COLLEGE ACCT.,CH.1-9-W/CENGAGENOW2
COLLEGE ACCT.,CH.1-9-W/CENGAGENOW2
23rd Edition
ISBN: 9780357252314
Author: HEINTZ
Publisher: CENGAGE L
Question
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Chapter 10, Problem 11SPA

1.

To determine

Journalize the transactions related to cash receipt transactions.

1.

Expert Solution
Check Mark

Explanation of Solution

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

  • Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
  • Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

Journalize the transactions related to cash receipts.

Transaction on December 1:

Page: 20
DateAccount Titles and ExplanationsPost. Ref.Debit ($)Credit ($)
20--    
December1Cash1011,360 
   Accounts Receivable, MA122/✓ 1,360
  (Record cash received for sales on account)   

Table (1)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Accounts Receivable, MA is an asset account. Since amount to be received has decreased, asset account decreased, and a decrease in asset is credited.

Transaction on December 2:

Page: 20
DateAccount Titles and ExplanationsPost. Ref.Debit ($)Credit ($)
20--    
December2Cash101382 
   Accounts Receivable, A Manufacturing122/✓ 382
  (Record cash received for sales on account)   

Table (2)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Accounts Receivable, A Manufacturing is an asset account. Since amount to be received has decreased, asset account decreased, and a decrease in asset is credited.

Transaction on December 7:

Page: 20
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
December7Cash1013,349.60 
   Sales401 3,160.00
   Sales Tax Payable231 189.60
  (Record cash sales)   

Table (3)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Sales is a revenue account. Since revenues and gains increase equity, equity value is increased, and an increase in equity is credited.
  • Sales Tax Payable is a liability account. Since the payable increased, the liability increased, and an increase in liability is credited.

Working Note 1:

Compute sales tax payable amount.

Sales tax payable = Sales×Sales tax percentage= $3,160×6%= $189.60

Working Note 2:

Compute cash amount (Refer to Working Note 1 for value of sales tax payable).

Cash = Sales+Sales tax payable= $3,160.00+$189.60= $3,349.60

Transaction on December 7:

Page: 20
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
December7Cash1011,028.20 
  Bank Credit Card Expense51331.80 
   Sales401 1,000.00
   Sales Tax Payable231 60.00
  (Record credit card sale)   

Table (4)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Bank Credit Card Expense is an expense account. Since expenses and losses decrease equity, equity value is decreased, and a decrease in equity is debited.
  • Sales is a revenue account. Since revenues and gains increase equity, equity value is increased, and an increase in equity is credited.
  • Sales Tax Payable is a liability account. Since the payable increased, the liability increased, and an increase in liability is credited.

Working Note 3:

Compute sales tax payable amount.

Sales tax payable = Sales×Sales tax percentage= $1,000×6%= $60

Working Note 4:

Compute bank credit card expense amount (Refer to Working Note 3 for value of sales tax payable).

Bank credit card expense = {(Sales+Sales tax payable)×Bank credit card fee percentage}($1,000.00+$60)×3%= $31.80

Working Note 5:

Compute amount of cash received (Refer to Working Note 3 for value of sales tax payable and Working Note 4 for value of bank credit card expense).

Cash  = {(Sales+Sales tax payable)Bank credit card expense}($1,000.00+$60.00)$31.80= $1,028.20

Transaction on December 8:

Page: 20
DateAccount Titles and ExplanationPost. Ref.Debit ($)Credit ($)
20--    
December8Cash101880 
   Accounts Receivable, JG122/✓ 880
  (Record cash received for sales on account)   

Table (5)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Accounts Receivable, JG is an asset account. Since amount to be received has decreased, asset account decreased, and a decrease in asset is credited.

Transaction on December 11:

Page: 20
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
December11Sales Returns and Allowances401.160.00 
  Sales Tax Payable2313.60 
   Accounts Receivable, MA122/✓ 63.60
  (Record merchandise returned)   

Table (6)

Description:

  • Sales Returns and Allowances is a contra-revenue account, and contra-revenue accounts decrease the equity value, and a decrease in equity is debited.
  • Sales Tax Payable is a liability account. Since the payable decreased due to returns, the liability decreased, and a decrease in liability is debited.
  • Accounts Receivable, MA is an asset account. Since inventory is returned, amount to be received has decreased, asset account is decreased, and a decrease in asset is credited.

