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The following transactions wereselected from the records of Evergreen Company:
July 12

Sold merchandise to Wally Butler, who paid the $1,000 purchasewith cash. The goods cost Evergreen Company $600.
15

Sold merchandise to Claudio’s Chair Company at a selling priceof $5,000 on terms 3/10, n/30. The goods cost Evergreen Company$3,500.
20

Sold merchandise to Otto’s Ottomans at a selling price of $3,000on terms 3/10, n/30. The goods cost Evergreen Company $1,900.
23 Collected payment from Claudio’sChair Company from the July 15 sale.
Aug.25 Collected payment from Otto’sOttomans from the July 20 sale.
Required:

Prepare journal entries to record the transactions, assumingEvergreen Company uses a perpetual inventory system. (If noentry is required for a transaction/event, select "No Journal EntryRequired" in the first account field.)

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Lelia Lubowitz
Lelia LubowitzLv2
28 Sep 2019

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O'Quinn Co. distributes suitcases to retail stores and extendscredit terms of 1/10, n/30 to all of its customers. At the end ofJune, O'Quinn's inventory consisted of suitcases costing $2,082.During the month of July the following merchandising transactionsoccurred.
July 1 Purchased suitcases on account for $3,514 from EmersonManufacturers, FOB destination, terms 2/10, n/30. The appropriateparty also made a cash payment of $122 for freight on thisdate.
3 Sold suitcases on account to Straume Satchels for $2,801. Thecost of suitcases sold is $1,681.
9 Paid Emerson Manufacturers in full.
12 Received payment in full from Straume Satchels.
17 Sold suitcases on account to The Going Concern for $2,730. Thecost of the suitcases sold was $1,638.
18 Purchased suitcases on account for $1,734 from HumeManufacturers, FOB shipping point, terms 1/10, n/30. Theappropriate party also made a cash payment of $121 for freight onthis date.
20 Received $343 credit (including freight) for suitcases returnedto Hume Manufacturers.
21 Received payment in full from The Going Concern.
22 Sold suitcases on account to Desmond's for $3,006. The cost ofsuitcases sold was $1,804.
30 Paid Hume Manufacturers in full.
31 Granted Desmond's $241 credit for suitcases returned costing$145.

O'Quinn's chart of accounts includes the following: No. 101 Cash,No. 112 Accounts Receivable, No. 120 Merchandise Inventory, No. 201Accounts Payable, No. 401 Sales, No. 412 Sales Returns andAllowances, No. 414 Sales Discounts, No. 505 Cost of GoodsSold.

Instructions

Journalize the transactions for the month of July for O'Quinn usinga perpetual inventory system. (For multiple debit/credit entries,list amounts from largest to smallest e.g. 10, 5, 3, 2. Roundanswers to 0 decimal places, e.g. 125.)

Date Description/Account Debit Credit
July 1

July 3

(To record credit sale to Straume Satchels.)


(To record cost of merchandise sold.)
July 9


July 12


July 17

(To record credit sale to The Going Concern.)


(To record cost of merchandise sold.)
July 18

(To record goods purchased.)


(To record freight on goods purchased.)
July 20

July 21


July 22

(To record credit sale to Desmond's.)


(To record cost of merchandise sold.)
July 30

July 31

(To record credit to Desmond's for returned goods.)


(To record cost of goods returned.)

The following information isavailable regarding a sales transaction between AAA Company and BBBCorporation.

a.On July 2, 2014, AAA Company sold toBBB Corporation merchandise with a sales price of $6,000 (cost$3,600) with terms of 2/10. n/30 f.o.b. shipping point.

b.AAA Company estimates thatmerchandise with a sales value of $600 will be returned.

c.An invoice totaling $120, termsn/30, was received by BBB Corporation on July 6 from XYZ DeliveryService for the freight cost.

d.Upon receipt of the goods, on July3, BBB Corporation notified AAA Comapy that $250 of merchandisecontained flaws. The same day, AAA Company issued a credit memocovering the defective merchandise and asked that it be returned atAAA’s expense.

e.Management at AAA Company estimatesthe returned items have a fair value of $100. The freight on thereturned merchandise was $20 paid by AAA Company on July 7.

f.On July 12, AAA Company received acheck for the balance due from BBB Corporation.

Using the attached T-account template,prepare AAA Company’s journal entries, in T-account format, torecognize all the events listed above.

Note: AAA Company’s policy is torecord sales and receivables at the gross selling price.

Please answer in T account

Exercise 7-6 Presented below is information from Perez ComputersIncorporated. July 1 Sold $22,300 of computers to Robertson Companywith terms 3/15, n/60. Perez uses the gross method to record cashdiscounts. 10 Perez received payment from Robertson for the fullamount owed from the July transactions. 17 Sold $227,500 incomputers and peripherals to The Clark Store with terms of 2/10,n/30. 30 The Clark Store paid Perez for its purchase of July 17.Prepare the necessary journal entries for Perez Computers. (If noentry is required, select "No Entry" for the account titles andenter 0 for the amounts. Credit account titles are automaticallyindented when the amount is entered. Do not indent manually.) DateAccount Titles and Explanation Debit Credit July 1 July 10 July 17July 30 Exercise 7-6 Presented below is information from PerezComputers Incorporated. July 1 Sold $22,300 of computers toRobertson Company with terms 3/15, n/60. Perez uses the grossmethod to record cash discounts. 10 Perez received payment fromRobertson for the full amount owed from the July transactions. 17Sold $227,500 in computers and peripherals to The Clark Store withterms of 2/10, n/30. 30 The Clark Store paid Perez for its purchaseof July 17. Prepare the necessary journal entries for PerezComputers. (If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts. Credit account titlesare automatically indented when the amount is entered. Do notindent manually.) Date Account Titles and Explanation Debit CreditJuly 1 July 10 July 17 July 30

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