Journal Entries for the transactions during the month of July by Essex Company are as follows:
July 3. Debit Purchases $61,200
Debit Freight-in Expenses $1,450
Credit Accounts Payable (Hamling Co.) $62,650
- To record purchase of goods with a list price $72,000, trade discount 15%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $1,450 added to the invoice.
July 5. Debit Purchases $33,450
Credit Accounts Payable (Kester Co.) $33,450
- To record purchase of goods on terms FOB destination, 2/10, n/30.
July 6. Debit Accounts Receivable (Parsley Co.) $36,000
Credit Sales Revenue $36,000
- To record sale of goods on terms n/15.
July 7. Debit Accounts Payable (Kester Co.) $6,850
Credit Purchases Returns $6,850
- To record purchases returns.
July 13. Debit Accounts Payable (Hamling Co.) $62,650
Credit Cash $61,426
Credit Cash Discounts $1,224 ($61,200 x 2%)
- To record payment on account and discounts.
July 15. Debit Accounts Payable (Kester Co.) $26,600
Credit Cash $26,068
Credit Cash Discounts $532 ($26,600 x 2%)
- To record payment in full plus discounts.
July 21. Debit Cash $36,000
Credit Accounts Receivable (Parsley Co.) $36,000
July 21. Debit Cash (MasterCard) $108,000
Credit Sales Revenue $108,000
- To record sales on MasterCard.
July 22. Debit Accounts Receivable (Tabor Co.) $16,650
Credit Sales Revenue $16,650
- To record sales on terms 2/10, n/30. The cost of the merchandise sold was $10,000.
July 23. Debit Cash $91,200
Credit Sales Revenue $91,200
July 28. Debit Sales Allowances $7,150
Credit Cash (Parsley Co.) $7,150
- To record the sales refund.
July 31. Debit MasterCard service fee $1,650
Credit Cash $1,650
- To record service fee payment.
Data Analysis:
July 3. Purchases $61,200 Freight-in Expenses $1,450 Accounts Payable (Hamling Co.) $62,650
List price $72,000, trade discount 15%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $1,450 added to the invoice.
July 5. Purchases $33,450 Accounts Payable (Kester Co.) $33,450
terms FOB destination, 2/10, n/30.
July 6. Accounts Receivable (Parsley Co.) $36,000 Sales Revenue $36,000
terms n/15.
The cost of the merchandise sold was $25,000.
July 7. Accounts Payable (Kester Co.) $6,850 Purchases Returns $6,850
July 13. Accounts Payable (Hamling Co.) $62,650 Cash $61,426 Cash Discounts $1,224 ($61,200 x 2%)
July 15. Accounts Payable (Kester Co.) $26,600 Cash $26,068 Cash Discounts $532 ($26,600 x 2%)
July 21. Cash $36,000 Accounts Receivable (Parsley Co.) $36,000
July 21. Cash (MasterCard) $108,000 Sales Revenue $108,000
The cost of the merchandise sold was $64,800.
July 22. Accounts Receivable (Tabor Co.) $16,650 Sales Revenue $16,650
terms 2/10, n/30. The cost of the merchandise sold was $10,000.
July 23. Cash $91,200 Sales Revenue $91,200
The cost of the merchandise sold was $55,000.
July 28. Sales Allowances $7,150
Cash (Parsley Co.) $7,150
The cost of the returned merchandise was $4,250.
July 31. MasterCard service fee $1,650 Cash $1,650
Thus, the journal entries have been recorded for July transactions for the Essex Company based on the periodic inventory system.
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