Chapter 10, Problem 1MP

Geoff and Sandy Harland own and operate Wayward Kennel and Pet Supply. Their motto is, “If your pet is not becoming to you, he should be coming to us.” The Harlands maintain a sales tax payable account throughout the month to account for the 6% sales tax. They use a general journal, general ledger, and accounts receivable ledger. The following sales and cash collections took place during the month of September:

Sept. 2    Sold a fish aquarium on account to Ken Shank, $125 plus tax of $7.50, terms n/30. Sale No. 101.

3    Sold dog food on account to Nancy Truelove, $68.25 plus tax of $4.10, terms n/30. Sale No. 102.

5    Sold a bird cage on account to Jean Warkentin, $43.95 plus tax of $2.64, terms n/30. Sale No. 103.

8    Cash sales for the week were $2,332.45 plus tax of $139.95.

10    Received cash for boarding and grooming services, $625 plus tax of $37.50.

11    Jean Warkentin stopped by the store to point out a minor defect in the bird cage purchased in Sale No. 103. The Harlands offered a sales allowance of $10 plus tax on the price of the cage which satisfied Warkentin.

12    Sold a cockatoo on account to Tully Shaw, $1,200 plus tax of $72, terms n/30. Sale No. 104.

14    Received cash on account from Rosa Alanso, $256.

15    Rosa Alanso returned merchandise, $93.28 including tax of $5.28.

15    Cash sales for the week were $2,656.85 plus tax of $159.41.

16    Received cash on account from Nancy Truelove, $58.25.

18    Received cash for boarding and grooming services, $535 plus tax of $32.10.

19    Received cash on account from Ed Cochran, $63.25.

20    Sold pet supplies on account to Susan Hays, $83.33 plus tax of $5, terms n/30. Sale No. 105.

21    Sold three Labrador Retriever puppies to All American Day Camp, $375 plus tax of $22.50, terms n/30. Sale No. 106.

22    Cash sales for the week were $3,122.45 plus tax of $187.35.

23    Received cash for boarding and grooming services, $515 plus tax of $30.90.

25    Received cash on account from Ken Shank, $132.50.

26    Received cash on account from Nancy Truelove, $72.35.

27    Received cash on account from Joe Gloy, $273.25.

28    Borrowed cash to purchase a pet limousine, $11,000.

29    Cash sales for the week were $2,835.45 plus tax of $170.13.

30    Received cash for boarding and grooming services, $488 plus tax of $29.28.

Wayward had the following general ledger account balances as of September 1:

Wayward also had the following accounts receivable ledger balances as of September 1:

New customers opening accounts during September were as follows:

All American Day Camp

3025 Old Mill Run

Bloomington, IN 47408-1080

Tully Shaw

3315 Longview Avenue

Bloomington, IN 47401-7223

Susan Hays

1424 Jackson Creek Road

Nashville, IN 47448-2245

Jean Warkentin

1813 Deep Well Court

Bloomington, IN 47401-5124

Ken Shank

6422 E. Bender Road

Bloomington, IN 47401-7756

REQUIRED

1. 1. Enter the transactions for the month of September in a general journal. (Begin with page 7.)
2. 2. Post the entries to the general and subsidiary ledgers. Open new accounts for any customers who did not have a balance as of September 1.
3. 3. Prepare a schedule of accounts receivable.
4. 4. Compute the net sales for the month of September.

To determine

Journalize the transactions for the month of September.

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 for the month of September.

Transaction on September 2:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	2	Accounts Receivable, KS		122/✓	132.50
			Sales	401		125.00
			Sales Tax Payable	231		7.50
		(Record credit sale)

Table (1)

Description:

• Accounts Receivable, KS is an asset account. Since sales is made on account, the receivables 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.

Transaction on September 3:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	3	Accounts Receivable, NT		122/✓	72.35
			Sales	401		68.25
			Sales Tax Payable	231		4.10
		(Record credit sale)

Table (2)

Description:

• Accounts Receivable, NT is an asset account. Since sales is made on account, the receivables 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.

Transaction on September 5:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	5	Accounts Receivable, JW		122/✓	46.59
			Sales	401		43.95
			Sales Tax Payable	231		2.64
		(Record credit sale)

Table (3)

Description:

• Accounts Receivable, JW is an asset account. Since sales is made on account, the receivables 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.

