[BabiAngell]

a) Purchased merchandise for sale on Oct 1 for $3,600 to be paid by Oct 30
b) Sold merchandise for $900 cash on Oct 3. Merchandise cost Rose's $270.
c) Sold merchandise for $1,800 on credit on Oct 6. Merchandise cost Rose's $590.
d) Ordered $2,150 of merchandise on Oct 7 forom a supplier.
e) $400 of the merchandise purchased on Oct 1 spoiled on Oct 9 and had to be trashed, resulting in a spoilage expense.
f) Paid $1,800 on Oct 10 to suppliers from merchandise purchased Oct 1.
g) Received $1,200 on Oct 16 from customers for sales on Oct 6.

This is what I came up with but I'm not sure about it, please help


Assets = Liabilities + Owner’s Equity
=
Date A/Cs Cash Other
Assets + Contributed Capital Retained E


Oct 1 Merc $3,600
A/C Payable $3,600
Oct 3 Cash $900
Merc. -$900
Oct 3 COGS -$270
Merc Inv. -$270
Oct 6 A/C Recv $1,800
Sales Rev $1,800
Oct 6 Merc. Inv. $590
Oct COGS -$590
Oct 7 Merc $2,150
Oct A/C Payable $2,150
Oct 9 -$400 -400
Oct
Oct 10 Cash -$1,800
Oct -$1,800
Oct 16 Cash $1,200
Oct A/C Recv -$1,200

Ending Amounts $ $ $ $ $

[morgaine300]

Let me get this straight... you're into merchandising, but you're supposed to do this in a tabular form, using the accounting equation like that? Not debits & credits? That's odd, cause they usually only do that in a very first chapter before they ever get to merchandising. (But there always has to be some oddball book out there.)

Oct 3 Cash $900
Merc. -$900
Oct 3 COGS -$270
Merc Inv. -$270
Oct 6 A/C Recv $1,800
Sales Rev $1,800
Oct 6 Merc. Inv. $590
Oct COGS -$590

The two above should be almost the same, except for the 3rd you got cash and for the 6th it goes into A/R. The rest should be the same because you still sold inventory, and you still have to recognize the expense.

Oct. 3 - you cannot take the retail value out of inventory. It goes in at cost and must come out at cost. (i.e. the 2nd entry takes it out of inventory at cost and expenses it to COGS.) It's Sales Revenue just like the 6th.

Oct. 6 - Correct, except that the inventory is a negative. (It's coming out of inventory and that equation has to stay balanced, so a + left and - right doesn't work.)

Oct 7 Merc $2,150
Oct A/C Payable $2,150

There's no entry for this because there's no "economic event." You just ordered the inventory but nothing has actually taken place. You can't add it to inventory because you haven't gotten it, and you don't owe it yet... cause you haven't gotten it.

Oct 9 -$400 -400
Oct

If you were attempting to put this under columns, it doesn't work. (It looks like columns when you type it but they disappear when it posts.) The spoilage expense is just that: an expense. i.e. coming out of the retained earnings column like your other expenses. And since the inventory is a goner, it's coming out of inventory.

Oct 10 Cash -$1,800
Oct -$1,800

Accounts Payable. Go back to the Oct 1 entry. You purchased it on credit, so it went into acct payable, right? And now you're paying it, so it comes back off payables.

Any I didn't include are correct.