Q-6-6. Rock Castle Construction â Accounting transactions resulting from processing
purchasing and cash disbursement transactions
For each of the following transactions, select the proper accounting entry
from the list provided.
c. The inventory received on a purchase order was paid for within 20
days of the purchase. Payment terms on invoice were 2% 10, Net 30.
1. DR A/C #20000 Accounts Payable
CR A/C #10100 Checking
CR A/C #54599 Less Discounts Taken
2. DR A/C #20000 Accounts Payable
CR A/C #50100 Cost of Goods Sold
3. DR A/C # 20000 Accounts Payable
CR A/C #10100 Checking
4. DR A/C #50100 Cost of Goods Sold
CR A/C #10100 Checking
d. An invoice was received and processed, but not paid for from Cal
Gas & Electric.
1. DR A/C #65100 Utilities
CR A/C #10100 Checking
2. DR A/C #65100 Utilities
CR A/C #54300 Job Materials
3. DR A/C #65100 Utilities
CR A/C #20600 CalOil Credit Card
4. DR A/C #65100 Utilities
CR A/C #20000 Accounts Payable
Q-6-6. Rock Castle Construction â Accounting transactions resulting from processing
purchasing and cash disbursement transactions
For each of the following transactions, select the proper accounting entry
from the list provided.
c. The inventory received on a purchase order was paid for within 20
days of the purchase. Payment terms on invoice were 2% 10, Net 30.
1. DR A/C #20000 Accounts Payable
CR A/C #10100 Checking
CR A/C #54599 Less Discounts Taken
2. DR A/C #20000 Accounts Payable
CR A/C #50100 Cost of Goods Sold
3. DR A/C # 20000 Accounts Payable
CR A/C #10100 Checking
4. DR A/C #50100 Cost of Goods Sold
CR A/C #10100 Checking
d. An invoice was received and processed, but not paid for from Cal
Gas & Electric.
1. DR A/C #65100 Utilities
CR A/C #10100 Checking
2. DR A/C #65100 Utilities
CR A/C #54300 Job Materials
3. DR A/C #65100 Utilities
CR A/C #20600 CalOil Credit Card
4. DR A/C #65100 Utilities
CR A/C #20000 Accounts Payable
Related questions
Required information
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.
| ||||||||||||||||||||||||||||||||||||||||||||||
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.
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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.
| |||||||||||||||||||||||||
|
*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.
| |||||||||||||||||||||||||
|
*Enter debits before credits
Solve for the adjusting entry:-
2018
Debit Balance Credit Balance
100000 Bank Account dr $300,318
110100 Accounts Receivable (Direct Posting Account) dr 94,670
110150 Allowance for Bad Debts cr 2,600
200600 Inventory-Operating Supplies dr 8,832
200900 Inventory-Raw Materials (Direct Post) dr 52,000
200910 Inventory-Finished Goods (Direct Post) dr 281,298
200920 Inventory-Trading Goods (Direct Post) dr 66,474
210000 Prepaid Insurance dr 3,000
212000 Prepaid Advertising dr 2,400
220110 Land (Direct Post) dr 528,000
220210 Production Machinery, Equip & Fixtures (Dir.Post) dr 915,000
220310 Accumulated Depreciation-Machinery (Direct Post) cr 408,000
300200 Accounts Payable (Direct Posting Account) cr 48,000
300700 Payables-Salaries and Wages cr 94,313
300800 Accrued Expenses cr 2,200
320000 Accrued Tax â Output cr 4,000
329000 Common Stock cr 1,010,000
329100 Additional Paid-in-Capital cr 52,870
330010 Retained Earnings (Direct Posting) cr 630,009
| Payables-Salaries and Wages | 94,313 | |
| Bank Account | 94,313 | |
| to record payment of salaries and wages | ||
| Inventory-Trading Goods (Direct Post) | 60,600 | |
| Inventory-Raw Materials (Direct Post) | 40,900 | |
| Accounts Payable (Direct Posting Account) | 100,000 | |
| Bank Account | 1,500 | |
| to record acquisition of invemtory and payment of shipment | ||
| Accounts Receivable (Direct Posting Account) | 22,500 | |
| Cost of Goods Sold | 15,000 | |
| Sales Revenue | 22,500 | |
| Inventory-Trading Goods (Direct Post) | 15,000 | |
| to record the sale of accessories | ||
| Bank Account | 24,000 | |
| Accounts Receivable (Direct Posting Account) | 24,000 | |
| to record payment receipt from Northwest bikes | ||
| Accrued Expenses | 2,200 | |
| Bank Account | 2,200 | |
| to record payment of utilities | ||
| Advertising Expense | 1,100 | |
| Prepaid Advertising | 1,100 | |
| to record advertisiment expense | ||
| Inventory-Operating Supplies | 380 | |
| Accounts Payable (Direct Posting Account) | 380 | |
| to record receipt of Staples | ||
| Bank Account | 21,825 | |
| Sales Discount | 675 | |
| Accounts Receivable (Direct Posting Account) | 22,500 | |
| to recors payment of windy city bikes | ||
| Accounts Payable (Direct Posting Account) | 100,000 | |
| Bank Account | 100,000 | |
