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The following were selected from among the transactions complete by Wild Adventures Company during December of the current year
The following were selected from among the transactions complete by Wild Adventures Company during December of the current year.
Dec. 3. Purchased merchandise on account from Miramar Co., list price $45,000, trade discount 20% , terms FOB shipping point, 2/10, n/30, with prepaid freight of $1,200 added to the invoice.
5. Purchased merchandise on account from Grand Canyon Co., $19,000, terms FOB destinations, 2/10, n/30.
6. Sold merchandise on account to Arches Co., list price $30,000, trade discount 25% terms 2/10, n/30. The cost of the merchandise sold was $14,000.
7. Returned $3,000 of merchandise purchased on December 5 from Grand Canyon Co.
13. Paid Miramar Co. on account for purchase of December 3, less discount.
15. Paid Grand Canyon Co. on account for purchase of December 5, less return of December 7 and discount.
16. Received cash on account from sale of December 6 to Arches Co., less discount.
19. Sold merchandise on MasterCard, $41,950. The cost of the merchandise sold was $25,000.
22. Sold merchandise on account to Yellowstone River Co., $20,000 terms 2/10, n/30. The cost of the merchandise sold was $9,000.
23. Sold merchandise for cash, $57,500. The cost of the merchandise sold was $34,500.
28. Received merchandise returned by Yellowstone River Co. from sale on December 22, $4,000. The cost of the returned merchandise was $1,800.
31. Paid MasterCard service fee of $1,700.
Instructions
Journalize the transaction.
Expert Solution
Dec. 3 Merchandise Inventory.................................................. 37,200
Accounts Payable x Miramar Co. ............................ 37,200
[$45,000 – ($45,000 × 20%)] = $36,000;
$36,000 + $1,200 = $37,200.
5 Merchandise Inventory.................................................. 19,000
Accounts Payable x Grand Canyon Co. ................. 19,000
6 Accounts Receivable x Arches Co. ............................... 22,500
Sales......................................................................... 22,500
[$30,000 – ($30,000 × 25%)] = $22,500.
6 Cost of Merchandise Sold.............................................. 14,000
Merchandise Inventory............................................ 14,000
7 Accounts Payable x Grand Canyon Co. ....................... 3,000
Merchandise Inventory............................................ 3,000
13 Accounts Payable x Miramar Co. .................................. 37,200
Cash.......................................................................... 36,480
Merchandise Inventory............................................ 720
15 Accounts Payable x Grand Canyon Co. ....................... 16,000
Cash.......................................................................... 15,680
Merchandise Inventory............................................ 320
16 Cash................................................................................ 22,050
Sales Discounts.............................................................. 450
Accounts Receivable x Arches Co. ......................... 22,500
19 Cash................................................................................ 41,950
Sales......................................................................... 41,950
19 Cost of Merchandise Sold.............................................. 25,000
Merchandise Inventory............................................ 25,000
22 Accounts Receivable x Yellowstone River Co. ............ 20,000
Sales......................................................................... 20,000
22 Cost of Merchandise Sold.............................................. 9,000
Merchandise Inventory............................................ 9,000
23 Cash................................................................................ 57,500
Sales......................................................................... 57,500
Dec. 23 Cost of Merchandise Sold.................................................. 34,500
Merchandise Inventory................................................. 34,500
28 Sales Returns and Allowances............................................ 4,000
Accounts Receivable x Yellowstone River Co........ 4,000
28 Merchandise Inventory....................................................... 1,800
Cost of Merchandise Sold............................................ 1,800
31 Credit Card Expense.......................................................... 1,700
Cash.............................................................................. 1,700
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