Answer:
Babcock Company
Journal Entries:
Nov. 3:
Debit Inventory $63,750
Credit Accounts Payable (Moonlight Co.) $63,750
To record the purchase of merchandise, terms FOB, destination, 2/10, n/30.
Nov. 4:
Debit Cash $37,680
Credit Sales Revenue $37,680
To record the sale of merchandise for cash.
Nov. 4:
Debit Cost of Goods Sold $22,600
Credit Inventory $22,600
To record the cost of merchandise sold.
Nov. 5:
Debit Inventory $47,500
Credit Prepaid Freight-in $810
Credit Accounts Payable (Papoose Creek Co.) $46,690
To record the purchase of merchandise, terms, FOB shipping point, 2/10, n/30
Nov. 6:
Debit Accounts Payable (Moonlight Co.) $13,500
Credit Inventory $13,500
To record the return of merchandise.
Nov. 8:
Debit Accounts Receivable (Quinn Co.) $15,600
Credit Sales Revenue $15,600
To record the sale of merchandise on account, terms n/15.
Nov. 8:
Debit Cost of Goods Sold $9,400
Credit Inventory $9,400
To record the cost of merchandise sold.
Nov. 13:
Debit Accounts Payable (Moonlight Co.) $50,250
Credit Cash Discount $1,005
Credit Cash $49,245
To record the payment on account.
Nov. 14:
Debit VISA account $236,000
Credit Sales Revenue $236,000
To record the sale of merchandise on VISA.
Nov. 14:
Debit Cost of Goods Sold $140,000
Credit Inventory $140,000
To record the cost of merchandise sold.
Nov. 15:
Debit Accounts Payable (Papoose Creek Co.) $46,690
Credit Cash Discount $934
Credit Cash $45,756
To record the payment on account.
Nov. 23:
Debit Cash $15,600
Credit Accounts Receivable (Quinn Co.) $15,600
To record the receipt of cash on account.
Nov. 24:
Debit Accounts Receivable (Rabel Co.) $56,900
Credit Sales Revenue $56,900
To record the sale of merchandise on account, terms 1/10, n/30.
Nov. 24:
Debit Cost of Goods Sold $34,000
Credit Inventory $34,000
To record the cost of goods sold.
Nov. 28:
Debit VISA Service Fee $3,540
Credit Cash $3,540
To record the payment of VISA service Fee.
Nov. 30:
Debit Sales Returns $6,000
Credit Cash $6,000
To record the cash refund for returned merchandise.
Nov. 30:
Debit Inventory $3,300
Credit Cost of Goods Sold $3,300
To record the cost of inventory returned.
Explanation:
The above journal entries initially record the transactions of Babcock Company in November. Here, the accounts involved in each transaction are identified, debited, and credited as the case may be.
