Can someone help me journalize my financial accounting assignment?
2016-10-30T18:41:25Z
June 1 Purchased books on account for $1,300 from Kline Publishers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $40 for the freight on this date. 3 Sold books on account to Reading Rainbow for $2,700. The cost of the books sold was $1,620. 6 Received $200 credit for books returned to Kline Publishers. 9 Paid Kline Publishers in full, less discount. 15 Received payment in full from Reading Rainbow.
Prof2016-10-31T04:07:20Z
Journalizing transactions is a simple matter of deciding what took place in an exchange. You record what you received and you record what you gave up. It makes no sense to try to memorize journal entries. The idea is to analyze what was exchanged. You received or gave up assets and you use the debit and credit rules to record that. You incurred a liability (gave a promise to pay later) or you got your promise back because you discharged the liability. Again a credit or debit. Similarly with capital. You issued stock for cash so you received cash (a debit) and record a credit in owners’ equity representing the owner’s interest in the business assets. Or bought back stock giving up cash (a credit) and reducing the owner’s interest in the business (a debit in a capital account). You increase capital (credit revenue) by providing a service or product. You decreases capital (debit an expense) by using up assets or services. As long as you understand what was exchanged, you can decide what to debit and credit.
Beyond these basic concepts you have to learn more advanced issues, such as deciding how an exchange affects accounts that facilitate decision making. For example, when you buy goods on account you debit accounts payable, but if you eventually pay less than the amount recorded and still eliminate the entire payable, you credit another account (purchase discounts taken) because the original purchase did not cost as much as originally recorded. You also have to learn how to handle purchases and sales of merchandise because managers have decided to use the periodic or perpetual inventory system, each of which creates its own accounting procedures.
So for June 1, you exchanged a promise to pay the seller later for merchandise you received now. There was an exchange and you have to record what you received (book inventory) and what you gave up (a promise to pay later, normally called Accounts Payable). Once you understand what was exchanged it is easy to decide what to debit and what to credit. When you sell merchandise, you made an exchange with a customer. What did you receive, and what did you give in exchange? Here you have to understand that sales of merchandise require special treatment, depending on the inventory system used. You do not record
dr. Cash or Accounts Receivable cr. . . .Book inventory
Instead, to provide management with goo decision making information, you record
dr. .Cash or Accounts Receivable cr. . . . .Sale Revenue
and if you are using a perpetual inventory system you record
dr. Cost of Goods sold cr. . . . . Book inventory.
I've given you the help you wanted, but now you have to do the work, because it is the only way to learn accounting. If you show your entries here, someone will be glad to look them over and tell you if you did them correctly.
this is the rest of the problem. 17 Sold books on account to Blanco Books for $2,000. The cost of the books sold was $1,200. 20 Purchased books on account for $1,100 from Dietz Publishers, FOB destination, terms 1/15, n/30. The appropriate party also made a cash payment of $40 for the freight on this date.24 Received payment in full from Blanco Books. 26 Paid Dietz Publishers in full, less discount. 28 Sold books on account to Reddy Bookstore for $1,300. The cost of the books sold was $780. 30 Granted Reddy Bookstore $150 credit for books returned costing $90.