Appendix I
Review Exercise Solutions
414
Chapter 7 Appendix Review Exercise—Solutions
Part 1
a) December transactions for George’s Gardening Supplies
JOURNAL Page 1
Date
2016
Account Title and Explanation
Debit Credit
Dec 3 Inventory
50,000
Accounts Payable
50,000
Purchased inventory on account
Dec 6 Freight-In
200
Cash
200
Paid freight charges
Dec 8 Accounts Payable
2,000
Purchase Returns and Allowances
2,000
Purchase return
Dec 11 Accounts Payable
48,000
Purchase Discounts
960
Cash
47,040
Paid supplier and took discount
b) December transactions for Michael’s Distributing
JOURNAL Page 1
Date
2016
Account Title and Explanation
Debit Credit
Dec 3 Accounts Receivable
50,000
Sales Revenue
50,000
Sold inventory on account
Dec 6 Freight Out
200
Cash
200
Paid freight charges
Dec 8 Sales Returns and Allowances
2,000
Accounts Receivable
2,000
Customer returned incorrect merchandise
Dec 11 Cash
47,040
Sales Discounts
960
Accounts Receivable
48,000
Received payment from customer
