How to operate a merchandizing business


Response to the following problem:

City Retailers Inc. was incorporated on March 1, 2016 to operate a merchandizing business. All its sales on account are made according to the following terms: 2/10, n30.

Mar. 1 Issued share capital for $10,000 cash to Michael Smith, the incorporator and sole shareholder of the corporation

1 Paid Scotia Fixtures Inc. $4,000 for equipment

1 Purchased $2,100 of merchandize on account from Midlife Stores Corp. for terms 2/10, n30

2 Sold merchandize on account to Timmins Centres Ltd. For $2,000

2 Collected $300 for a cash sale made today to Clayton David Inc.

3 Purchased $500 of merchandize on account from Speedy Sales Co. for terms 1/10, n30

4 Sold merchandize on account to Northern Warehouse for $2,500

4 Timmins Centres Ltd. returned $200 of merchandize

5 Purchased $1,400 of merchandize on account from St Jean Wholesalers Corp. on account for terms n30

6 Received notification from Midlife Stores Corp. that $100 of defective merchandize included in the March 1 purchase and subsequently returned to Midlife did not need to be paid

6 Sold merchandize on account to Sault Rapids Corp. for $1,500

7 Purchased $600 of merchandize on account from Trent Stores Corporation for terms 2/15, n30

8 Received the amount due from Timmins Centres Ltd. (less adjustment, less discount)

10 Paid Speedy Sales Co. for the March 3 purchase (less discount)

11 Received a $7,500 loan from Second National Bank, due in 2017

12 Paid Peace Realty Corp. $1,000 for 2 months' rent, March and April (recorded as an asset)

12 Sold merchandize on account to James Bay Distributors Inc. for $700

13 Received the amount due from Northern Warehouse (less discount)

15 Paid Mitch Michaels $350 for commissions earned to date (recorded as Commissions Expense

15 Paid Midlife Stores Corporation $1,000 on account

15 Purchased $1,000 of merchandize on account from Lilydale Products Ltd. for terms 2/15, n30

18 Paid Trent Stores Corporation for half of the March 7 purchase (less discount on payment)

19 Collected $100 for a cash sale made today to Margaret Smith

20 Purchased $1,200 of merchandize on account from Delta Centres Inc. for terms n30

20 Paid $400 for a cash purchase from Copeland Distributors Inc.

20 Sold merchandize on account to Amigo Inc. for $600

21 Paid St Jean Wholesalers Corp. $700 on account

22 Received $500 on account from Sault Rapids Inc.

23 Paid Tri City Insurance Ltd. $2,400 for a 1-year insurance policy, effective March 1 (recorded as an asset)

24 Paid $300 for a cash purchase from Buster's Emporium (debited Purchases)

25 Sold merchandize on account to Pinehurst Novelties Inc. for $1,400

26 Purchased $700 of merchandize on account from Tres Bon Markets Ltd. for terms 2/10, n30

30 Paid Shelby Corp. $500 for deliveries to customers

30 Paid Mitch Michaels $400 for commissions earned to date

30 Paid PhoneU $75 for the monthly telephone bill

30 Paid Vision Visuals Ltd. $250 for advertizing materials used during the month

Required: Prepare journal entries to record the March transactions and necessary adjusting entries. Include general ledger account numbers and a brief description for each entry.

Request for Solution File

Ask an Expert for Answer!!
Managerial Accounting: How to operate a merchandizing business
Reference No:- TGS02089530

Expected delivery within 24 Hours