Question

Journalize the following transactions that occurred in November 2018 for May's Adventure Park. Assume May's uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name
Julie's Fun World estimates sales returns at the end of each month.
Nov.
4 Purchased merchandise inventory on account from Vera Company, $5,000. Terms 3/10, n/EOM, FOB shipping point.
6 Paid freight bill of $100 on November 4 purchase.
8 Returned half the inventory purchased on November 4 from Vera Company
10 Sold merchandise inventory for cash, $1,100. Cost of goods, $400. FOB destination.
11 Sold merchandise inventory to Geary Corporation, $11,100, on account, terms of 2/10, n/EOM. Cost of goods, $6,105. FOB shipping point.
12 Paid freight bill of $20 on November 10 sale.
13 Sold merchandise inventory to Caldwell Company, $9,500, on account, terms of n/45. Cost of goods, $5,225. FOB shipping point.
14 Paid the amount owed on account from November 4, less return and discount
17 Received defective inventory as a sales return from the November 13 sale, $500. Cost of goods, $275
18 Purchased inventory of $3,600 on account from Rainman Corporation. Payment terms were 2/10, n/30, FOB destination.
20 Received cash from Geary Corporation, less discount.
26 Paid amount owed on account from November 18, less discount.
28 Received cash from Caldwell Company, less return.
29 Purchased inventory from Sandra Corporation for cash, $12,300, FOB shipping point. Freight in paid to shipping company,
$170.

Answer 1

Answer:

May's Adventure Park

Journal Entries for November 2018:

Nov. 4: Debit Inventory $5,000

           Credit Accounts Payable (Vera Company) $5,000

Nov. 6: Debit Freight-in $100

           Credit Cash                     $100

Nov. 8: Debit Accounts Payable (Vera Company) $2,500

           Credit Inventory Returns $2,500

Nov. 10: Debit Cash Account $1,100

             Credit Sales $1,100

Nov. 10: Debit Cost of Goods Sold $400

             Credit Inventory $400

Nov. 11: Debit Accounts Receivable (Geary Corporation) $11,100

            Credit Sales $11,100

Nov. 11: Debit Cost of Goods Sold $6,105

           Credit Inventory $6,105

Nov. 12: Debit Freight-out $20

             Credit Cash Account $20

Nov. 13: Debit Accounts Receivable (Caldwell Company) $9,500

             Credit Sales $9,500

Nov. 13: Debit Cost of Goods Sold $5,225

             Credit Inventory $5,225

Nov. 14: Debit Accounts Payable (Vera Company) $2,500

             Credit Cash Discount  $75

             Credit Cash Account $2,425

Nov. 17: Debit Sales Returns $500

             Credit Accounts Receivable (Caldwell Company) $500

Nov. 17: Debit Inventory $500

             Credit Cost of Goods Sold $500

Nov. 18: Debit Inventory $3,600

             Credit Accounts Payable (Rainman Corporation) $3,600

Nov. 20: Debit Cash Account $10,878

              Debit Cash Discount $222

              Credit Accounts Receivable (Geary Corporation) $11,100

Nov. 26: Debit Accounts Payable (Rainman Corporation) $3,600

              Credit Cash Discount $72

              Credit Cash Account $3,528

Nov. 28: Debit Cash Account $9,000

              Credit Accounts Receivable (Caldwell Company) $9,000

Nov. 29: Debit Inventory $12,300

              Credit Accounts Payable (Sandra Corporation) $12,300

Nov. 29: Debit Freight-in $170

              Credit Cash Account $170

Explanation:

Journal entries are made to debit and credit the accounts involved in each business transaction.  They are the first accounting records made to capture transactions after they have been analyzed to know the accounts affected and which accounts in the ledger will be debited or credited.  They are usually accompanied with short explanations, e.g. the trade terms.