Selected accounts from the chart of accounts of Mercer Compa

Selected accounts from the chart of accounts of Mercer Company are shown below. 401 Sales Revenue 112 Accounts Receivable 412 Sales Returns and Allowances 126 Supplies 157 Equipment 201 Accounts Payable 414 Sales Discounts 505 Cost of Goods Sold 726 Salaries and Wages Expense The cost of all merchandise sold was 60% of the sales price. During January, Mercer completed the following transactions. an. 3 Purchased merchandise on account from Gallagher Co. $10,800 4 Purchased supplies for cash $90 4 Sold merchandise on account to Wheeler $5,890, invoice no. 371, terms 1/10, n/30. 5 Returned S500 worth of damaged goods purchased on account from Gallagher Co. on January 3 6 Made cash sales for the week totaling $3,450 8 Purchased merchandise on account from Phegley Co. $4,100 9 Sold merchandise on account to Linton Corp, $5,300, invoice no. 372, terms 1/10, n/30 11 Purchased merchandise on account from Cora Co. $3,690 13 paid in full Gallagher Co. on account less a 2% discount. 13 Made cash sales for the week totaling $6,590 15 Received payment from Linton Corp. for invoice no. 372. 15 Paid semi-monthly salaries of $14,600 to employees. 17 Received payment from Wheeler for invoice no. 371 17 Sold merchandise on account to Delaney Co. $2,240, invoice no. 373, terms 1/10, n/30 19 Purchased equipment on account from Dozier Corp. $5,030

Solution

Cash Receipts Journal Date Account Credited Ref. Cash Dr. Sales Discounts Dr. Accounts Receivable Cr. Sales Revenue Cr. Other Acounts Cr. Cost of Goods Sold Dr. Inventory Cr. Jan. 6 Sales revenue 3450 3450 2070 Jan. 13 Sales revenue 6590 6590 3954 Jan. 15 Linton Corp. ? 4770 530 5300 Jan. 17 Wheeler ? 5890 5890 Jan. 20 Sales revenue 3010 3010 1806 Jan. 27 Sales revenue 4990 4990 2994 Jan. 30 Delaney Co. ? 2240 2240 30940 530 13430 18040 0 10824 (101) (414) (112) (401) (X) (505)(120) Cash Payments Journal Date Account Debited Ref. Other Accounts Dr. Accounts Payable Dr. Inventory Cr. Cash Cr. Jan. 4 Supplies 126 90 90 Jan. 13 Gallagher Co. ? 10800 216 10584 Jan. 15 Salaries and Wages Expense 726 14600 14600 Jan. 20 Phegley Co. ? 4100 82 4018 Jan. 31 Salaries and Wages Expense 726 12860 12860 27550 14900 298 42152 (X) (201) (120) (101)