Patel Rug Company had the following credit sales transactions during March 2008:

Patel Rug Company had the following credit sales transactions during March 2008:

Date

Customer

Quantity

Rug Style

Sales

Mar.

3

Samantha McGill

1

10 by 8 Chinese

$14,750

 

8

L. Smith

1

8 by 12 Persian

10,000

 

19

Paula Larkin

1

8 by 10 Indian

11,500

 

26

Amy Pugh

1

10 by 12 Persian

21,000

The March 1 inventory was $26,000, consisting of:

Quantity

Style

Cost per Rug

Total Cost

2

10 by 8 Chinese

$7,500

$15,000

2

8 by 12 Persian

$5,500

11,000

During March, Patel Rug Company purchased the following rugs from Lee Rug Importers:

Date

Quantity

Rug Style

Cost per Rug

Amount

Mar. 10

2

8 by 10 Indian

$ 6,000

$12,000

12

1

10 by 8 Chinese

10,500

10,500

21

3

10 by 12 Persian

16,500

49,500

The general ledger includes the following accounts:

Account

 

Number

Account

11

Accounts Receivable

12

Merchandise Inventory

21

Accounts Payable

41

Sales

51

Cost of Merchandise Sold

a. Record the sales in a two-column sales journal. Use the sales journal form shown in 1 at the end of this chapter. Begin with Invoice No. 80.

b. Record the purchases in a purchases journal. Use the purchases journal form shown in Appendix 1 at the end of this chapter.

c. Assume that you have posted the journal entries to the appropriate ledgers. Insert the correct posting references in the sales and purchases journals.

d. Determine the March 31 balance of Merchandise Inventory.