Problem 1
Date
(a)
(b)
( c)
Account title and Explanation
Merchandise Inventory
Accounts Payable
Accounts Payable
Merchandise Inventory
Accounts Payable
Merchandise Inventory
Cash
Debit
Credit
40,000
40,000
4,000
4,000
36,000
720
35,280
Problem 2
Journal entries for Erving Company
Date
Account title and explanation
Debit
Accounts Receivable
Sales
900
Cost of Goods Sold
Merchandise Inventory
600
Credit
900
600
Journal entries for Farley Enterprises
Date
Account title and explanation
Merchandise Inventory
Accounts Payable
Debit
Credit
900
900
Problem 3
Date
13-May
Account title and explanation
Debit
Sales
Accounts Receivable
264
Cost of Goods Sold
Merchandise Inventory
150
Credit
264
150
16-May
23-May
Sales Returns and Allowances
Accounts Receivable
44
Merchandise Inventory
Cost of Goods Sold
Cash
Sales Discount (220 x 1%)
Accounts Receivable
25
44
25
218
2
220