Concept explainers
The following transactions were completed by Yang Restaurant Equipment during January, the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Yang Restaurant Equipment does not track cash sales by customer.
Jan. 2 Issued Ck. No. 6981 to Tri-County Management Company for monthly rent, $850.
2 L. Yang, the owner, invested an additional $4,500 in the business.
4 Bought merchandise on account from Valentine and Company, invoice no. A694, $2,830; terms 2/10, n/30; dated January 2.
4 Received check from Velez Appliance for $980 in payment of invoice for $1,000 less discount.
4 Sold merchandise on account to L. Parrish, invoice no. 6483, $755.
6 Received check from Peck, Inc., $637, in payment of $650 invoice less discount.
7 Issued Ck. No. 6982, $588, to Frost and Son, in payment of invoice no. C127 for $600 less discount.
7 Bought supplies on account from Dudley Office Supply, invoice no. 190B, $93.54; terms net 30 days.
7 Sold merchandise on account to Ewing and Charles, invoice no. 6484, $1,115.
9 Issued credit memo no. 43 to L. Parrish, $47, for merchandise returned.
11 Cash sales for January 1 through January 10, $4,454.87.
11 Issued Ck. No. 6983, $2,773.40, to Valentine and Company, in payment of $2,830 invoice less discount.
14 Sold merchandise on account to Velez Appliance, invoice no. 6485, $2,100.
14 Received check from L. Parrish, $693.84, in payment of $755 invoice, less return of $47 and less discount.
Jan. 19 Bought merchandise on account from Crawford Products, invoice no. 7281, $3,700; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to invoice, $142 (total $3,842).
21 Issued Ck. No. 6984, $245, to A. Bautista for miscellaneous expenses not recorded previously.
21 Cash sales for January 11 through January 20, $3,689.
23 Received credit memo no. 163, $87, from Crawford Products for merchandise returned.
29 Sold merchandise on account to Bradford Supply, invoice no. 6486, $1,697.20.
29 Issued Ck. No. 6985 to Western Freight, $64, for freight charges on merchandise purchased January 4.
31 Cash sales for January 21 through January 31, $3,862.
31 Issued Ck. No. 6986, $65, to M. Pineda for miscellaneous expenses not recorded previously.
31 Recorded payroll entry from the payroll register: total salaries, $5,899.95; employees’ federal income tax withheld, $795; FICA Social Security tax withheld, $365.80, FICA Medicare tax withheld, $85.50.
31 Recorded the payroll taxes: FICA Social Security tax, $365.80; FICA Medicare tax, $85.50; state
31 Issued Ck. No. 6987, $4,653.65, for salaries for the month.
31 L. Yang, the owner, withdrew $1,000 for personal use, Ck. No. 6988.
Required
- 1. Record the transactions for January using a sales journal, page 91; a purchases journal, page 74; a cash receipts journal, page 56; a cash payments journal, page 63; and a general journal, page 119. Assume the periodic inventory method is used.
- 2.
Post daily all entries involving customer accounts to theaccounts receivable ledger. - 3. Post daily all entries involving creditor accounts to the accounts payable ledger.
- 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owner’s name in the Capital and Drawing accounts.
- 5. Add the columns of the special journals and prove the equality of the debit and credit totals.
- 6. Post the appropriate totals of the special journals to the general ledger.
- 7. Prepare a
trial balance . - 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?
1.
Journalize the transactions using types of journals.
Explanation of Solution
Sales Journal: Sales journal is one form of special journal book, which records all the sales transactions that are sold to customers on credit. In a single column sales journal, debit aspect of accounts receivable and credit aspect of inventory are recorded, and then posted to individual subsidiary customer account.
Purchase Journal: Purchase journal records all the merchandise purchase on credit. In a single column purchase journal, debit aspect of inventory and credit aspect of accounts payable are recorded, and then posted to individual subsidiary supplier account.
Cash Receipts Journal: It is a special book where only cash receipts transactions that are received from customers, merchandise sales and service made in cash and collection of accounts receivable are recorded.
Cash payments journal: Cash payments journal refers to the journal that is used to record the all transaction which is involve the cash payments. For example, the business paid cash to employees (salary paid to employees). Cash payments journal is used to record merchandise purchases made in cash and payments of accounts payable. It also records all other cash payments to various purposes. To include all these transactions, companies use multi-column cash payments journal.
