Selected accounts from the chart of accounts of Zu Company are shown below:
112 Accounts receivable
120 Merchandise inventory
201 Accounts payable
505 Cost of goods sold
610 Advertising expense
The company uses a perpetual inventory system. The cost of all merchandise sold was 65% of the sales price.
During October, Zu Company completed the following transactions:
Oct. 2 Purchased merchandise on account from Madison Co., $5,800.
4 Sold merchandise on account to Petro Corp., $8,600, invoice no. 204.
5 Purchased supplies on account from Frey Co., $315.
7 Made cash sales for the week that totaled $9,610.
9 Paid the Madison Co. account in full.
10 Purchased merchandise on account from Chen Corp., $4,900.
12 Received payment from Petro Corp. for invoice no. 204.
13 Issued a debit memorandum to Chen Corp. and returned $260 of damaged goods.
14 Made cash sales for the week that totaled $8,810.
16 Sold a parcel of land for $45,000 cash, the land's book value.
17 Sold merchandise on account to Trudeau Co., $5,530, invoice no. 205.
18 Purchased merchandise for cash, $2,215.
21 Made cash sales for the week that totalled $8,640.
23 Paid in full the Chen Corp. account for the goods kept.
25 Purchased supplies on account from Frey Co., $260.
25 Sold merchandise on account to Golden Corp., $5,520, invoice no. 206.
25 Received payment from Trudeau Co. for invoice no. 205.
26 Purchased for cash a small parcel of land and a building on the land to use as a storage facility.
Of the total cost of $45,000, $26,000 was allocated to the land and $19,000 to the building.
27 Purchased merchandise on account from Schmid Co., $9,000.
28 Made cash sales for the week that totaled $9,320.
30 Purchased merchandise on account from Madison Co., $16,200.
30 Paid advertising bill for the month from The Gazette, $600.
30 Sold merchandise on account to Trudeau Co., $5,200, invoice no. 207.
Zu Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal.
(a) Record the October transactions in the appropriate journals.
(b) Foot and cross-foot all special journals.
(c) Show how postings would be made by placing ledger account numbers and check marks as needed in the journals. (Actual posting to ledger accounts is not required.)