Working Note 6:

Compute sales tax payable amount.

Sales tax payable = Sales returns×Sales tax percentage= $60×6%= $3.60

Working Note 7:

Compute accounts receivable amount (Refer to Working Note 7 for value of sales tax payable).

Accounts receivable, MA = Sales returns+Sales tax payable= $60.00+$3.60= $63.60

Transaction on December 14:

Page: 20
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
December14Cash1012,968 
   Sales401 2,800
   Sales Tax Payable231 168
  (Record cash sales)   

Table (7)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Sales is a revenue account. Since revenues and gains increase equity, equity value is increased, and an increase in equity is credited.
  • Sales Tax Payable is a liability account. Since the payable increased, the liability increased, and an increase in liability is credited.

Working Note 8:

Compute sales tax payable amount.

Sales tax payable = Sales×Sales tax percentage= $2,800×6%= $168

Working Note 9:

Compute cash amount (Refer to Working Note 8 for value of sales tax payable).

Cash = Sales+Sales tax payable= $2,800+$168= $2,968

Transaction on December 14:

Page: 20
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
December14Cash101822.56 
  Bank Credit Card Expense51325.44 
   Sales401 800.00
   Sales Tax Payable231 48.00
  (Record credit card sale)   

Table (8)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Bank Credit Card Expense is an expense account. Since expenses and losses decrease equity, equity value is decreased, and a decrease in equity is debited.
  • Sales is a revenue account. Since revenues and gains increase equity, equity value is increased, and an increase in equity is credited.
  • Sales Tax Payable is a liability account. Since the payable increased, the liability increased, and an increase in liability is credited.

Working Note 10:

Compute sales tax payable amount.

Sales tax payable = Sales×Sales tax percentage= $800×6%= $48

Working Note 11:

Compute bank credit card expense amount (Refer to Working Note 10 for value of sales tax payable).

Bank credit card expense = {(Sales+Sales tax payable)×Bank credit card fee percentage}($800+$48)×3%= $25.44

Working Note 12:

Compute amount of cash received (Refer to Working Note 10 for value of sales tax payable and Working Note 11 for value of bank credit card expense).

Cash  = {(Sales+Sales tax payable)Bank credit card expense}($800.00+$48.00)$25.44= $822.56

Transaction on December 20:

Page: 20
DateAccount Titles and ExplanationPost. Ref.Debit ($)Credit ($)
20--    
December20Cash1011,110 
   Accounts Receivable, TW122/✓ 1,110
  (Record cash received for sales on account)   

Table (9)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Accounts Receivable, TW is an asset account. Since amount to be received has decreased, asset account decreased, and a decrease in asset is credited.

Transaction on December 21:

Page: 20
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
December21Sales Returns and Allowances401.122.00 
  Sales Tax Payable2311.32 
   Accounts Receivable, A Manufacturing122/✓ 23.32
  (Record merchandise returned)   

Table (10)

Description:

  • Sales Returns and Allowances is a contra-revenue account, and contra-revenue accounts decrease the equity value, and a decrease in equity is debited.
  • Sales Tax Payable is a liability account. Since the payable decreased due to returns, the liability decreased, and a decrease in liability is debited.
  • Accounts Receivable, A Manufacturing is an asset account. Since inventory is returned, amount to be received has decreased, asset account is decreased, and a decrease in asset is credited.

Working Note 13:

Compute sales tax payable amount.

Sales tax payable = Sales returns×Sales tax percentage= $22×6%= $1.32

Working Note 14:

Compute accounts receivable amount (Refer to Working Note 13 for value of sales tax payable).

Accounts receivable, A Manufacturing} = Sales returns+Sales tax payable= $22.00+$1.32= $23.32

Transaction on December 21:

Page: 20
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
December21Cash1013,392 
   Sales401 3,200
   Sales Tax Payable231 192
  (Record cash sales)   

Table (11)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Sales is a revenue account. Since revenues and gains increase equity, equity value is increased, and an increase in equity is credited.
  • Sales Tax Payable is a liability account. Since the payable increased, the liability increased, and an increase in liability is credited.