General journal is a record of financial transaction. The transactions are recorded in the journal prior to posting them to the accounts in the general ledger.
Journalize the transactions using the types of journals.
- Sales Journal
Sales Journal | Page no: 91 | ||||
Date | Invoice No. | Customer Name | Post Ref. | Accounts Receivable Dr. | |
Sales Cr.($) | |||||
20__ | |||||
Jan. | 4 | 6483 | Mr. P | ✓ | 755 |
7 | 6484 | Mr. E&C | ✓ | 1,115 | |
14 | 6485 | Mr. V | ✓ | 2,100 | |
29 | 6486 | Mr. B | ✓ | 1,697 | |
31 | Total | $5,667 | |||
(113) (411) |
Table (1)
- Purchase Journal
Purchase Journal | Page no:74 | ||||||||
Date | Customer name | Invoice no. | Invoice date | Terms. | Post Ref. | Accounts Payable | Freight in | Purchases | |
Credit ($) | Debit ($) | Debit ($) | |||||||
20__ | |||||||||
Jan. | 4 | V Company | A691 | 2-Jan | 2/10,n/30 | ✓ | 2,830 | 2,830 | |
18 | C Company | 7281D | 16-Jan | 2/10,n/60 | ✓ | 3,842 | 142 | 3,700 | |
31 | Totals | 6,672 | 142 | 6,530 | |||||
(212) | (514) | (511) |
Table (2)
- Cash receipts journal
Cash Receipts Journal | Page:56 | |||||||
Date | Accounts Credited | Post ref. | Cash | Sales Discount | Accounts Receivable | Sales | Other Accounts | |
debit($) | debit($) | credit($) | credit($) | Credit($) | ||||
20__ | ||||||||
Jan | 2 | Mr. Y, Capital | 311 | 4,500 | 4,500 | |||
4 | V company | 980 | 20 | 1,000 | ||||
6 | P company | 637 | 13 | 650 | ||||
11 | 4,455 | 4,455 | ||||||
14 | Mr. P | 693 | 14.16 | 708 | ||||
21 | 3,689 | 3,689 | ||||||
31 | 3,862 | 3,862 | ||||||
31 | Totals | 18,816.71 | 47.16 | 2,358 | 12,005.87 | 4,500 | ||
(111) | (413) | (113) | (411) | (X) |
Table (3)
- Cash payment journal
Cash payments journal | Page:63 | |||||||
Date | CK no | Account Debited | Post ref. | Other accounts | Accounts payable | Purchases discounts | Cash | |
debit($) | debit($) | credit($) | credit($) | |||||
20__ | ||||||||
Jan | 2 | 6981 | Rent expense | 627 | 850 | 850 | ||
7 | 6982 | F company | ✓ | 600 | 12 | 588 | ||
11 | 6983 | V Company | ✓ | 2,830 | 57 | 2,773.4 | ||
21 | 6984 | Miscellaneous expense | 631 | 245 | 245 | |||
29 | 6985 | Freight in | 514 | 64 | 64 | |||
31 | 6986 | Miscellaneous expense | 631 | 65 | 65 | |||
31 | 6987 | Salaries payable | 215 | 4,653 | 4,653.65 | |||
31 | 6988 | Mr. Y drawing | 312 | 1,000 | 1,000 | |||
31 | Totals | 6,887.65 | 3,430 | 68.6 | 10,239.05 | |||
(X) | (212) | (513) | (111) |
Table (4)
- General journal
General journal | Page:100 | ||||
Date | Description | Post ref. | Debit ($) | Credit($) | |
20___ | |||||
Jan. | 7 | Supplies | 115 | 93.54 | |
Accounts payable, D company | 212/ | 93.54 | |||
(Record purchase of supplies from D company | |||||
invoice no. 1906B, terms net 30) | |||||
9 | Sales returns and allowances | 412 | 47 | ||
Accounts receivable, Mr. L | 113/ | 47 | |||
(Record issued credit memo no.43) | |||||
23 | Accounts payable, C company | 212/ | 87 | ||
Purchase returns and allowances | 512 | 87 | |||
(Received credit memo for return of | |||||
merchandise memo no:163) | |||||
31 | Salaries expense | 621 | 5,899.95 | ||
Employee's federal income tax payable | 216 | 795 | |||
FICA social security tax payable | 217 | 365 | |||
FCIA Medicare tax payable | 218 | 85 | |||
Salaries payable | 215 | 4,653.65 | |||
(Record salaries paid for the month) | |||||
31 | Payroll tax expense | 622 | 805.3 | ||
FICA social security tax payable | 217 | 365.8 | |||
Medicare tax payable | 218 | 85.5 | |||
State unemployment tax payable | 219 | 318.6 | |||
Federal unemployment tax payable | 220 | 35.4 | |||
( Record employer's share of FCIA taxes and | |||||
employer's state and federal unemployment | |||||
taxes for the month) |
Table (5)
2.
