Razy Lamborghini, a former professional snack production, manufactures Snack Down Co.

at
Malang. At the beginning of March, the ledger of Lamborghini showed cash of $500,000 and
Razy Lamborghini, Capital of $500,000.

March 1 Purchased merchandise on account from Sue Supply $8,000, terms 2/10, n/30.

Merchandise Inventory......................... 8,000

Accounts Payable .........................8,000

2 Sold merchandise on account $4,000 to Mr. Ueno, terms 1/10, n/30. The cost
of the merchandise sold was $3,100.

Accounts Receivable............................4,000
Sales.................................................4,000

Cost of Goods Sold...............................3,100

Merchandise Inventory................3,100

3 Received credit from Sue Supply for merchandise returned $600.

Accounts Payable.....................................$600
Merchandise Inventory..................$600

4 Received credit from Sue Supply for merchandise returned $100.

Accounts Payable.....................................$100
Merchandise Inventory..................$100

5 Received collection in full, less discounts, from customers billed on sales

$4,000 on March 2.

Cash ($4,000 – $40)................................3,960

Sales Discounts ($4,000 X 1%) ..........40
Accounts Receivable ...................4,000

6 Paid Sue Supply in full, less discount.

Accounts Payable ($8,000 – $700)..........7300

Merchandise Inventory...............................146
($7,400 X 2%)
Cash...................................................7,446
 7 Purchased supplies for cash $900.

Supplies ....................................................900
Cash...................................................900

10 Purchased merchandise for cash 2,700.

Merchandise Inventory.........................2,700
Cash...................................................2,700

11 Received refund for poor quality merchandise from supplier on cash

purchase on $230.

Cash............................................................230
Merchandise Inventory................230

12 Withdrew $2,500 cash for personal use by Lamborghini.

Lamborghini, Drawing.................................. 2,500

Cash................................................... 2,500

13 Borrowed $50,000 from the bank by signing a note.

Cash.............................................................................. 50,000
Notes Payable ................................................... 50,000

14 Purchased merchandise from Chilla Distributors $2,500, FOB shipping point,

terms 2/10, n/30.

Merchandise Inventory.........................2,500
Accounts Payable .........................2,500

15 Advertising costs paid in cash, $3,000.

Advertising Expense..................................... 3,000

Cash......................................................... 3,000
 16 Paid freight on March 14 purchase $250.

Merchandise Inventory.........................250
Cash...................................................250

17 Sold merchandise for cash $6,200. The merchandise sold had a cost of
$4,600.

Cash ..............................................................6,200
Sales.....................................................6,200

Cost of Goods Sold..................................4,600

Merchandise Inventory ..................4,600

18 Purchased merchandise from Anin Inc. $1,000, FOB destination, terms 2/10,
n/30.

Merchandise Inventory ...........................1,000

Accounts Payable............................1,000

19 Paid Chilla Distributors in full, less discount.

Accounts Payable.....................................2,500
Merchandise Inventory ..................50
($2,500 X 2%)
Cash .....................................................2,450

21 Made refunds to cash customers for defective merchandise $100. The

returned merchandise had a scrap value of $20.

Sales Returns and Allowances ............100

Cash .....................................................100

Merchandise Inventory ...........................20

Cost of Goods Sold.........................20

23 Sold merchandise on account $1,600, terms n/30. The cost of the

merchandise sold was $1,120.

Accounts Receivable...............................1,600
Sales.....................................................1,600
Cost of Goods Sold..................................1,120
Merchandise Inventory ..................1,120

24 Withdrew $7,200 cash for personal use by Lamborghini.

Lamborghini, Drawing.................................. 7,200

Cash................................................... 7,200

25 Purchased basic office supplies for $7,200 cash.

Office Supplies....................................... 7,200

Cash ................................................ 7,200

26 Purchased more office supplies for $9,200 on account.

Office Supplies....................................... 9,200

Accounts Payable....................... 9,200

27 Purchased supplies for $12,000 cash.

Supplies…………………………………12,000
Cash………………………………12,000

28 Paid $6,000 for utilities.

Utilities Expenses…………………………. 6,000

Cash………………………………..6,000

29 Paid $1,500 cash for a one-year insurance policy.

Prepaid Insurance ....................................... 1,500

Cash ......................................................1,500

31 Paid $8,700 for employee salaries.

Salaries Expenses…………………………….8,700
Cash…………………………………..8,700