Selected accounts from the chart of accounts of Valente Company are shown below. 101 Cash...........201 Accounts Payable

Question:

Selected accounts from the chart of accounts of Valente Company are shown below.

101 Cash...........201 Accounts Payable

120 Merchandise Inventory...414 Sales Discounts

126 Supplies........505 Cost of Goods Sold

140 Land..........610 Advertising Expense

145 Buildings

The cost of all merchandise sold was 65% of the sales price. During October, Valente Company completed the following transactions.

Oct. 2 Purchased merchandise on account from Janet Company $12,000.

4 Sold merchandise on account to Erik Co. $5,600. Invoice no. 204, terms 2/10, n/30.

5 Purchased supplies for cash $60.

7 Made cash sales for the week totaling $6,700.

9 Paid in full the amount owed Janet Company less a 2% discount.

10 Purchased merchandise on account from Arduino Corp. $2,600.

12 Received payment from Erik Co. for invoice no. 204.

13 Returned $150 worth of damaged goods purchased on account from Arduino Corp. on

October 10.

14 Made cash sales for the week totaling $6,000.

16 Sold a parcel of land for $20,000 cash, the land’s original cost.

17 Sold merchandise on account to Ed’s Warehouse $3,900, invoice no. 205, terms 2/10, n/30.

18 Purchased merchandise for cash $1,600.

21 Made cash sales for the week totaling $6,000.

23 Paid in full the amount owed Arduino Corp. for the goods kept (no discount).

25 Purchased supplies on account from Paul Martin Co. $190.

25 Sold merchandise on account to David Corp. $3,800, invoice no. 206, terms 2/10, n/30.

25 Received payment from Ed’s Warehouse for invoice no. 205.

26 Purchased for cash a small parcel of land and a building on the land to use as a storage facility. The total cost of $26,000 was allocated $16,000 to the land and $10,000 to the building.

27 Purchased merchandise on account from Mary Co. $6,200.

28 Made cash sales for the week totaling $5,500.

30 Purchased merchandise on account from Janet Company $10,000.

30 Paid advertising bill for the month from the Gazette, $290.

30 Sold merchandise on account to Ed’s Warehouse $3,400, invoice no. 207, terms 2/10, n/30.

Valente Company uses the following journals.

1. Sales journal.

2. Single-column purchases journal.

3. Cash receipts journal with columns for Cash Dr., Sales Discounts Dr., Accounts Receivable Cr., Sales Cr., Other Accounts Cr., and Cost of Goods Sold Dr./Merchandise Inventory Cr.

4. Cash payments journal with columns for Other Accounts Dr., Accounts Payable Dr., Merchandise Inventory Cr., and Cash Cr.

5. General journal.

Instructions

Using the selected accounts provided:

(a) Record the October transactions in the appropriate journals.

(b) Foot and crossfoot all special journals.

(c) Show how postings would be made by placing ledger account numbers and check marks as needed in the journals. (Actual posting to ledger accounts is not required.)

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...