Transaction on September 8:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	8	Cash		101	2,472.40
			Sales	401		2,332.45
			Sales Tax Payable	231		139.95
		(Record cash sales)

Table (4)

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.

Transaction on September 10:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	10	Cash		101	662.50
			Boarding and Grooming Revenue	402		625.00
			Sales Tax Payable	231		37.50
		(Record cash sales)

Table (5)

Description:

• Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
• Boarding and Grooming Revenue 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.

Transaction on September 11:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	11	Sales Returns and Allowances		401.1	10.00
		Sales Tax Payable		231	0.60
			Accounts Receivable, JW	122/✓		10.60
		(Record grant of sales allowance)

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, JW is an asset account. Since sales allowance is granted, amount to be received has decreased, asset account is decreased, and a decrease in asset is credited.

Working Note 1:

Compute sales tax payable amount.

$\begin{array}{c}\text{Sales tax payable = Sales returns×Sales tax percentage}\\ \text{= \$10×6\%}\\ \text{= \$0}\text{.60}\end{array}$

Working Note 2:

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

$\begin{array}{c}\text{Accounts receivable, JW = Sales returns+Sales tax payable}\\ \text{= \$10}\text{.00+\$0}\text{.60}\\ \text{= \$10}\text{.60}\end{array}$

Transaction on September 12:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	12	Accounts Receivable, TS		122/✓	1,272
			Sales	401		1,200
			Sales Tax Payable	231		72
		(Record credit sale)

Table (7)

Description:

• Accounts Receivable, TS is an asset account. Since sales is made on account, the receivables 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.

Transaction on September 14:

Page: 7
Date		Account Titles and Explanation		Post. Ref.	Debit ($)	Credit ($)
September	14	Cash		101	256
			Accounts Receivable, RA	122/✓		256
		(Record cash received for sales on account)

Table (8)

Description:

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

Transaction on September 15:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	15	Sales Returns and Allowances		401.1	88.00
		Sales Tax Payable		231	5.28
			Accounts Receivable, RA	122/✓		93.28
		(Record goods returned)

Table (9)

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, RA 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.

Transaction on September 15:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	15	Cash		101	2,816.26
			Sales	401		2,656.85
			Sales Tax Payable	231		159.41
		(Record cash sales)

Table (10)

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.

Transaction on September 16:

Page: 7
Date		Account Titles and Explanation		Post. Ref.	Debit ($)	Credit ($)
September	16	Cash		101	58.25
			Accounts Receivable, NT	122/✓		58.25
		(Record cash received for sales on account)

Table (11)

Description:

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

Transaction on September 18:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	18	Cash		101	567.10
			Boarding and Grooming Revenue	402		535.00
			Sales Tax Payable	231		32.10
		(Record cash sales)

Table (12)

Description:

• Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
• Boarding and Grooming Revenue 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.

Transaction on September 19:

Page: 7
Date		Account Titles and Explanation		Post. Ref.	Debit ($)	Credit ($)
September	19	Cash		101	63.25
			Accounts Receivable, EC	122/✓		63.25
		(Record cash received for sales on account)

Table (13)

Description:

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

Transaction on September 20:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	20	Accounts Receivable, SH		122/✓	88.33
			Sales	401		83.33
			Sales Tax Payable	231		5.00
		(Record credit sale)

Table (14)

Description:

• Accounts Receivable, SH is an asset account. Since sales is made on account, the receivables 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.

Transaction on September 21:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	21	Accounts Receivable, AD Camp		122/✓	397.50
			Sales	401		375.00
			Sales Tax Payable	231		22.50
		(Record credit sale)

Table (15)

Description:

• Accounts Receivable, AD Camp is an asset account. Since sales is made on account, the receivables 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.

Transaction on September 22:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	22	Cash		101	3,309.80
			Sales	401		3,122.45
			Sales Tax Payable	231		187.35
		(Record cash sales)

Table (16)

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.

Transaction on September 23:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	23	Cash		101	545.90
			Boarding and Grooming Revenue	402		515.00
			Sales Tax Payable	231		30.90
		(Record cash sales)

Table (17)

Description:

• Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
• Boarding and Grooming Revenue 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.

