ACG 3103 Lecture 6: INT ACT I NOTES PAYABLES Regular View
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Problem 7-1A Special journals, subsidiary ledgers, trialbalance-perpetual LO C3, P1, P2
[The following information applies to the questionsdisplayed below.]
Church Company completes these transactions and events during Marchof the current year (terms for all its credit sales are 3/10,n/30).
Mar. | 1 | Purchased $40,000 of merchandisefrom Van Industries, invoice dated March 1, terms 3/15, n/30. | ||||
2 | Sold merchandise on credit to MinCho, Invoice No. 854, for $16,000 (cost is $8,000). | |||||
3 | (a) | Purchased $1,200 of office supplieson credit from Gabel Company, invoice dated March 3, terms n/10EOM. | ||||
3 | (b) | Sold merchandise on credit to LindaWitt, Invoice No. 855, for $8,000 (cost is $4,000). | ||||
6 | Borrowed $72,000 cash from FederalBank by signing a long-term note payable. | |||||
9 | Purchased $20,000 of officeequipment on credit from Spell Supply, invoice dated March 9, termsn/10 EOM. | |||||
10 | Sold merchandise on credit toJovita Albany, Invoice No. 856, for $4,000 (cost is $2,000). | |||||
12 | Received payment from Min Cho forthe March 2 sale less the discount. | |||||
13 | (a) | Sent Van Industries Check No. 416in payment of the March 1 invoice less the discount. | ||||
13 | (b) | Received payment from Linda Wittfor the March 3 sale less the discount. | ||||
14 | Purchased $34,000 of merchandisefrom the CD Company, invoice dated March 13, terms 3/10, n/30. | |||||
15 | (a) | Issued Check No. 417, payable toPayroll, in payment of sales salaries expense for the first half ofthe month, $15,200. Cashed the check and paid the employees. | ||||
15 | (b) | Cash sales for the first half ofthe month are $64,000 (cost is $51,200). (Cash sales are recordeddaily, but are recorded only twice here to reduce repetitiveentries.) | ||||
16 | Purchased $1,720 of store supplieson credit from Gabel Company, invoice dated March 16, terms n/10EOM. | |||||
17 | Received a $3,400 credit memorandumfrom CD Company for the return of unsatisfactory merchandisepurchased on March 14. | |||||
19 | Received a $600 credit memorandumfrom Spell Supply for office equipment received on March 9 andreturned for credit. | |||||
20 | Received payment from Jovita Albanyfor the sale of March 10 less the discount. | |||||
23 | Issued Check No. 418 to CD Companyin payment of the invoice of March 13 less the March 17 return andthe discount. | |||||
27 | Sold merchandise on credit toJovita Albany, Invoice No. 857, for $12,000 (cost is $4,800). | |||||
28 | Sold merchandise on credit to LindaWitt, Invoice No. 858, for $4,800 (cost is $1,920). | |||||
31 | (a) | Issued Check No. 419, payable toPayroll, in payment of sales salaries expense for the last half ofthe month, $15,200. Cashed the check and paid the employees. | ||||
31 | (b) | Cash sales for the last half of themonth are $70,400 (cost is $42,240). | ||||
31 | (c) | Verify that amounts impactingcustomer and creditor accounts were posted and that any amountsthat should have been posted as individual amounts to the generalledger accounts were posted. Foot and crossfoot the journals andmake the month-end postings. |
Assume the following ledger account amounts Inventory (March 1 beg.bal. is $63,000), Z. Church, Capital (March 1 beg. bal. is $63,000)and Church Company uses the perpetual inventory system.
Problem 7-1A Part 2
Required:
2-a. Enter the transactions in a sales journal.
2-b. Enter the transactions in a purchasesjournal.
2-c. Enter the transactions in a cash receiptsjournal.
2-d. Enter the transactions in a cashdisbursements journal.
2-e. Enter the transactions in a generaljournal.
Enter the transactions in a sales journal.
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Enter the transactions in a purchases journal.
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Enter the transactions in a cash receipts journal.
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Enter the transactions in a cash disbursements journal.
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Enter the transactions in a general journal.
Journal Entry Worksheet
Received a $3,400 credit memorandum from CD Company for thereturn of unsatisfactory merchandise purchased on March 14.
Received a $600 credit memorandum from Spell Supply for officeequipment received on March 9 and returned for credit.
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*Enter debits before credits
Enter the transactions in a general journal.
Journal Entry Worksheet
Received a $3,400 credit memorandum from CD Company for thereturn of unsatisfactory merchandise purchased on March 14.
Received a $600 credit memorandum from Spell Supply for officeequipment received on March 9 and returned for credit.
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*Enter debits before credits
(a) Record a single-column purchases journal.
Check figures:
Cash Receipts Journal, total Cash DR: $ 70,348
Cash Payments Journal, total Cash CR: 62,060
Net Income: 25,218 Total Assets: 149,568
Total Post Closing Trial Balance: 151,193
Sun & Surf Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Sun & Surf are indicated in the working papers. Below are a series of transactions for Sun & Surf Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 55% of the sales price.
Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.
5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30.
7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.
8 Pay freight on merchandise purchased $235.
9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.