| to record payment to Dallas Bike Basics | ||
| Deposits on Purchases | 8,800 | |
| Bank Account | 2,000 | |
| Accounts Payable (Direct Posting Account) | 6,800 | |
| to record the purchase of barcoding | ||
| Accounts Payable (Direct Posting Account) | 15,890 | |
| Bank Account | 15,890 | |
| to record payment of Lightbulb Accesorry Kits | ||
| Accounts Receivable (Direct Posting Account) | 128,000 | |
| Cost of Goods Sold | 78,000 | |
| Sales Revenue | 128,000 | |
| Inventory-Finished Goods (Direct Post) | 78,000 | |
| to record sale to Rocky Mountain Bikes(Denver) | ||
| Inventory-Raw Materials (Direct Post) | 75,600 | |
| Accounts Payable (Direct Posting Account) | 75,600 | |
| to record purchase of raw material(Space Bike) | ||
| Allowance for Bad Debts | 4,200 | |
| Accounts Receivable (Direct Posting Account) | 4,200 | |
| to record Bad debt expense | ||
| Bank Account | 90,000 | |
| Accounts Receivable (Direct Posting Account) | 90,000 | |
| to record payment from Sillicon Valley Bikes | ||
| Accounts Payable (Direct Posting Account) | 380 | |
| Bank Account | 380 | |
| Accounts Receivable (Direct Posting Account) | 2,977 | |
| Cost of Goods Sold | 1,300 | |
| Sales Revenue | 2,750 | |
| Accrued Tax- Input | 227 | |
| Inventory-Trading Goods (Direct Post) | 1,300 | |
| to record sale of inventory | ||
| Prepaid Advertising | 9,000 | |
| Bank Account | 9,000 | |
| to record payment for advertising | ||
| Bank Account | 27,000 | |
| Cost of Goods Sold | 17,000 | |
| Sales Revenue | 27,000 | |
| Inventory-Finished Goods (Direct Post) | 17,000 | |
| to record sale to Beantown Bikes | ||
| Accounts Payable (Direct Posting Account) | 32,000 | |
| Bank Account | 32,000 | |
| to record payment to Night Rider Aluminum | ||
| Accrued Tax â Output | 3,000 | |
| Bank Account | 3,000 | |
| to record payment sale tax | ||
| Prepaid Rent | 4,000 | |
| Bank Account | 4,000 | |
| to record prepaid rent | ||
| Accounts Payable (Direct Posting Account) | 6,800 | |
| Bank Account | 6,800 | |
| to record payment for barcoding system | ||
| Accounts Receivable (Direct Posting Account) | 358,500 | |
| Cost of Goods Sold | 250,000 | |
| Sales Revenue | 358,500 | |
| Inventory-Trading Goods (Direct Post) | 65,000 | |
| Inventory-Finished Goods (Direct Post) | 185,000 | |
| to record sale to Big Apple Bikes | ||
Adjustment information as of January 31, not already given in the original transaction(s):
1. Based on prior experience, GBI estimates that approximately 1.5 % of the credit sales from each month will become bad debt. GBI writes off bad debts as they occur and recognizes bad debt expense based on percentage of credit sales as an adjusting entry each month.
2. As a control measure, physical inventories are taken on a periodic basis alternating between the raw materials inventory, finished goods inventory and trading goods inventory. Physical inventory of the finished goods inventory was taken at the end of January. It was determined that the value of the finished goods merchandise on hand was $1,200.
3. GBI counted the office (operating) supplies on hand after the close of business on the last day of the month and determined the cost of the unused office supplies to be $1000.
4. Production Machinery, Equipment and Fixtures were placed in service on January 1, 2013, with no salvage value. The bar-code system has a 5-year life and no salvage value. GBI depreciates fixed assets on a straight-line basis and those assets placed in service in the first half of the months are depreciated for the entire month, while fixed assets placed in service during the last half of the month are not depreciated until the second month. Depreciation is rounded to the nearest dollar and assets are depreciated on a monthly basis (i.e. number of days in the month is not of consequence).
5. GBI used the Internet to review the monthly charges for utilities the business consumed during January. Based on the Internet report, the amount to be billed by the utilities company for January usage is the same as was billed for December.
6. Liability insurance for the six-month period ending on January 31 was paid last August on the first of the month. Liability insurance is assumed to be utilized uniformly over the six-month policy period.
7. GBI needs to recognize the wages expense for the month. Since all employees are paid salaries and no changes have been made, this amount is the same as the previous month salaries. (For purposes of this assignment, ignore manufacturing, office, and administrative payrolls and assume all wages expense is towards labor expense.
(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 |
