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ACCT 121 Lecture Notes - Lecture 2: Income Statement, Uptodate

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School
Mercy College
Department
Accounting
Course
ACCT 121
Professor
Denise Stefano

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Document Summary

2. in the reference column of the journal, write the account number to which the. The procedure of transferring journal entries to the ledger accounts is called posting. This phase of the recording process accumulates the effects of journalized transactions into the individual accounts. 1. in the ledger, in the appropriate columns of the account(s) debited, enter the. 4. in the reference column of the journal, write the account number to which the. That is, the company should post all the debits and credits of one journal entry before proceeding to the next journal entry. Postings should be made on a timely basis to ensure that the ledger is up-to-date. The explanation space of the ledger account is used infrequently because an explanation already appears in the journal. Chart of accounts: the number and type of accounts differ for each company. The number of accounts depends on the amount of detail management desires.

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Related Questions

Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Ledgers

AquaFresh Water Testing Service was established on April 16. AquaFresh uses field equipment and field supplies (chemicals and other supplies) to analyze water for unsafe contaminants in streams, lakes, and ponds. Transactions related to purchases and cash payments during the remainder of April are as follows:

April 16. Issued Check No. 1 in payment of rent for the remainder of April, $3,500.
April 16. Purchased field supplies on account from Hydro Supply Co., $5,340.
April 16. Purchased field equipment on account from Pure Equipment Co., $21,450.
April 17. Purchased office supplies on account from Best Office Supply Co., $510.
April 19. Issued Check No. 2 in payment of field supplies, $3,340, and office supplies, $400.
Post the journals to the accounts payable subsidiary ledger.
April 23. Purchased office supplies on account from Best Office Supply Co., $660.
April 23. Issued Check No. 3 to purchase land, $140,000.
April 24. Issued Check No. 4 to Hydro Supply Co. in payment of April 16 invoice, $5,340.
April 26. Issued Check No. 5 to Pure Equipment Co. in payment of April 16 invoice, $21,450.
Post the journals to the accounts payable subsidiary ledger.
April 30. Acquired land in exchange for field equipment having a cost of $12,000.
April 30. Purchased field supplies on account from Hydro Supply Co., $7,650.
April 30. Issued Check No. 6 to Best Office Supply Co. in payment of April 17 invoice, $510.
April 30. Purchased the following from Pure Equipment Co. on account: field supplies, $1,340, and field equipment, $4,700.
April 30. Issued Check No. 7 in payment of salaries, $29,400.
Post the journals to the accounts payable subsidiary ledger.

Required:

1. Journalize the transactions (in chronological order as presented in the data) for April. Use a purchases journal and a cash payments journal, and a two-column general journal. Use debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:

11 Cash 19 Land
14 Field Supplies 21 Accounts Payable
15 Office Supplies 61 Salary Expense
17 Field Equipment 71 Rent Expense

At the points indicated in the narrative of transactions, post to the following accounts in chronological order in the accounts payable subsidiary ledger:

Best Office Supply Co.
Hydro Supply Co.
Pure Equipment Co.

For those boxes in which no entry is required, leave the box blank. If no other account is needed in the "Other Accounts Dr." column select "No Entry Required".

PURCHASES JOURNAL PAGE 1
Date Account Credited Post. Ref. Accounts Payable Cr. Field Supplies Dr. Office Supplies Dr. Other Accounts
Dr.		 Post.
Ref.		 Amount
April 16 Hydro Supply Co. ? No Entry Required
April 16 Pure Equipment Co. ? Field Equipment
April 17 Best Office Supply Co. ? No Entry Required
April 23 Best Office Supply Co. ? No Entry Required
April 30 Hydro Supply Co. ? No Entry Required
April 30 Pure Equipment Co. ? Field Equipment
April 30
CASH PAYMENTS JOURNAL PAGE 1
Date Ck. No. Account Debited Post. Ref. Other Accounts
Dr.		 Accounts
Payable Dr.		 Cash Cr.
April 16 Rent Expense
April 19 Field Supplies
Office Supplies
April 23 Land
April 24 Hydro Supply Co. ?
April 26 Pure Equipment Co. ?
April 30 Best Office Supply Co. ?
April 30 Salary Expense
April 30 Total
JOURNAL PAGE 1
Date Description Post. Ref. Debit Credit
April 30 Land
Field Equipment

2. Post the individual entries in chronological order (Other Accounts columns of the purchases journal and the cash payments journal and both columns of the general journal) to the appropriate general ledger accounts. Post to the subsidiary ledger in chronological order. When posting to the general ledger, post in chronological order. However, if there is more than one entry on the same date, post transactions from the purchases journal first, then the cash payments journal before posting from the general journal.

3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger.

For those boxes in which no entry is required, leave the box blank.

ACCOUNTS PAYABLE SUBSIDIARY LEDGER
Date Item Post. Ref. Debit Credit Balance
Account: Best Office Supply Co.
April 17
April 23
April 30
Account: Hydro Supply Co.
April 16
April 24
April 30
Account: Pure Equipment Co.
April 16
April 26
April 30


Post transactions in chronological order. However, if there is more that one transaction on the same date, post from the purchases journal first, then from the cash payments journal before posting from the general journal. (Because the problem does not include transactions related to cash receipts, the cash account in the ledger will have a credit balance.)

