1.
Journalize the transactions related to cash receipt transactions.
1.

Explanation of Solution
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 | ||||||
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 1 | Cash | 101 | 1,360 | ||
122/✓ | 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 | ||||||
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 2 | Cash | 101 | 382 | ||
Accounts Receivable, A Manufacturing | 122/✓ | 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 | ||||||
Date | Account Titles and Explanation | Post Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 7 | Cash | 101 | 3,349.60 | ||
Sales | 401 | 3,160.00 | ||||
Sales Tax Payable | 231 | 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.
Working Note 2:
Compute cash amount (Refer to Working Note 1 for value of sales tax payable).
Transaction on December 7:
Page: 20 | ||||||
Date | Account Titles and Explanation | Post Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 7 | Cash | 101 | 1,028.20 | ||
Bank Credit Card Expense | 513 | 31.80 | ||||
Sales | 401 | 1,000.00 | ||||
Sales Tax Payable | 231 | 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.
Working Note 4:
Compute bank credit card expense amount (Refer to Working Note 3 for value of sales tax payable).
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).
Transaction on December 8:
Page: 20 | ||||||
Date | Account Titles and Explanation | Post. Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 8 | Cash | 101 | 880 | ||
Accounts Receivable, JG | 122/✓ | 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 | ||||||
Date | Account Titles and Explanation | Post Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 11 | Sales Returns and Allowances | 401.1 | 60.00 | ||
Sales Tax Payable | 231 | 3.60 | ||||
Accounts Receivable, MA | 122/✓ | 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.
Working Note 7:
Compute accounts receivable amount (Refer to Working Note 7 for value of sales tax payable).
Transaction on December 14:
Page: 20 | ||||||
Date | Account Titles and Explanation | Post Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 14 | Cash | 101 | 2,968 | ||
Sales | 401 | 2,800 | ||||
Sales Tax Payable | 231 | 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.
Working Note 9:
Compute cash amount (Refer to Working Note 8 for value of sales tax payable).
Transaction on December 14:
Page: 20 | ||||||
Date | Account Titles and Explanation | Post Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 14 | Cash | 101 | 822.56 | ||
Bank Credit Card Expense | 513 | 25.44 | ||||
Sales | 401 | 800.00 | ||||
Sales Tax Payable | 231 | 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.
Working Note 11:
Compute bank credit card expense amount (Refer to Working Note 10 for value of sales tax payable).
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).
Transaction on December 20:
Page: 20 | ||||||
Date | Account Titles and Explanation | Post. Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 20 | Cash | 101 | 1,110 | ||
Accounts Receivable, TW | 122/✓ | 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 | ||||||
Date | Account Titles and Explanation | Post Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 21 | Sales Returns and Allowances | 401.1 | 22.00 | ||
Sales Tax Payable | 231 | 1.32 | ||||
Accounts Receivable, A Manufacturing | 122/✓ | 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.
Working Note 14:
Compute accounts receivable amount (Refer to Working Note 13 for value of sales tax payable).
Transaction on December 21:
Page: 20 | ||||||
Date | Account Titles and Explanation | Post Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 21 | Cash | 101 | 3,392 | ||
Sales | 401 | 3,200 | ||||
Sales Tax Payable | 231 | 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.
Working Note 16:
Compute cash amount (Refer to Working Note 15 for value of sales tax payable).
Transaction on December 24:
Page: 20 | ||||||
Date | Account Titles and Explanation | Post. Ref. | Debit ($) | Credit ($) | ||
20-- | ||||||
December | 24 | Cash | 101 | 2,000 | ||
Accounts Receivable, RC | 122/✓ | 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.
Post the journalized entries into the accounts of the general ledger, and the customer accounts in accounts receivable ledger.
2.

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 | |||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
20-- | |||||||
December | 1 | Balance | ✓ | 9,862.00 | |||
1 | J20 | 1,360.00 | 11,222.00 | ||||
2 | J20 | 382.00 | 11,604.00 | ||||
7 | J20 | 3,349.60 | 14,953.60 | ||||
7 | J20 | 1,028.20 | 15,981.80 | ||||
8 | J20 | 880.00 | 16,861.80 | ||||
14 | J20 | 2,968.00 | 19,892.80 | ||||
14 | J20 | 822.56 | 20,652.36 | ||||
20 | J20 | 1,110.00 | 21,762.36 | ||||
21 | J20 | 3,392.00 | 25,154.36 | ||||
24 | J20 | 2,000.00 | 27,154.36 |
Table (13)
ACCOUNT Accounts Receivable ACCOUNT NO. 122 | |||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
20-- | |||||||
December | 1 | Balance | ✓ | 9,352.00 | |||
1 | J20 | 1,360.00 | 7,992.00 | ||||
2 | J20 | 382.00 | 7,610.00 | ||||
8 | J20 | 880.00 | 6,730.00 | ||||
11 | J20 | 63.60 | 6,666.40 | ||||
20 | J20 | 1,110.00 | 5,556.40 | ||||
21 | J20 | 23.32 | 5,533.08 | ||||
24 | J20 | 2,000.00 | 3,533.08 |
Table (14)
ACCOUNT Sales Tax Payable ACCOUNT NO. 231 | |||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
20-- | |||||||
December | 7 | J20 | 189.60 | 189.60 | |||
7 | J20 | 60.00 | 249.60 | ||||
11 | J20 | 3.60 | 246.00 | ||||
14 | J20 | 168.00 | 414.00 | ||||
14 | J20 | 48.00 | 462.00 | ||||
21 | J20 | 1.32 | 460.68 | ||||
21 | J20 | 192.00 | 652.68 |
Table (15)
ACCOUNT Sales ACCOUNT NO. 401 | |||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
20-- | |||||||
December | 7 | 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 | |||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
20-- | |||||||
December | 11 | J20 | 60.00 | 60.00 | |||
21 | J20 | 22.00 | 82.00 |
Table (17)
ACCOUNT Bank Credit Card Expense ACCOUNT NO. 513 | |||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
20-- | |||||||
December | 7 | J20 | 31.80 | 31.80 | |||
14 | J20 | 25.44 | 57.24 |
Table (18)
Post the journalized entries into the customer accounts in accounts receivable ledger.
NAME MA | ||||||
ADDRESS | ||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
December | 1 | Balance | ✓ | 2,480.00 | ||
1 | J20 | 1,360.00 | 1,272.00 | |||
11 | J20 | 63.60 | 1,056.40 |
Table (19)
NAME A Manufacturing | ||||||
ADDRESS | ||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
December | 1 | Balance | ✓ | 982.00 | ||
2 | J20 | 382.00 | 600.00 | |||
21 | J20 | 23.32 | 576.68 |
Table (20)
NAME JG | ||||||
ADDRESS | ||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
December | 1 | Balance | ✓ | 880.00 | ||
8 | J20 | 880.00 | 0 |
Table (21)
NAME TW | ||||||
ADDRESS | ||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
December | 1 | Balance | ✓ | 1,810.00 | ||
20 | J20 | 1,110.00 | 700.00 |
Table (22)
NAME RC | ||||||
ADDRESS | ||||||
Date | Item | Post. Ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
December | 1 | Balance | ✓ | 3,200.00 | ||
24 | J20 | 2,000.00 | 1,200.00 |
Table (23)
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Chapter 10 Solutions
EP CENGAGENOWV2 FOR HEINTZ/PARRY'S COLL
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