Chapter 10, Problem 1CP

1.

To determine

Journalize the transactions using special journals for August.

Explanation of Solution

Special journal: It is a book which records some specific kinds of transactions such as cash receipts, cash payments, credit sales, and credit purchases. Special journal is created for any kind of transaction. A business uses special journals depending on the types of transactions that occur most repeatedly. If a specific type of transactions occur often, it is more likely a special journal of that type would be beneficial for the business.

Journalize the transactions using special journals.

• Cash Receipts Journal

Table (1)

Equality of debits and credits for cash receipts journal.

EQUALITY OF DEBITS AND CREDITS
DEBITS ($)	CREDITS ($)
25224.66	3765.24
17.46	12,676.00
	7,210.00
	1,590.88
$25,242.12	$25,242.12

Table (2)

• Cash Payments Journal

Table (3)

Equality of debits and credits for cash payments journal:

EQUALITY OF DEBITS AND CREDITS
DEBITS ($)	CREDITS ($)
16,649.66	33,867.7
17,300	82.00
33,949.66	33,949.66

Table (4)

• Purchase Journal

Table (5)

Equality of debits and credits for purchase journal:

EQUALITY OF DEBITS AND CREDITS
DEBITS ($)	CREDITS ($)
16,880	33704.80
16,906	82.00
33,786.80	33,786.80

Table (6)

• Sales Journal

Table (7)

Equality of debits and credits for sales journal:

EQUALITY OF DEBITS AND CREDITS
DEBITS ($)	CREDITS ($)
5,538.24	410.24
	5,128.00
5,538.24	5,538.24

Table (8)

• General Journal

Table (9)

2.

To determine

Post the entries to the accounts receivable, accounts payable and general ledger.

Explanation of Solution

Account receivable: The amount of money to be received by a company for the sale of goods and services to the customers is referred to as account receivable.

Account payable: The amount of money owned by a company to its creditor is referred to as accounts payable.

General ledger: General ledger is a record of all accounts of assets, liabilities, and stockholders’ equity, necessary to prepare financial statements.

• Accounts Receivable Ledger

Accounts Receivable Ledger
Name: A Spa
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___	1	Balance	✓			521.59
August	1		S2	702.00		1,223.59
	9		J11		88.00	1,135.59
	15		CR1		265.00	870.59
Name: Mr. J
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			175.00
	4		CR1		87.50	87.50
Name: Mr. C
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___	1	Balance	✓			520.02
August	1		CR1		400.00	120.02
	5		S2	426.60		546.62
Name: Mr. T
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			164
	3		CR1		164	0
Name: Mr. L
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			351
	8		CR1		200	151
	11		S2	384.48		535
Name: Mini Spa
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			222
	1		CR1		222.48	—
	14		S2	942.84		942.84
	23		S2		942.84	—
Name: Mr. J
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			286
	19		CR1		286
Name: Pleasant Spa
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			1,961
	6		CR1		997.00	963.81
	9		S2	1,684.80		2,648.61
Name: Ms. J
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)

Table (10)

• Accounts Payable Ledger

Accounts Payable Ledger
Name: A company
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
Name: G company
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			1,309.00
	1		P2		4,280.00	5,589.00
	5		CP1	1,309.00		4,280.00
	10		CP1	4,280.00
Name: G spa supplies
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			490
	6		CP1	490
Name: Logo products
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___	1	Balance	✓			3,796
August	2		P2		2,595	6,391
	22		CP1	2,500		3,891
Name: Office staples
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			304.00
	5		CP1		186.00	118.00
Name: Spa equipment, Inc.
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			6,235
	5		CP1	3,000		3,235
Name: Spa goods
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___	1	Balance	✓			27,221
August	1		P2		3,717	6,438
	2		CP1	2,721		3,717
	29		J11	123		3,594
Name: Superior equipment
Address:
Date		Items	Post ref.	Debit ($)	Credit ($)	Balance ($)
20___
August	1	Balance	✓			420
	5		CP1	420

Table (11)