GENERAL LEDGER
Balance
Date Item Post. Ref. Debit Credit Dr. Cr.
Account: Cash #11
April 30
Account: Field Supplies #14
April 19
April 30
Account: Office Supplies #15
April 19
April 30
Account: Field Equipment #17
April 16
April 30
April 30
Account: Land #19
April 23
April 30
Account: Accounts Payable #21
April 30
April 30
Account: Salary Expense #61
April 30
Account: Rent Expense #71
April 16

4. Prepare a schedule of the accounts payable creditor balances.

AQUAFRESH WATER TESTING SERVICE
Accounts Payable Creditor Balances
April 30
Best Office Supply Co. $
Hydro Supply Co.
Pure Equipment Co.
Total accounts payable $

5. All are reasons why AquaFresh might consider using a subsidiary ledger for the field equipment EXCEPT:

To secure lower pricing on equipment purchases

On October 3, 2018, Regal Company purchased $4,125 of supplieson account. In RegalĆ¢Ā€Ā™s chart of accounts, the supplies account isNo. 15, and the Accounts Payable account is No. 21.

Required:
A. Journalize and insert theposting references for the October 3, 2018, transaction on page 91of Regal CompanyĆ¢Ā€Ā™s two-column journal.
B. Prepare a four-column accountfor Supplies. Enter a debit balance of $2,050 as of October 1,2018. Enter Ć¢Ā€ĀœBalanceĆ¢Ā€Ā in the Item column and place a check mark (Ć¢ĀˆĀš)in the Posting Reference column.
C. Prepare a four-column accountfor Accounts Payable. Enter a credit balance of $18,440 as ofOctober 1, 2018. Place a check mark (Ć¢ĀˆĀš) in the Posting Referencecolumn. Enter Ć¢Ā€ĀœBalanceĆ¢Ā€Ā in the Item column and place a check mark(Ć¢ĀˆĀš) in the Posting Reference column.
D. Post the October 3, 2018,transaction to the accounts. Insert the appropriate postingreferences in both the journal and the ledger as each item isposted.
E.

Do the rules of debit and credit apply to allcompanies?

CHART OF ACCOUNTS

Regal CompanyGeneral Ledger

ASSETS
11 Cash
12 Accounts Receivable
13 Land
14 Prepaid Rent
15 Supplies
16 Equipment
17 Automobiles
LIABILITIES
21 Accounts Payable
22 Unearned Rent
23 Notes Payable
24 Salaries Payable
EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
REVENUE
41 Fees Earned
42 Sales Commission
EXPENSES
51 Advertising Expense
52 Automobile Expense
53 Insurance Expense
54 Rent Expense
55 Wages Expense
56 Supplies Expense
57 Utilities Expense
58 Miscellaneous Expense
B.Prepare a four-columnaccount for Supplies. Enter a debit balance of $2,050 as of October 1, 2018. Enter Ć¢Ā€ĀœBalanceĆ¢Ā€Āin the Item column and place a check mark (Ć¢ĀˆĀš) in the PostingReference column.
C.Prepare a four-columnaccount for Accounts Payable. Enter a credit balance of $18,440 as of October 1, 2018. Place a checkmark (Ć¢ĀˆĀš) in the Posting Reference column. Enter Ć¢Ā€ĀœBalanceĆ¢Ā€Ā in theItem column and place a check mark (Ć¢ĀˆĀš) in the Posting Referencecolumn.
D.Postthe October 3, 2018, transaction to the accounts. Insert theappropriate posting references in both the journal and the ledgeras each item is posted.

I need help with the Post References of the Sales and Cash Journal as well as posting them to the General ledger accounts in the End of Month Posting:

Now that you have finished recording all of the transactions for the month of June, you are ready to perform the end of month posting procedure. The purpose of this end of month posting is to transfer the totals from the special journals to the appropriate general ledger accounts so that the balances in those ledger accounts reflect all of the transactions that occurred throughout the period.

Instructions for end of month posting

1)Total the columns in the special journals. Record the amount in the Total row of each journal.

2)Post the totals of the columns in the special journals to their corresponding ledger account. To confirm that the posting has been performed, a posting reference is recorded in the last row of the special journals. If the total of a column is not required to be posted, you need to record anĀ XĀ in the post reference field for that column.

3)Record the final unadjusted balance of each ledger account in the Unadjusted Balance row of each ledger, even for ledgers with a balance of zero. Although each ledger already has a running balance, the Unadjusted Balance row must still be filled out in order to receive full points.

