Page 274 - Accounting Principles (A Business Perspective)

6. Merchandising transactions

18 Purchased merchandise on account from Tan Company invoiced at USD 28,800; terms 2/15, n/30, FOB
shipping point, freight collect.
18 Received a bill for freight charges of USD 900 from Ball Trucking Company on the purchase from Tan

Company.
19 Texas Company returned USD 360 of merchandise purchased on May 14.
24 Returned USD 2,880 of defective merchandise to Tan Company. Received full credit.
28 Texas Company remitted balance due on sale of May 14.
31 Paid Tan Company for the purchase of May 18 after adjusting for transaction of May 24.
31 Paid miscellaneous selling expenses of USD 7,200.
31 Paid miscellaneous administrative expenses of USD 10,800.

The May 31st inventory is USD 57,600. From the data for Noah Cabinet Company:
a. Journalize the transactions. Round all amounts to the nearest dollar.
b. Post the entries to the proper ledger accounts. Use the account numbers appearing in the chart of account
shown in a separate file at the end of the text. Assume all postings are from page 5 of the general journal.
(There were no adjusting journal entries.)
c. Prepare a trial balance.
d. Prepare a classified income statement for the month ended 2010 May 31.
Alternate problem E The following data are for Bayer Lamp Company:
Bayer Lamp Company
Trial Balance
2010 December 31
Acct. Account Title Debits Credits
No.
100 Cash $ 228,800
103 Accounts Receivable 193,200
105 Merchandise Inventory, 2010 January 1 166,400
108 Prepaid Insurance 11,600
130 Land 240,000
140 Building 440,000
141 Accumulated Depreciation – Building $ 132,000
174 Store Fixtures 222,400
175 Accumulated Depreciation – Store Fixtures 44,480
200 Accounts Payable 151,600
300 Capital Stock 400,000
310 Retained Earnings, 2010 January 1 480,720
410 Sales 2,206,000
411 Sales Discounts 14,800
412 Sales Returns and Allowances 8,000
418 Interest Revenue 1,600
500 Purchases 1,251,600
501 Purchases Discounts 10,400
502 Purchases Returns and Allowances 5,600
503 Transportation-In 29,200
505 Advertising Expense 48,000
508 Sales Salaries Expense 256,000
509 Office Salaries Expense 296,000
519 Delivery Expense 18,400

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