Record the entries from customer accounts to the accounts receivable ledger.
Explanation of Solution
Account receivable: The amount of money to be received by a company for the sale of goods and services to the customers is referred to as account receivable.
Accounts Receivable Ledger | ||||||
Name: B company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20___ | ||||||
Jan | 29 | S91 | 1,697 | 1,697.2 | ||
Name: E and C company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20___ | ||||||
Jan | 7 | S91 | 1,115 | 1,115 | ||
Name: Mr. P | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20___ | ||||||
Jan | 4 | S91 | 755 | 755 | ||
9 | J119 | 47 | 708 | |||
14 | CR56 | 708 | ||||
Name: P company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20___ | ||||||
Jan | 1 | Balance | ✓ | 650 | ||
6 | CR38 | 650 | 0 | |||
Name: V company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20___ | ||||||
Jan | 1 | Balance | ✓ | 1,000 | ||
4 | CR56 | 1,000 | 0 | |||
14 | S91 | 2,100 | 2,100 |
Table (6)
3.
Record the entries from creditor accounts to the accounts payable ledger.
Explanation of Solution
Account payable: The amount of money to be paid by a company for the purchase of goods and services from the seller is referred to as account payable.
Record the entries from creditor accounts to the accounts payable ledger.
Accounts payable ledger | ||||||
Name: C company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20___ | ||||||
Jan | 19 | P74 | 3,842 | 3,842 | ||
23 | J119 | 87 | 3,755 | |||
Name: D company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20___ | ||||||
Jan | 7 | J119 | 93.54 | 93.54 | ||
Name: F and sons | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20___ | ||||||
Jan | 1 | Balance | 600 | |||
7 | CP63 | 600 | 0 | |||
Name: V company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20___ | ||||||
Jan | 4 | P74 | 2,830 | 2,830 | ||
11 | CP63 | 2,830 | 0 |
Table (7)
4.
Post the prepared journals and other accounts column to general ledger.
Explanation of Solution
Posting of transaction: The process of transferring the journalized transactions into the accounts of the ledger is known as posting of transaction.
Post the prepared journals to the general ledger:
General ledger | |||||||
Account: Cash | Account No:111 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 1 | Balance | ✓ | 8,740 | |||
31 | CR56 | 18,816.71 | 27,556.71 | ||||
31 | CP63 | 10,239.05 | 17,317.66 | ||||
Account: Accounts receivable | Account No:113 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 1 | Balance | ✓ | 1,650 | |||
9 | J119 | 47 | 1,603 | ||||
31 | S91 | 5,667.20 | 7,270.2 | ||||
31 | CR56 | 2,358.00 | 4,912 | ||||
Account: Merchandise inventory | Account No:114 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 1 | Balance | ✓ | 20,584 | |||
Account: Supplies | Account No:115 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 1 | Balance | ✓ | 592 | |||
7 | J119 | 93.54 | 685.54 | ||||
Account: Prepaid insurance | Account No:116 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 1 | Balance | ✓ | 390 | |||
Account: Equipment | Account No:121 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 1 | Balance | ✓ | 3,644 | |||
Account: Accounts payable | Account No:212 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | Balance | ✓ | 600 | |||
7 | J119 | 93.54 | 693.54 | ||||
23 | J119 | 87 | 606.54 | ||||
31 | P74 | 6,672 | 7,278.54 | ||||
31 | CP63 | 3,430 | 3,848.54 | ||||
Account: Salaries payable | Account No:215 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | J119 | 4,653.65 | 4,653.65 | |||
31 | CP63 | 4,653.65 | |||||
Account: Employees federal income tax payable | Account No:216 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | J119 | 795 | 795 | |||
Account: FICA social security tax payable | Account No:217 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | J119 | 365.8 | 365.8 | |||
31 | J119 | 365.8 | 731.6 | ||||
Account: FICA Medicare payable | Account No:218 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | J119 | 85.5 | 85.5 | |||
31 | J119 | 85.5 | 171 | ||||