SALES JOURNAL

Date Account Invoice
No.		 Post
Ref.		 Accounts Receivable Sales Tax Sales Revenue Cost of Goods Sold Ā 
Jun 6 ARC - Great Sports 362 110-3 5,712 272 5,440 2,880 Ā 
Jun 12 ARC - The Locker Room 363 110-6 21,147 1,007 20,140 9,820 Ā 
Jun 17 ARC - Mick's Sporting 364 110-5 20,202 962 19,240 10,560 Ā 
Jun 28 ARC - The Locker Room 365 110-6 1,197 57 1,140 600 Ā 
Ā  Ā  Ā  Ā  Ā  Ā  Ā  Ā  Ā  Ā 
Total ? ? ? ? Ā 
Post Reference (?) (?) (?) (?) / (?) Ā 

CASH PAYMENTS JOURNAL

Date Account Check
No.		 Post
Ref.		 Debit Credit Ā 
Accounts Payable Merchandise Inventory Wages
Expense		 Other Accounts Cash Ā 
Jun 3 Merchandise Inventory 731 X Ā  3,520 Ā  Ā  3,520 Ā 
Jun 4 APC - Sport Borders 732 210-4 9,500 Ā  Ā  Ā  9,500 Ā 
Jun 5 Wages Payable 733 220 Ā  Ā  835 1,000 1,835 Ā 
Jun 6 APC - Addax Sports 734 210-2 5,400 Ā  Ā  Ā  5,400 Ā 
Jun 9 APC - Sports 'R Us 735 210-5 8,700 Ā  Ā  Ā  8,700 Ā 
Jun 12 Electricity Payable 736 221 Ā  Ā  Ā  1,420 1,420 Ā 
Jun 12 Wages Expense 737 X Ā  Ā  2,384 Ā  2,384 Ā 
Jun 15 Prepaid Rent 738 140 Ā  Ā  Ā  2,000 2,000 Ā 
Jun 19 Wages Expense 739 X Ā  Ā  1,695 Ā  1,695 Ā 
Jun 22 APC - Extreme Sports 740 210-3 49,313 Ā  Ā  Ā  49,313 Ā 
Jun 24 APC - J. J. Spud 741 210-1 10,215 Ā  Ā  Ā  10,215 Ā 
Jun 26 Wages Expense 742 X Ā  Ā  2,320 Ā  2,320 Ā 
Jun 30 Merchandise Inventory 743 X Ā  3,200 Ā  Ā  3,200 Ā 
Jun 30 Salary Expense 744 545 Ā  Ā  Ā  5,300 5,300 Ā 
Ā  Ā  Ā  Ā  Ā  Ā  Ā  Ā  Ā  Ā  Ā 
Total ? ? ? ? ? Ā 
Post Reference (?) (?) (?) (?) (?) Ā 

GENERAL LEDGER

Account:Ā Cash
Account No. 100

Date Description Ref. Debit Credit Balance Ā 
May 31 Balance Ā  Ā  Ā  65,589 DR Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Unadjusted Balance Ā  Ā 

Account:Ā ARC - Accounts Receivable Control
Account No. 110

Date Description Ref. Debit Credit Balance Ā 
May 31 Balance Ā  Ā  Ā  66,657 DR Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Unadjusted Balance Ā  Ā 

Account:Ā Merchandise Inventory
Account No. 120

Date Description Ref. Debit Credit Balance Ā 
May 31 Balance Ā  Ā  Ā  66,640 DR Ā 
Jun 21 Purchase return to Extreme Sports Inc GJ Ā  320 66,320 DR Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā Ā  Ā 
Jun 30 Unadjusted Balance Ā  Ā 

Account:Ā APC - Accounts Payable Control
Account No. 210

Date Description Ref. Debit Credit Balance Ā 
May 31 Balance Ā  Ā  Ā  78,148 CR Ā 
Jun 21 Purchase return to Extreme Sports Inc GJ 320 Ā  77,828 CR Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā  Ā  Ā  DRCRĀ Ā  Ā Ā  Ā Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Unadjusted Balance Ā Ā  Ā 

Account:Ā Sales Tax Payable
Account No. 240

Date Description Ref. Debit Credit Balance Ā 
May 31 Balance Ā  Ā  Ā  14,073 CR Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā Ā  Ā 
Jun 30 Ā  Ā  Ā  Ā  Ā Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Unadjusted Balance Ā  Ā 

Account:Ā Sales Revenue
Account No. 400

Date Description Ref. Debit Credit Balance Ā 
May 31 Balance Ā  Ā  Ā  0 Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā Ā  Ā 
Jun 30 Ā  Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā Ā  Ā 
Jun 30 Unadjusted Balance Ā  Ā 

Account:Ā Cost of Goods Sold
Account No. 500

Date Description Ref. Debit Credit Balance Ā 
May 31 Balance Ā  Ā  Ā  0 Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā  Ā  Ā  Ā Ā  Ā 
Jun 30 Unadjusted Balance Ā  Ā 

Account:Ā Wages Expense
Account No. 516

Date Description Ref. Debit Credit Balance Ā 
May 31 Balance Ā  Ā  Ā  0 Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā Ā  Ā 
Jun 30 Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Ā  Ā Ā  Ā Ā  Ā  Ā  Ā  Ā 
Jun 30 Unadjusted Balance Ā Ā  Ā