, credit the sale discount account with $30.
- Accounts receivable is an asset and decreased by $1,500. Therefore, credit accounts receivable account with $1,500.
Working note:
Compute the amount of sale discount:
Determine the amount of cash:
3.
Record the journal entry for the account receivable that was collected in full on March 2, 2014.
3.

Answer to Problem 22E
The journal entry for the account receivable that was collected in full on March 2, 2014 is recorded as follows:
Date | Account Title and Explanation |
Post Ref. |
Debit ($) |
Credit ($) |
March 2, 2014 | Cash | 1,500 | ||
Accounts Receivable | 1,500 | |||
(To record the sales discounts) |
Table (3)
Explanation of Solution
- Cash is an asset and increased by $1,500. Therefore, debit cash account with $1,500.
- Accounts receivable is an asset and decreased by $1,500. Therefore, credit accounts receivable account with $1,500.
4.
Record the journal entry for the purchase made on credit.
4.

Answer to Problem 22E
The journal entry for the purchase made on credit is recorded as follows:
Date | Account Title and Explanation |
Post Ref. |
Debit ($) |
Credit ($) | |
March 4, 2014 | Merchandised Inventory | 9,000 | |||
Accounts Payable | 9,000 | ||||
(To record the purchase of inventories on account) |
Table (4)
Explanation of Solution
- Merchandised inventory is an asset and increased by $9,000. Therefore, debit the merchandised inventory account with $9,000.
- Accounts payable is a liability and increased by $9,000. Therefore, credit the accounts payable account with $9,000.
5.
Record the journal entry for the account payable that was paid in full on March 12, 2014.
5.

Answer to Problem 22E
Record the journal entry for the account payable that was paid in full on March 12.
Date | Account Title and Explanation |
Post Ref. |
Debit ($) |
Credit ($) | |
March 12, 2014 | Accounts Payable | 9,000 | |||
Inventory (3) | 270 | ||||
Cash (4) | 8,730 | ||||
(To record the payment made to the supplier) |
Table (5)
Explanation of Solution
- Accounts Payable is liability and decreased by $9,000. Therefore, debit the accounts payable account with $9,000.
- Merchandised inventory is an asset and decreased by $270. Therefore, credit the merchandised inventory account with $270.
- Cash is an asset and decreased by $8,730. Therefore, credit cash account with $8,730.
Working notes:
Compute the amount of purchase discount:
Determine the amount of cash:
6.
Record the journal entry for the account payable that was paid in full on March 28.
6.

Answer to Problem 22E
Record the journal entry for the account payable that was paid in full on March 28.
Date | Account Title and Explanation |
Post Ref. |
Debit ($) |
Credit ($) | |
March 12 | Accounts Payable | 9,000 | |||
Cash | 9,000 | ||||
(To record the payment made to the supplier) |
Table (6)
Explanation of Solution
- Accounts Payable is liability and decreased by $9,000. Therefore, debit the accounts payable account with $9,000.
- Cash is an asset and decreased by $9,000. Therefore, credit cash account with $9,000.
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