Account: State Unemployment tax payable | Account No:219 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | J119 | 318.6 | 318.6 | |||
Account: Federal unemployment tax payable | Account No:220 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | J119 | 35.4 | 35.4 | |||
Account: Mr. Y Capital | Account No:311 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 1 | Balance | ✓ | 35,000 | |||
2 | CR56 | 4,500 | 39,500 | ||||
Account: Mr. Y Drawing | Account No:312 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | CP63 | 1,000 | 1,000 | |||
Account: Sales | Account No:411 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | S91 | 5,667 | 5,667.2 | |||
31 | CR56 | 12,005.9 | 17,673.07 | ||||
Account: Sales return and allowance | Account No:412 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 9 | J119 | 47 | 47 | |||
Account: Sales discounts | Account No:413 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | CR56 | 47 | 47 | |||
Account: Purchases | Account No:511 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | P74 | 6,530 | 6,530 | |||
Account: Purchases returns and allowances | Account No:512 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 23 | J119 | 87 | 87 | |||
Account: Purchase discounts | Account No:513 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | CP63 | 68.6 | 68.6 | |||
Account: Freight in | Account No:514 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 29 | CP63 | 64 | 64 | |||
31 | P74 | 142 | 206 | ||||
Account: Salary expense | Account No:621 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | J119 | 5,899.95 | 5,899.95 | |||
Account: Payroll tax expense | Account No:622 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 31 | J119 | 805.3 | 805.3 | |||
Account: Rent expense | Account No:627 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 2 | CP63 | 850 | 850 | |||
Account: Miscellaneous expense | Account No:631 | ||||||
Date | Item | Post ref | Debit | Credit | Balance | ||
20___ | ($) | ($) | Debit ($) | Credit($) | |||
Jan | 21 | CP63 | 245 | 245 | |||
31 | CP63 | 65 | 310 |
Table (8)
5.
Report the equality of debit and credit totals in special journal column.
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.
Equality of debit and credit column in purchase journal:
EQUALITY OF DEBITS AND CREDITS | |||
DEBITS ($) | CREDITS ($) | ||
142 | 6,672 | ||
6,530 | |||
6,672 | 6,672 |
Table (9)
Equality of debit and credit column in Cash receipt journal:
EQUALITY OF DEBITS AND CREDITS | |||
DEBITS ($) | CREDITS ($) | ||
47.16 | 4,500 | ||
18,816.71 | 2,358 | ||
12,005.87 | |||
18,816.87 | 18,863.87 |
Table (10)
Equality of debit and credit column in Cash payment journal:
EQUALITY OF DEBITS AND CREDITS | |||
DEBITS ($) | CREDITS ($) | ||
6,877.65 | 68.6 | ||
3,430.00 | 10,239.05 | ||
10,307.65 | 10,307.65 |
Table (11)
2, 3, 4, and 6.
Post the appropriate special journal to the general ledger.
Explanation of Solution
General ledger: General ledger is a record of all accounts of assets, liabilities, and stockholders’ equity, necessary to prepare financial statements.
7.
Prepare a trail balance of Y Company.
Explanation of Solution
Prepare a trail balance of Y Company.
Y company | ||
Trail balance | ||
January 31, 20__ | ||
Account Name | Debit ($) | Credit($) |
Cash | 17,317.66 | |
Accounts receivable | 4,912.2 | |
Merchandise inventory | 20,584 | |
Supplies | 685.54 | |
Prepaid insurance | 390 | |
Equipment | 3,644 | |
Accounts payable | 3,848.54 | |
Employee's federal income tax payable | 795 | |
FICA social security tax payable | 731.6 | |
FICA Medicare tax payable | 171 | |
State unemployment tax payable | 318.6 | |
Federal unemployment tax payable | 35.4 | |
Mr. Y Capital | 39,500 | |
Mr. Y Drawings | 1,000 | |
Sales | 17,673.07 | |
Sales returns and allowances | 47 | |
Sales discounts | 47.16 | |
Purchases | 6,530 | |
Purchases returns and allowances | 87 | |
Purchases discounts | 68.6 | |
Freight in | 206 | |
Salary expense | 5,899.95 | |
Payroll tax expense | 805.3 | |
Rent expense | 850 | |
Miscellaneous expense | 310 | |
63,228.81 | 63,228.81 |
Table (12)
8.
