Robert Sales Corp. was incorporated on May 1, 2016 to operate a merchandizing business. All its sales on account are made according to the following terms: 2/10, n30. Its transactions during May 2016 are as follows:
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May |
1 |
Issued share capital for $2,000 cash to Rob Robert, the incorporator and sole shareholder of the corporation |
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1 |
Received $10,000 from the First Chance Bank as a demand bank loan |
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1 |
Paid Viva Corp. $1,500 for 3 months’ rent in advance—$500 for each of May, June, and July (recorded as an asset) |
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1 |
Paid Avanti Equipment Ltd. $5,000 for equipment |
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1 |
Purchased $5,000 of merchandize on account from Renaud Wholesalers Ltd. for terms 2/10, n30 |
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1 |
Sold merchandize on account to North Vancouver Distributors for $2,500 |
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2 |
Purchased $1,800 of merchandize on account from Lilydale Products Ltd. for terms n30 |
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2 |
Sold merchandize on account to Tarrabain Sales Inc. for $2,000 |
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3 |
Collected $500 for a cash sale made today to Smith Weston Ltd. |
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5 |
Paid All West Insurance Inc. $1,200 for a 1-year insurance policy, effective May l (recorded as an asset) |
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5 |
Sold merchandize on account to Trent Stores Corporation for $1,000 |
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6 |
Tarrabain Sales Inc. returned $500 of merchandize: reduced the related Account Receivable |
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8 |
Received a memo from Renaud Wholesalers Ltd. to reduce its account payable by $300 for defective merchandize included in the May 1 purchase and returned subsequently to Renaud |
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8 |
Purchased $2,800 of merchandize on account from Pinegrove Novelties Ltd. for terms 2/15, n30 |
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9 |
Received the amount due from North Vancouver Distributors from the May 1 sale (less discount) |
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9 |
Paid Renaud Wholesalers Corp. for the May 1 purchase (less discount) |
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10 |
Sold merchandize on account to Eastern Warehouse for $400 |
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11 |
Received the amount due from Tarrabain Sales Inc. (less the May 6 memo and discount) |
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13 |
Paid Fast Delivery Corporation $100 for Transportation-In |
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15 |
Purchased $1,500 of merchandize on account from James Bay Distributors Inc. for terms 2/10, n30 |
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15 |
Sold merchandize on account to Ransom Outlets Inc. for $1,500 |
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15 |
Paid $500 in commissions to Yvonne Smith, re: sales invoices nos. 1, 2, and 3 |
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19 |
Paid Lilydale Products Inc. for the May 2 purchase |
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19 |
Purchased $1,200 of merchandize on account from Midlife Stores Corp. for terms 1/10, n30 |
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22 |
Purchased $600 of merchandize on account from Speedy Sales Co. for terms n30 |
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22 |
Paid to Pinegrove Novelties Inc. for the May 8 purchase (less discount) |
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24 |
Paid to In Transit Corporation $150 for Transportation-In (fob shipping point) |
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25 |
Sold merchandize on account to Timmins Centres Ltd. for $900 |
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26 |
Received the amount due from Trent Stores Corporation |
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27 |
Paid $200 to Intown Deliveries Ltd. for deliveries made to customers |
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28 |
Collected $300 for a cash sale made today to Betty Regal |
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28 |
Made a $200 cash purchase from Joe Balla Sales Inc. today; issued cheque #11 (debited purchases) |
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28 |
Sold merchandize on account to Sault Rapids Corp. for $900 |
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29 |
Purchased $100 of merchandize on account from Amigos Inc. |
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29 |
Paid Intown Deliveries Ltd. $300 for deliveries to customers (debited account 620) |
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29 |
Paid Main Force Advertizing Agency $400 for advertizing materials used during May |
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29 |
Paid State Hydro $100 for electricity |
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29 |
Paid Yvonne Smith $350 commission, re: sales invoices nos. 4, 5, 6, and 7 |
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30 |
Collected $l,000 on account from Ransom Outlets Inc. |
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31 |
Paid Midlife Stores Corp. $700 on account |
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31 |
Inventory on hand was counted and valued at $5,000 |
Assume Robert uses the periodic inventory system.
Required: Prepare journal entries to record the May transactions and any month-end adjusting entries needed. Include general ledger account numbers and a brief description for each entry.
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