9 Issue credit of $300 to C. Ryder for merchandise returned.
10 Summary daily cash sales total $15,500.
11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828.
12 Pay rent of $1,000 for January.
13 Receive payment in full from M. Knast and C. Ryder less cash discounts.
15 Withdrawal of $800 cash by J. Sandy for personal use.
15 Post all entries to the subsidiary ledgers.
16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.
17 Pay $400 cash for office supplies.
18 Return $200 of merchandise to K. Xerxes and receive credit.
20 Summary daily cash sales total $20,100.
21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.
21 Receive payment in full from V. Arnold less cash discount.
22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.
22 Post all entries to the subsidiary ledgers.
23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.
25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.
27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.
27 Post all entries to the subsidiary ledgers.
28 Pay $275 cash for office supplies.
31 Summary daily cash sales total $21,300.
31 Pay salaries and wages of $8,100. (continued)
(a) Record a single-column purchases journal.
1. Office supplies at January 31 total $900.
2. Insurance coverage expires on September 30, 2017.
3. Annual depreciation on the equipment is $1,500.
4. Interest of $50 has accrued on the note payable.
General Ledger | |||||
Cash | No. 101 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 37,150 | ||
Accounts Receivable | No. 112 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 13,000 | ||
Notes Receivable | No. 115 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 39,000 | ||
Inventory | No. 120 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 17,795 | ||
Office Supplies | No. 125 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 1,200 | ||
Prepaid Insurance | No. 130 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 2,205 | ||
Equipment | No. 157 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 6,450 | ||
Accumulated Depreciation - Equipment | No. 158 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 1,500 | ||
Notes Payable | No. 200 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Accounts Payable | No. 201 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 35,000 | ||
Interest Payable | |||||
Date | Explanation | Ref. | Debit | Credit | Balance |
J. Sandy, Capital | No. 301 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 80,300 | ||
J. Sandy, Drawing | No. 306 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Income Summary | No. 350 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Sales | No. 401 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Sales Returns and Allowances | No. 412 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Sales Discounts | No. 414 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Cost of Goods Sold | No. 505 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Salaries and Wages Expense | No. 627 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Depreciation Expense | No. 711 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Interest Expense | No. 718 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Insurance Expense | No. 722 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Office Supplies Expense | No. 728 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Rent Expense | No. 729 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
(a) Record the January transactions in a sales journal.
Check figures:
Cash Receipts Journal, total Cash DR: $ 70,348
Cash Payments Journal, total Cash CR: 62,060
Net Income: 25,218 Total Assets: 149,568
Total Post Closing Trial Balance: 151,193
Sun & Surf Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Sun & Surf are indicated in the working papers. Below are a series of transactions for Sun & Surf Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 55% of the sales price.
Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.
5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30.
7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.
8 Pay freight on merchandise purchased $235.
9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.
9 Issue credit of $300 to C. Ryder for merchandise returned.
10 Summary daily cash sales total $15,500.
11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828.
12 Pay rent of $1,000 for January.
13 Receive payment in full from M. Knast and C. Ryder less cash discounts.
15 Withdrawal of $800 cash by J. Sandy for personal use.
15 Post all entries to the subsidiary ledgers.
16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.
17 Pay $400 cash for office supplies.
18 Return $200 of merchandise to K. Xerxes and receive credit.
20 Summary daily cash sales total $20,100.
21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.
21 Receive payment in full from V. Arnold less cash discount.
22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.
22 Post all entries to the subsidiary ledgers.
23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.
25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.
27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.
27 Post all entries to the subsidiary ledgers.
28 Pay $275 cash for office supplies.
31 Summary daily cash sales total $21,300.
31 Pay salaries and wages of $8,100. (continued)
Instructions
(a) Record the January transactions in a sales journal.
1. Office supplies at January 31 total $900.
2. Insurance coverage expires on September 30, 2017.
3. Annual depreciation on the equipment is $1,500.
4. Interest of $50 has accrued on the note payable.
General Ledger | |||||
Cash | No. 101 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 37,150 | ||
Accounts Receivable | No. 112 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 13,000 | ||
Notes Receivable | No. 115 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 39,000 | ||
Inventory | No. 120 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 17,795 | ||
Office Supplies | No. 125 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 1,200 | ||
Prepaid Insurance | No. 130 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 2,205 | ||
Equipment | No. 157 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 6,450 | ||
Accumulated Depreciation - Equipment | No. 158 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 1,500 | ||
Notes Payable | No. 200 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Accounts Payable | No. 201 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 35,000 | ||
Interest Payable | |||||
Date | Explanation | Ref. | Debit | Credit | Balance |
J. Sandy, Capital | No. 301 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Jan. 1 | Balance | â | $ 80,300 | ||
J. Sandy, Drawing | No. 306 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Income Summary | No. 350 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Sales | No. 401 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Sales Returns and Allowances | No. 412 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Sales Discounts | No. 414 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Cost of Goods Sold | No. 505 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Salaries and Wages Expense | No. 627 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Depreciation Expense | No. 711 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Interest Expense | No. 718 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Insurance Expense | No. 722 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Office Supplies Expense | No. 728 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |
Rent Expense | No. 729 | ||||
Date | Explanation | Ref. | Debit | Credit | Balance |