• General Ledger

General ledger
Account: Cash								Account No:111
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	31			CR1	25,224.66		70,193.92
	31			CP1		33,704.80	36,489.12
Account: Accounts receivable								Account No:113
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	31	CR1		CR1		3,765.24	715.55
	31	S2		S2			6,253.79
Account: Office Supplies								Account No:114
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			248.00
Account: Spa Supplies								Account No:115
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			695.00
	4			J12	45		740.00
Account: Prepaid insurance								Account No:116
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			800
Account: Office Equipment								Account No:121
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			1,570.00
Account: Accumulated Depreciation, Office Equipment								Account No:129
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			10.00
Account: Spa Equipment								Account No:128
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			17,601.00
	5			J11	482		18,083.00
Account: Accumulated Depreciation, Spa Equipment								Account No:129
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓				64.88
Account: Accounts Payable								Account No:211
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	31			CP1	16,906.00			3,691.00
	31			P2		11,822.00		15,513.00
Account: Wages Payable								Account No:212
Date		Item		Post ref	Debit	Credit	Balance
Account: Sales Tax Payable								Account No:215
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	31			CR1		1,590.88		1,590.88
	31			S2		410.24		2,001.12
Account: Ms. V, Capital								Account No:311
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓				50,219.62
Account: Ms. V, Drawing								Account No:312
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			2,500.00
	28			CP1	2,500.00		5,000.00
Account: Income Summary								Account No:313
Date		Item		Post ref	Debit	Credit	Balance
					($)	($)	Debit ($)	Credit($)
Account: Income from Service								Account No:411
Date		Item		Post ref	Debit	Credit	Balance
					($)	($)	Debit ($)	Credit($)
	31			CR1		12,676.00		25,398.00
Account: Merchandise Sales								Account No:411
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	31			CR1		7,210.00		17,361.65
	31			S2		5,128.00		22,489.65
Account: Sales discounts								Account No:413
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	23			CR1	17.46		17.46
Account: Sales return and allowance								Account No:414
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	9			J11	88		88
Account: Purchases								Account No:511
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	31			P2	11,233		11,233
Account: Purchase discount								Account No:512
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	10			CP1		82		82
Account: Purchase returns and allowances								Account No:513
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	29			J11		123		123
Account: Freight in								Account No:515
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	31			P2	589		992
Account: Wages expense								Account No:611
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			7,004.00
	2			CP1	1,845.50		8,849.50
	9			CP1	1,850.00		10,699.50
	16			CP1	1,853.00		12,552.50
	23			CP1	1,847.50		14,400.00
	30			CP1	1,850.00		16,250.00
Account: Rent expense								Account No:612
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			1,650.00
	1			CP1	1,650.00		3,300.00
Account: Office supplies expense								Account No:613
Date		Item		Post ref	Debit	Credit	Balance
					($)	($)	Debit ($)	Credit($)
Account: Spa supplies expense								Account No:614
Date		Item		Post ref	Debit	Credit	Balance
					($)	($)	Debit ($)	Credit($)
Account: Laundry expense								Account No:615
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1			✓			84
	28			CP1	95		179
Account: Advertising expense								Account No:616
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	2			CP1	455		455
Account: Utilities expense								Account No:617
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			473
	31			CP1	235		708
	31			CP1	235		963.00
Account: Insurance expense								Account No:618
Date		Item		Post ref	Debit	Credit	Balance
					($)	($)	Debit ($)	Credit($)
Account: Depreciation expense, Office Equipment								Account No:619
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August
Account: Depreciation expense, Spa Equipment								Account No:620
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August
Account: Miscellaneous expense								Account No:630
Date		Item		Post ref	Debit	Credit	Balance
20___					($)	($)	Debit ($)	Credit($)
August	1	Balance		✓			284
	3			CP1	87.9		371.9

Table (12)

3.

To determine

Prepare a trial balance for 31^st August.

Explanation of Solution

Trial balance: Trial balance is a summary of all the ledger accounts balances presented in a tabular form with two column, debit and credit. It checks the mathematical accuracy of the ledger postings and helps preparing the final accounts.

Prepare a trial balance.

A Spa
Trail balance
August 31, 20__
Account Name	Debit ($)	Credit($)
Cash	36,489.12
Accounts Receivable	6,253.79
Office Supplies	248.00
Spa Supplies	740.00
Prepaid Insurance	800.00
Office Equipment	1,570.00
Accumulated Depreciation, Office Equipment		10.00
Spa Equipment	18,083.00
Accumulated Depreciation, Spa Equipment		64.88
Accounts Payable		15,513.00
Sales Tax Payable		2,001.12
A. V, Capital		50,219.62
A. V, Drawing	5,000.00
Income from Services		25,398.00
Merchandise Sales		22,489.65
Sales Discounts	17.46
Sales Returns and Allowances	88.00
Purchases	24,101.00
Purchases Discounts		82.00
Purchases Returns and Allowances		123.00
Freight In	992.00
Wages Expense	16,250.00
Rent Expense	3,300.00
Laundry Expense	179.00
Advertising Expense	455.00
Utilities Expense	963.00
Miscellaneous Expense	371.90
Totals	115,901.27	115,901.27

Table (13)

4.

To determine

Prepare a schedule of accounts receivable for 31^st August.

Explanation of Solution

Accounts receivable schedule: This is the schedule which is prepared to verify that the total balances of all the customers in the accounts receivable ledger, equals the balance of Accounts Receivable in the general ledger.

 Schedule of accounts receivable:

A Spa
Schedule of Accounts Receivable
August 31, 20__
Particulars	Amount($)
A Spa	870.59
Mr. J	87.50
Mr. C	546.62
Mr. H	1,564.99
Mr. L	535.48
Pleasant Spa	2,648.61
Total accounts receivable	6,253.79

Table (14)

Conclusion

Therefore, the total accounts receivable is $6,253.79.

5.

To determine

Prepare a schedule of accounts payable for 31^st August.

Explanation of Solution

Schedule of accounts payable: This is the schedule which is prepared to verify that the total balances of all the suppliers in the accounts payable ledger, equals the balance of Accounts Payable in the general ledger.

Schedule of accounts payable:

A Spa
Schedule of Accounts Payable
August 31, 20__
Particulars	Amount($)
Logo products	3,891.00
Office staples	118.00
Spa equipment, Inc.	3,235.00
Spa goods	4,675.00
Spa magic	3,594.00
Total accounts payable	15,513.00

Table (15)

Therefore, the total accounts payable is $15,513.