Transaction on September 25:

Page: 7
Date		Account Titles and Explanation		Post. Ref.	Debit ($)	Credit ($)
September	25	Cash		101	132.50
			Accounts Receivable, KS	122/✓		132.50
		(Record cash received for sales on account)

Table (18)

Description:

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

Transaction on September 26:

Page: 7
Date		Account Titles and Explanation		Post. Ref.	Debit ($)	Credit ($)
September	26	Cash		101	72.35
			Accounts Receivable, NT	122/✓		72.35
		(Record cash received for sales on account)

Table (19)

Description:

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

Transaction on September 27:

Page: 7
Date		Account Titles and Explanation		Post. Ref.	Debit ($)	Credit ($)
September	27	Cash		101	273.25
			Accounts Receivable, JG	122/✓		273.25
		(Record cash received for sales on account)

Table (20)

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 September 28:

Page: 7
Date		Account Titles and Explanation		Post. Ref.	Debit ($)	Credit ($)
September	28	Cash		101	11,000
			Notes Payable	201		11,000
		(Record cash borrowed)

Table (21)

Description:

• Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
• Notes Payable is a liability account. Since the payable increased, the liability increased, and an increase in liability is credited.

Transaction on September 29:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	29	Cash		101	3,005.58
			Sales	401		2,835.45
			Sales Tax Payable	231		170.13
		(Record cash sales)

Table (22)

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.

Transaction on September 30:

Page: 7
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
September	30	Cash		101	517.28
			Boarding and Grooming Revenue	402		488.00
			Sales Tax Payable	231		29.28
		(Record cash sales)

Table (23)

Description:

• Cash is an asset account. Since cash is received, asset account increased, and an increase in asset is debited.
• Boarding and Grooming Revenue 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.

To determine

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

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 ($)	Credit ($)
September	1	Balance	✓			23,500.25
	8		J7	2,472.40		25,972.65
	10		J7	662.50		26,635.15
	14		J7	256.00		26,891.15
	15		J7	2,816.26		29,707.41
	16		J7	58.25		29,765.66
	18		J7	567.10		30,332.76
	19		J7	63.25		30,396.01
	22		J7	3,309.80		33,705.81
	23		J7	545.90		34,251.71
	25		J7	132.50		34,384.21
	26		J7	72.35		34,456.56
	27		J7	273.25		34,729.81
	28		J7	11,000.00		45,729.81
	29		J7	3,005.58		48,735.39
	30		J7	517.28		49,252.67

Table (24)

ACCOUNT    Accounts Receivable                                               ACCOUNT NO. 122
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
September	1	Balance	✓			850.75
	2		J7	132.50		983.25
	3		J7	72.35		1,055.60
	5		J7	46.59		1,102.19
	11		J7		10.60	1,091.59
	12		J7	1,272.00		2,363.59
	14		J7		256.00	2,107.59
	15		J7		93.28	2,014.31
	16		J7		58.25	1,956.06
	19		J7		63.25	1,892.81
	20		J7	88.33		1,981.14
	21		J7	397.50		2,378.64
	25		J7		132.50	2,246.14
	26		J7		72.35	2,173.79
	27		J7		273.25	1,900.54

Table (25)

ACCOUNT    Notes Payable                                                        ACCOUNT NO. 201
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
September	1	Balance	✓				2,500
	28		J7		11,000		13,500

Table (26)

ACCOUNT    Sales Tax Payable                                                 ACCOUNT NO. 231
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
September	1	Balance	✓				909.90
	2		J7		7.50		917.40
	3		J7		4.10		921.50
	5		J7		2.64		924.14
	8		J7		139.95		1,064.09
	10		J7		37.50		1,101.59
	11		J7	0.60			1,100.99
	12		J7		72.00		1,172.99
	15		J7	5.28			1,167.71
	15		J7		159.41		1,327.12
	18		J7		32.10		1,359.22
	20		J7		5.00		1,364.22
	21		J7		22.50		1,386.72
	22		J7		187.35		1,574.07
	23		J7		30.90		1,604.97
	29		J7		170.13		1,775.10
	30		J7		29.28		1,804.38

Table (27)