Prepare a schedule for accounts receivable and accounts payable.
Explanation of Solution
Schedule for the accounts receivable:
Y company | |
Schedule of accounts receivable | |
January 31, 20__ | |
Particulars | Amount($) |
B company | 1,697.2 |
E and C company | 1,115 |
V company | 2,100 |
Total accounts receivable | 4912.2 |
Table (13)
H company | |
Schedule of accounts payable | |
January 31, 20__ | |
Particulars | Amount($) |
C company | 3,755 |
D company | 93.54 |
Total accounts payable | 3848.54 |
Table (14)
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Principles of Accounting Volume 2
- The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. If you are using the form-based approach with QuickBooks or general ledger, select Cash Sales as the customer for all cash sales transactions. Required 1. Record the transactions for January using a sales journal, page 73; a purchases journal, page 56; a cash receipts journal, page 38; a cash payments journal, page 45; and a general journal, page 100. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals on scratch paper. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forwardThe following transactions were completed by Yang Restaurant Equipment during January, the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Yang Restaurant Equipment does not track cash sales by customer. If you are using the form-based approach with QuickBooks or general ledger, select Cash Sales as the customer for all cash sales transactions. Required 1. Record the transactions for January using a general journal, page 1. Assume the periodic inventory method is used. If using QuickBooks, record transactions using either the journal entry method or the forms-based approach, as directed by your instructor. The chart of accounts is as follows: 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily the general journal entries to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Prepare a trial balance. 6. Prepare a schedule of accounts receivable (A/R Aging Detail report in QuickBooks) and a schedule of accounts payable (A/P Aging Detail report in QuickBooks). Do the totals equal the balances of the related controlling accounts? If using QuickBooks or general ledger, ignore Steps 2, 3, and 4.arrow_forwardThe following transactions were completed by Yang Restaurant Equipment during January, the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Yang Restaurant Equipment does not track cash sales by customer. If you are using the form-based approach with QuickBooks or general ledger, select Cash Sales as the customer for all cash sales transactions. Required 1. Record the transactions for January using a sales journal, page 91; a purchases journal, page 74; a cash receipts journal, page 56; a cash payments journal, page 63; and a general journal, page 119. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals on scratch paper. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forward
- On March 24, MS Companys Accounts Receivable consisted of the following customer balances: S. Burton 310 A. Tangier 240 J. Holmes 504 F. Fullman 110 P. Molty 90 During the following week, MS made a sale of 104 to Molty and collected cash on account of 207 from Burton and 360 from Holmes. Prepare a schedule of accounts receivable for MS at March 31, 20--.arrow_forwardOn December 31, the Investment in Branch account on the home office books of the Unlimited Company shows a balance of P168,000. The following are some of the transactions between the home office and the branch:a. Merchandise billed at P12,300 was shipped by the home office to the branch on December 28. The merchandise is in transit and has not been recognized on the books of the branch.b. The branch collected a home office accounts receivable of P50,000 but failed to notify the home office of this collection.c. The home office was charged P12,800 when the branch returned merchandise to the home office on December 31. The merchandise is in transit.d. The home office recorded incorrectly the branch net income for November at P22,500. The branch reported net income of P25,200.1. The unadjusted balance of the Home Office account was: 2. What is the adjusted balance of the Home Office account?arrow_forwardOn December 31, the Investment in Branch account on the home office books of the SG Company shows a balance of P168,000. The following are some of the transactions between the home office and the branch: a. Merchandise billed at P12,300 was shipped by the home office to the branch on December 28. The merchandise is in transit and has not been recognized on the books of the branch. b. The branch collected a home office accounts receivable of P50,000 but failed to notify the home office of this collection. c. The home office was charged P12,800 when the branch returned merchandise to the home office on December 31. The merchandise is in transit. d. The home office recorded incorrectly the branch net income for November at P22,500. The branch reported net income of P25,200. The unadjusted balance of the Home Office account was:arrow_forward
- Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $465,000 from Commerce Bank after signing a 12-month, 7 percent, promissory note. June 6 Purchased merchandise on account at a cost of $66,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. Aug. 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance amounting to $18,600. Dec. 31 Determined salary and wages of $31,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to security service. Required: 1. & 2. Make journal entries for each of the transactions through August 31 and adjusting entries required on December 31. 3. Show how all of the liabilities arising from these items are reported on the balance sheet…arrow_forwardSelected transactions of Lizard Lick Corporation during Year 1 are as follows: Jan. 5 Purchased merchandise from Boston Company for $30,000; terms, 2/10, n/30. Purchases and accounts payable are recorded by Lizard Lick using the net price method. 26 Paid the January 5 invoice. Mar. 31 Purchased a van for $19,950 from Hill Sales Company, paying $9,950 in cash and issuing a 12%, 1-year note for the balance of the purchase price. May 1 Borrowed money from Mebane National Bank by discounting its own 1-year, non-interest-bearing note made out for the maturity value of $50,000 at an interest rate of 12%. Nov. 2 Received $500 from Carr Mill Playhouse as a deposit. The amount is to be refunded after certain rental furniture to be used in a play is returned on January 7, Year 2. 5 Made sales on credit to Jones Company for $15,000. Sales taxes of 6½% were added to the $15,000 price (ignore cost of goods sold). 6 Purchased another van at a cost of $18,000 from a company located in a state that…arrow_forwardDuring the second half of December 20-1, TJ’s Specialty Shop engaged in the followingtransactions:Dec. 16 Received payment from Lucy Greene on account, $1,960.16 Sold merchandise on account to Kim Fields, $160, plus sales tax of $8.Sale No. 640.17 Returned merchandise to Evans Essentials for credit, $150.18 Issued Check No. 813 to Evans Essentials in payment of December 1balance of $1,250, less the credit received on December 17.19 Sold merchandise on account to Lucy Greene, $620, plus tax of $31.Sale No. 641.22 Received payment from John Dempsey on account, $1,560.23 Issued Check No. 814 for the purchase of supplies, $120. (Debit Supplies)24 Purchased merchandise on account from West Wholesalers, $1,200.Invoice No. 465, dated December 24, terms n/30.26 Purchased merchandise on account from Nathen Co., $800.Invoice No. 817, dated December 26, terms 2/10, n/30.27 Issued Check No. 815 to KC Power & Light (Utilities Expense) for themonth of December, $630.27 Sold merchandise on…arrow_forward
- Preston Company sells candy wholesale, primarily to vending machine operators. Terms of sales on account are 2/10, n/30, FOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year: May 1. Received $2,156 cash from L. Reilly in payment of April 22 invoice of $2,200, less cash discount. May 4. Received $1,096 cash in payment of $1,000 note receivable and interest of $96. May 7. Received $588 cash from K.L. Shannon in payment of April 29 invoice of $600, less cash discount. May 8. Sold merchandise on account to D. Padilla, invoice no. 272, $489. May 16. Cash sales for first half of May, $2,265. May 17. Received cash from D. Padilla in payment of invoice no. 272, less cash discount. May 20. Received $325 cash from L.N. Salas in payment of April 16 invoice, no discount. May 21. Sold merchandise on account to R.O. Wilcox, invoice no. 273, $935. May 24. Received $220 cash refund for return of defective equipment that was…arrow_forwardVigeland Company completed the following transactions during Year 1. Vigeland’s fiscal year ends on December 31. January 15 Purchased and paid for merchandise. The invoice amount was $15,200; assume a perpetual inventory system. April 1 Borrowed $774,000 from Summit Bank for general use; signed a 10-month, 9% annual interest-bearing note for the money. June 14 Received a $24,000 customer deposit for services to be performed in the future. July 15 Performed $3,450 of the services paid for on June 14. December 12 Received electric bill for $26,160. Vigeland plans to pay the bill in early January. December 31 Determined wages of $15,000 were earned but not yet paid on December 31 (disregard payroll taxes). Required: Prepare journal entries for each of these transactions. Prepare the adjusting entries required on December 31.arrow_forwardMain Corporation has operated a branch in Cavite for one year. Shipments are billed to the branch at cost. The branch carries its own accounts receivable, makes its own collections, and pays its own expenses. The branch reported an inventory on December 31, 2021: Outsiders, P3,391; Home office, P7,625 The transactions for the year are given effect to in the trial balance below: (see image) QUESTION: Using the same information above, shipments to Branch account in the Home Office books on January 1, 2022arrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,