Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances.

Question

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Answer 1

Question

Chapter 12, Problem 7SPB

1.

To determine

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances.

1.

Expert Solution

Explanation of Solution

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.

The following are the some examples of transactions that would be recorded in the Other Accounts credit column of the cash receipts journal:

• Cash received as interest on notes payable
• Interest revenue received from debtors
• Cash receipts from bank loans
• Cash receipts for capital investments

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances:

College accounting, chapters 1-9, Chapter 12, Problem 7SPB

Table (1)

Verification of total debit and credit column:

$Total Debit = Total Credit($15,174.85+$97.65 ) = ($3,481.00+$11,230.00+$561.50) =$15,272.50 =$15,272.5$

Working note 1:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=(Cash sales + 5% on sales tax)=[$2,800+(5%×$2,800)]=[$2,800+$140]=$2,940$

Working note 2:

Calculate the amount of bank credit card expense on dated 5^th January:

$Bank credit card expense on dated 5thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,200+(5%×$1,200)]×3%=[$1,200+$60]×3%=$37.80$

Working note 3:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,200+(5%×$1,200)−$37.80]=[$1,200+$60−$37.80]=$1,222$

Working note 4:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=(Cash sales + 5% on sales tax)=[$3,100+(5%×$3,100)]=[$3,100+$155]=$3,255$

Working note 5:

Calculate the amount of bank credit card expense on dated 12^th January:

$Bank credit card expense on dated 12thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,900+(5%×$1,900)]×3%=[$1,900+$95]×3%=$59.85$

Working note 6:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,900+(5%×$1,900)−$59.85]=[$1,900+$95−$59.85]=$1,935.15$

Working note 7:

Calculate the amount of cash on dated 19^th January:

$Cash(debit)on dated 19thJanuary}=(Cash sales + 5% on sales tax)=[$2,230+(5%×$2,230)]=[$2,230+$111.5]=$2,341.50$

Use the general journal to record the sales returns and allowances:

General Journal: It is a book where all the monetary transactions are recorded in the form of journal entries on the date of their occurrence in a chronological order.

Transaction on January 11:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	11	Sales Returns and Allowances		401.1	40.00
		Sales Tax Payable		231	2.00
			Accounts Receivable, MA	122/✓		42.00
		(Record merchandise returned)

Table (2)

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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $40×5%= $2$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable = Sales returns+Sales tax payable= $40.00+$2.00= $42.00$

Transaction on January 18:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	21	Sales Returns and Allowances		401.1	31.00
		Sales Tax Payable		231	1.55
			Accounts Receivable, RZ	122/✓		32.55
		(Record merchandise returned)

Table (3)

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, RZ 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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $31×5%= $1.55$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable, A Manufacturing} = Sales returns+Sales tax payable= $31.00+$1.55= $32.55$

2.

To determine

Post the prepared journal to the general ledger, and to the accounts receivable ledger.

2.

Expert Solution

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 prepared journals to the general ledger:

ACCOUNT Cash ACCOUNT NO. 101
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			2,890.75
	31		CR10	15,174.85		18,065.60

Table (4)

ACCOUNT Accounts Receivable ACCOUNT NO. 122
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			6,300.00
	11		J8		42.00	6,258.00
	21		J8		32.55	6,225.45
	31		CR10		3,481.00	2,744.45

Table (5)

ACCOUNT Sales Tax Payable ACCOUNT NO. 231
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	2.00		2.00
	21		J8	1.55		3.55
	31		CR10		561.50		557.95

Table (6)

ACCOUNT Sales ACCOUNT NO. 401
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10		11,230.00		11,230.00

Table (7)

ACCOUNT Sales Returns and Allowances ACCOUNT NO. 401.1
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	40.00		40.00
	21		J8	31.00		71.00

Table (8)

ACCOUNT Bank Credit Card Expense ACCOUNT NO. 513
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10	97.65		97.65

Table (9)

Post the journals to the accounts receivable ledger.

NAME RB
ADDRESS 229 SE 65th Avenue, P, Or 97215-1451
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,400.00
	1		CR10		880.00	520.00
	11		J8		42.00	478.00

Table (10)

NAME D Manufacturing
ADDRESS 447 6th Avenue, F Staff, AZ 86004-6842
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			318.00
	25		CR10		318.00	0

Table (11)

NAME CH
Address 1462 N. S Blvd., Los Cruces, Nm 88012-7791
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--						815
January	1	Balance	✓		271	544
	3		CR10

Table (12)

NAME JS
ADDRESS 5997 Blackgold Lane, G, TX 76051-2366
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,481.00
	20		CR10		912.00	569.00

Table (13)

NAME RZ
ADDRESS 6881 S Drive, San D, CA 92127-8671
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			2,286.00
	15		CR10		1,100.00	1,186.00
	18		J8		32.55	1,153.45

Table (14)

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Answer 2

Question

Chapter 12, Problem 7SPB

1.

