| ABC Company is a merchandising business. Below are the routing transactions for ABC Company for the month of December. |
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| Dec 1 | Paid rent for December, $8000. |
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| Dec 3 | Purchased merchandise from Goat Company for $7,000 under terms 1/15, n/30, FOB Shipping Point. |
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| Dec 4 | Paid $400 cash for freight charges on purchase of Dec 3. |
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| Dec 5 | Sold merchandise to Beaver company for $21,100 under
credit terms 2/10, n/60, FOB Shipping Point. The merchandise had a cost
of $8800. |
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| Dec 6 | Purchased merchandise from Duck Company for 27,500, under terms n/eom. |
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| Dec 8 | Received $23,000 on account from Warthog Company, no discount. This sale was made in November. |
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| Dec 9 | After negotiations with Goat Company concerning problems
with the merchandise purchased on Dec 3, ABC Company received an credit
memorandum from Goat Company granting an allowance of $1,000. |
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| Dec 10 | Paid part-time sales clerk for two weeks salary including the amount owed on December 1st, $3000. |
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| Dec 11 | Sold merchandise on account to Cow Company, terms 2/10, n/60, FOB destination, $22,000. The merchandise had a cost of $10,000. |
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| Dec 12 | Paid $350 cash for shipping charges related to the Dec 11 sale to Cow Company. |
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| Dec 13 | Paid the amount due to Goat Company for the Dec 3 purchase less the allowance granted. |
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| Dec 15 | Received balance due from Beaver Company for merchandise sold on Dec 5. |
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| Dec 16 | Cow company returned merchandse from the Dec 11 sale
that had cost ABC Company $1000 and been sold for $5,500. The
merchandise was restored to inventory. |
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| Dec 21 | Received amount due from Cow company for the Dec 11 sale less the sale return on Dec 16. |
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| Dec 23 | Paid advertising expense for ads running the last week of December, $800. |
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| Dec 24 | Paid part-time sales clerk for two weeks’ salary, $3000. |
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| Dec 27 | Purchased office supplies on account, $500. |
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| Dec 31 | Paid Duck Company amount due from the Dec 6 purchase. |
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| At the end of December, the following adjustment data were assembled. |
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| a | After a physical count of inventory, it was determined that $127,200 of inventory exists at December 31. |
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| b | 1% of sales is expected to be refunded. |
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| c | Estimated Cost of Merchandise that will be returned in the next year is $5500 |
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| d | Insurance Expired during the year, $2200. |
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| e | Office supplies on hand at Dec 31, $1250. |
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| f | Depreciation for December is $1400. |
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| g | Sales clerk earned $1500 of unpaid and unrecorded salary as of Dec 31. |