Manny Corporation Has an Accounting System That Includes Five Journals

question 80

Essay

Manny Corporation has an accounting system that includes five journals: the sales, purchases, cash receipts, cash payments, and general journals. The following transactions occurred during the month of May.
May 2 Sold merchandise to Tom Smith on account, $80,000, terms 2/10, n/30.
7 Purchased merchandise from the Karen Ruth Company for $11,000, paying cash.
9 Purchased merchandise from Joan Wholesalers on account for $5,500, terms n/30.
11 Received payment from Tom Smith for the $80,000 invoice amount, less the 2% sales discount.
15 Purchased office equipment from Lew Supply Company for $50,000 on account.
16 Made a cash sale of $4,000 to Smithtown distributors.
17 Paid Joan Wholesalers for the $5,500 invoice.
19 Sold land for $9,000 cash. The original cost of the land was $9,900.
Required:
Prepare in general journal form) the journal entries necessary to record the above transactions in the month of May, and indicate in which special) journal they would have been recorded. Assume that Manny Corporation uses the periodic inventory system.

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Definitions:

Overhead Applied

The allocation of indirect costs to produced goods or services based on predetermined rates.

Work in Process Inventory

Refers to the unfinished goods in a manufacturing process that are not yet completed but are in the stage of being turned into finished products.

Cost of Goods Sold

The direct costs attributed to the production of the goods sold by a company, including materials and labor.

Raw Material Inventory

The total stock of basic materials awaiting processing into finished goods within a manufacturing or production facility.