Assignment 3

Okay, let's tackle these accounting problems one by one.
Problem 1: Montalvo Company - Prepare a Sales Journal
A sales journal is used to record only sales of merchandise on account. Cash sales are recorded in the cash receipts journal, and sales of other assets (like equipment) are recorded in the general journal.
Here are the transactions relevant to the Sales Journal:

Sept. 2: Sold merchandise on account to T. Hossfeld, invoice no. 101, $720, terms n/30. The cost of the merchandise sold was $420.

Sept. 21: Sold merchandise on account to P. Lowther, invoice no. 102 for $800, terms 2/10, n/30. The cost of the merchandise sold was $480.


Transactions NOT included in the Sales Journal:

Sept. 10: Purchase of merchandise (goes in Purchases Journal or General Journal if no Purchases Journal).

Sept. 12: Purchase of office equipment (goes in General Journal).

Sept. 25: Purchase of merchandise (goes in Purchases Journal or General Journal).

Sept. 27: Sold merchandise for cash (goes in Cash Receipts Journal).


Sales Journal
Montalvo Company
| Date   | Account Debited (Customer) | Invoice No. | P.R. | Accounts Receivable Dr. / Sales Revenue Cr. | Cost of Goods Sold Dr. / Merchandise Inventory Cr. |
| :----- | :------------------------- | :---------- | :--- | :---------------------------------------- | :--------------------------------------------------- |
| Sept. 2 | T. Hossfeld                | 101         |      | $720                                      | $420                                                 |
| Sept. 21| P. Lowther                 | 102         |      | $800                                      | $480                                                 |
| Totals|                            |             |      | $1,520                                | $900                                             |
P.R. stands for Posting Reference, which would be filled in when these amounts are posted to the general ledger and subsidiary ledgers.

Problem 2: Velasquez Company - Journalize the transactions in the general journal.
The general journal is used for transactions that don't fit into specialized journals (like sales, purchases, cash receipts, or cash payments journals). All the transactions listed for Velasquez Company will be recorded in the general journal. We'll assume a perpetual inventory system because the cost of returned merchandise is given.
General Journal
Velasquez Company
| Date   | Account Titles and Explanation                                | P.R. | Debit   | Credit  |
| :----- | :------------------------------------------------------------ | :--- | :------ | :------ |
| Mar. 2 | Equipment                                                     |      | $9,400  |         |
|        |      Accounts Payable - Chang Company        |      |         | $9,400  |
|        |      (To record purchase of equipment on account) |      |         |         |
|        |                                                               |      |         |         |
| Mar. 5 | Accounts Payable - Lyden Company                              |      | $410    |         |
|        |      Merchandise Inventory                |      |         | $410    |
|        |      (To record credit for merchandise damaged in shipment) |      |         |         |
|        |                                                               |      |         |         |
| Mar. 7 | Sales Returns and Allowances                                  |      | $400    |         |
|        |      Accounts Receivable - Higley Company   |      |         | $400    |
|        |      (To record merchandise returned by customer) |      |         |         |
|        |                                                               |      |         |         |
| Mar. 7 | Merchandise Inventory                                         |      | $260    |         |
|        |      Cost of Goods Sold                     |      |         | $260    |
|        |      (To record cost of merchandise returned to inventory) |      |         |         |
Let me know if you'd like any clarification on these entries!