308)
7. The new contra accounts introduced in this chapter are: Cost of goods sold, Sales Returns and Allowances and Sales Discounts.
10. Inventory ($ 20,000) + purchases total ($ 110,000) + freight ($ 4,000) - Cost of goods sold ? = ending inventory ($ 28,000), then Cost
of goods sold is $ 106,000.
Feb. 06
Inventory
Post. Ref.
Debit
Credit
60,000
60,000
Accounts Payable
Purchase inventory on account, terms 1/10, n/30.
Feb. 06
Inventory
1,000
Accounts Payable
1,000
Freight bill.
Feb. 10
Accounts Payable
5,000
5,000
Accounts Payable
24,242
24,000
Cash
242
Inventory
Paid on account within the discount period. Purchase discount is $ 24,000/99% = $ 242,42
Feb. 27
Accounts Payable
Cash
Paid on account after the discount period.
30,758
30,758
Chao Pharmaceuticals
Pag. 1
Date
Feb. 06
Account Receivable
Post. Ref.
Debit
Credit
60,000
60,000
Sales Revenue
Sales on account, terms of 1/10, n/30.
Feb. 06
36,000
Inventory
36,000
5,000
5,000
Account Receivable
Received returned goods.
Feb. 10
Inventory
3,000
3,000
Cash
Sales Discounts
24,000
242
Account Receivable
24,242
Cash collection within the discount period. Sales discount is $24,000/99% = $ 242,42
Feb. 27
Cash
Account Receivable
Cash collection after the discount period.
30,758
30,758
May 03
Office Supplies
Post. Ref.
Debit
Credit
11,000
11,000
Sales Revenue
Purchased office supplies for cash
May 07
Inventory
76,000
Accounts Payable
76,000
19,000
Accounts Payable
19,000
Inventory
Returned part of the inventory purchased on may 07.
May 10
17,000
Cash
17,000
Sales Revenue
Sold goods for cash.
May 10
10,200
Inventory
10,200
135,720
Accounts Receivable
10,200
Sales Revenue
Sold goods on account, terms 2/15, n/45.
May 13
90,480
Inventory
90,480
Accounts Payable
57,000
Cash
55,290
Inventory
1,710
Paid on account within the discount period and less the return. Purchase discount is ($ 76,000 $ 19,000) * 3% = $ 1,710.
May 17
12,400
12,400
Accounts Receivable
Received returned goods.
May 17
Inventory
7,440
7,440
Inventory
164,000
Accounts Payable
164,000
164,000
Accounts Payable
160,720
Cash
3,280
Inventory
Paid on account within the discount period. Purchase discount is ($ 164,000 * 2% = $ 3,280.
May 28
Cash
120,854
Sales Discounts
2,466
Account Receivable
123,320
Cash collection within the discount period. Sales discount is ($135,720- 12,400) *2% = $ 2,466.
May 31
Inventory
77,800
Cash
77,800
Inventory
Bal.
20,000
19,000 May 08
May 07
76,000
10,200 May 13
May 17
7,400
90,480 May 13
May 18
164,000
1,710 May 16
May 31
77,800
3,280 May 26
345,200
220,530
124,670
19,000