ACCOUNT    Sales                                                                         ACCOUNT NO. 401
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
September	1	Balance	✓				13,050.48
	2		J7		125.00		13,050.48
	3		J7		68.25		13,243.73
	5		J7		43.95		13,287.68
	8		J7		2,332.45		15,620.13
	12		J7		1,200.00		16,820.13
	15		J7		2,656.85		19,476.98
	20		J7		83.33		19,560.31
	21		J7		375.00		19,935.31
	22		J7		3,122.45		23,057.76
	29		J7		2,835.45		25,893.21

Table (28)

ACCOUNT    Sales Returns and Allowances                            ACCOUNT NO. 401.1
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
September	1	Balance	✓			86.00
	11		J7	10.00		96.00
	15		J7	88.00		184.00

Table (29)

ACCOUNT    Boarding and Grooming Revenue                        ACCOUNT NO. 402
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
September	1	Balance	✓				2,115.00
	10		J7		625.00		2,740.00
	18		J7		535.00		3,275.00
	23		J7		515.00		3,790.00
	30		J7		488.00		4,278.00

Table (30)

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

NAME          AD Camp
ADDRESS   3025, OM Run, City B, State IN 47408-1080
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
September	21		J7	397.50		397.50

Table (31)

NAME          RA
ADDRESS    2541, E Street, City B, State IN 47401-5356
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
September	1	Balance	✓			456.00
	14		J7		256.00	200.00
	15		J7		93.28	106.72

Table (32)

NAME          EC
ADDRESS    2669, W Drive, City B, State IN 47401-5446
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
September	1	Balance	✓			63.25
	19		J7		63.25	0

Table (33)

NAME          JG
ADDRESS   1458, P Avenue, City B, State IN 47304-2682
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
September	1	Balance	✓			273.25
	27		J7		273.25	0

Table (34)

NAME          SH
ADDRESS   1424, JC Road, City N, State IN 47448-2245
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
September	20		J7	88.33		88.33

Table (35)

NAME          KS
ADDRESS   6422, EB Road, City B, State IN 47401-7756
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
September	2	Balance	J7	132.50		132.50
	19		J7		132.50	0

Table (36)

NAME          TS
ADDRESS   3315, L Avenue, City N, State IN 47401-7223
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
September	12		J7	1,272.00		1,272.00

Table (37)

NAME          NT
ADDRESS   2300, EN Road, City C, State IN 46229-4824
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
September	1	Balance	✓			58.25
	3		J7	72.35		130.60
	16		J7		58.25	72.35
	26		J7		72.35	0

Table (38)

NAME          JW
ADDRESS   1813, DP Court, City B, State IN 47401-5124
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
September	5		J7	46.59		46.59
	3		J7		10.60	35.99

Table (39)

To determine

Prepare the schedule of accounts receivable for W Kennel and P Supply as at September 30, 20--.

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.

Prepare the schedule of accounts receivable for W Kennel and P Supply as at September 30, 20--.

W Kennel and P Supply
Schedule of Accounts Receivable
September 30, 20--
AD Camp	$397.50
RA	106.72
SH	88.33
TS	1,272.00
JW	35.99
Total	$1,900.54

Table (40)

Note: Refer to Requirement 2 for the value and computation of customer balances.

Conclusion

Thus, the schedule of accounts receivable of W Kennel and P Supply shows a balance of $1,900.54, as of September 30, 20--.

To determine

Ascertain the net sales for W Kennel and P Supply for the month of September.

Explanation of Solution

Net sales: The amount of price of merchandise sold during a certain period is referred to as sales revenue. Net sales is the gross sales, minus sales returns and allowances, and sales discounts.

Formula to compute net sales:

$\text{Net sales = Gross sales–Sales returns and allowances–Sales discounts}$

Ascertain the net sales for W Kennel and P Supply for the month of September.

$\begin{array}{c}\text{Net sales = Gross sales–Sales returns and allowances–Sales discounts}\\ \text{=\$12,842}\text{.73–\$98}\text{.00–\$0}\\ \text{=\$12,744}\text{.73}\end{array}$

Note: Refer to Requirement 2 for the value and computation of the balances.

Conclusion

Thus, net sales for W Kennel and P Supply for the month of September is $12,744.73.