Working Note 15:

Compute sales tax payable amount.

Sales tax payable = Sales×Sales tax percentage= $3,200×6%= $192

Working Note 16:

Compute cash amount (Refer to Working Note 15 for value of sales tax payable).

Cash = Sales+Sales tax payable= $3,200+$192= $3,392

Transaction on December 24:

Page: 20
DateAccount Titles and ExplanationPost. Ref.Debit ($)Credit ($)
20--    
December24Cash1012,000 
   Accounts Receivable, RC122/✓ 2,000
  (Record cash received for sales on account)   

Table (12)

Description:

  • Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
  • Accounts Receivable, RC is an asset account. Since amount to be received has decreased, asset account decreased, and a decrease in asset is credited.

2.

To determine

Post the journalized entries into the accounts of the general ledger, and the customer accounts in accounts receivable ledger.

2.

Expert Solution
Check Mark

Explanation of Solution

Posting transactions: The process of transferring the journalized transactions into the accounts of the ledger is known as posting the transactions.

Post the journalized entries into the accounts of the general ledger.

ACCOUNT    Cash                                                                       ACCOUNT NO. 101
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
December1Balance   9,862.00 
 1 J201,360.00 11,222.00 
 2 J20382.00 11,604.00 
 7 J203,349.60 14,953.60 
 7 J201,028.20 15,981.80 
 8 J20880.00 16,861.80 
 14 J202,968.00 19,892.80 
 14 J20822.56 20,652.36 
 20 J201,110.00 21,762.36 
 21 J203,392.00 25,154.36 
 24 J202,000.00 27,154.36 

Table (13)

ACCOUNT    Accounts Receivable                                             ACCOUNT NO. 122
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
December1Balance   9,352.00 
 1 J20 1,360.007,992.00 
 2 J20 382.007,610.00 
 8 J20 880.006,730.00 
 11 J20 63.606,666.40 
 20 J20 1,110.005,556.40 
 21 J20 23.325,533.08 
 24 J20 2,000.003,533.08 

Table (14)

ACCOUNT    Sales Tax Payable                                                 ACCOUNT NO. 231
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
December7 J20 189.60 189.60
 7 J20 60.00 249.60
 11 J203.60  246.00
 14 J20 168.00 414.00
 14 J20 48.00 462.00
 21 J201.32  460.68
 21 J20 192.00 652.68

Table (15)

ACCOUNT    Sales                                                                         ACCOUNT NO. 401
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
December7 J20 3,160.00 3,160.00
 7 J20 1,000.00 4,160.00
 14 J20 2,800.00 6,960.00
 14 J20 800.00 7,760.00
 21 J20 3,200.00 10,960.00

Table (16)

ACCOUNT    Sales Returns and Allowances                            ACCOUNT NO. 401.1
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
December11 J2060.00 60.00 
 21 J2022.00 82.00 

Table (17)

ACCOUNT    Bank Credit Card Expense                                     ACCOUNT NO. 513
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
December7 J2031.80 31.80 
 14 J2025.44 57.24 

Table (18)

Post the journalized entries into the customer accounts in accounts receivable ledger.

NAME          MA
ADDRESS
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
December1Balance  2,480.00
 1 J20 1,360.001,272.00
 11 J20 63.601,056.40

Table (19)

NAME          A Manufacturing
ADDRESS
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
December1Balance  982.00
 2 J20 382.00600.00
 21 J20 23.32576.68

Table (20)

NAME          JG
ADDRESS
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
December1Balance  880.00
 8 J20 880.000

Table (21)

NAME          TW
ADDRESS
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
December1Balance  1,810.00
 20 J20 1,110.00700.00

Table (22)

NAME          RC
ADDRESS
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
December1Balance  3,200.00
 24 J20 2,000.001,200.00

Table (23)

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Chapter 10 Solutions

COLLEGE ACCT.,CH.1-9-W/CENGAGENOW2

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