To determine

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances.

1.

Expert Solution

Explanation of Solution

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.

The following are the some examples of transactions that would be recorded in the Other Accounts credit column of the cash receipts journal:

• Cash received as interest on notes payable
• Interest revenue received from debtors
• Cash receipts from bank loans
• Cash receipts for capital investments

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances:

College accounting, chapters 1-9, Chapter 12, Problem 7SPB

Table (1)

Verification of total debit and credit column:

$Total Debit = Total Credit($15,174.85+$97.65 ) = ($3,481.00+$11,230.00+$561.50) =$15,272.50 =$15,272.5$

Working note 1:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=(Cash sales + 5% on sales tax)=[$2,800+(5%×$2,800)]=[$2,800+$140]=$2,940$

Working note 2:

Calculate the amount of bank credit card expense on dated 5^th January:

$Bank credit card expense on dated 5thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,200+(5%×$1,200)]×3%=[$1,200+$60]×3%=$37.80$

Working note 3:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,200+(5%×$1,200)−$37.80]=[$1,200+$60−$37.80]=$1,222$

Working note 4:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=(Cash sales + 5% on sales tax)=[$3,100+(5%×$3,100)]=[$3,100+$155]=$3,255$

Working note 5:

Calculate the amount of bank credit card expense on dated 12^th January:

$Bank credit card expense on dated 12thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,900+(5%×$1,900)]×3%=[$1,900+$95]×3%=$59.85$

Working note 6:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,900+(5%×$1,900)−$59.85]=[$1,900+$95−$59.85]=$1,935.15$

Working note 7:

Calculate the amount of cash on dated 19^th January:

$Cash(debit)on dated 19thJanuary}=(Cash sales + 5% on sales tax)=[$2,230+(5%×$2,230)]=[$2,230+$111.5]=$2,341.50$

Use the general journal to record the sales returns and allowances:

General Journal: It is a book where all the monetary transactions are recorded in the form of journal entries on the date of their occurrence in a chronological order.

Transaction on January 11:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	11	Sales Returns and Allowances		401.1	40.00
		Sales Tax Payable		231	2.00
			Accounts Receivable, MA	122/✓		42.00
		(Record merchandise returned)

Table (2)

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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $40×5%= $2$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable = Sales returns+Sales tax payable= $40.00+$2.00= $42.00$

Transaction on January 18:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	21	Sales Returns and Allowances		401.1	31.00
		Sales Tax Payable		231	1.55
			Accounts Receivable, RZ	122/✓		32.55
		(Record merchandise returned)

Table (3)

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, RZ 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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $31×5%= $1.55$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable, A Manufacturing} = Sales returns+Sales tax payable= $31.00+$1.55= $32.55$

2.

To determine

Post the prepared journal to the general ledger, and to the accounts receivable ledger.

2.

Expert Solution

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 prepared journals to the general ledger:

ACCOUNT Cash ACCOUNT NO. 101
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			2,890.75
	31		CR10	15,174.85		18,065.60

Table (4)

ACCOUNT Accounts Receivable ACCOUNT NO. 122
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			6,300.00
	11		J8		42.00	6,258.00
	21		J8		32.55	6,225.45
	31		CR10		3,481.00	2,744.45

Table (5)

ACCOUNT Sales Tax Payable ACCOUNT NO. 231
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	2.00		2.00
	21		J8	1.55		3.55
	31		CR10		561.50		557.95

Table (6)

ACCOUNT Sales ACCOUNT NO. 401
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10		11,230.00		11,230.00

Table (7)

ACCOUNT Sales Returns and Allowances ACCOUNT NO. 401.1
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	40.00		40.00
	21		J8	31.00		71.00

Table (8)

ACCOUNT Bank Credit Card Expense ACCOUNT NO. 513
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10	97.65		97.65

Table (9)

Post the journals to the accounts receivable ledger.

NAME RB
ADDRESS 229 SE 65th Avenue, P, Or 97215-1451
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,400.00
	1		CR10		880.00	520.00
	11		J8		42.00	478.00

Table (10)

NAME D Manufacturing
ADDRESS 447 6th Avenue, F Staff, AZ 86004-6842
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			318.00
	25		CR10		318.00	0

Table (11)

NAME CH
Address 1462 N. S Blvd., Los Cruces, Nm 88012-7791
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--						815
January	1	Balance	✓		271	544
	3		CR10

Table (12)

NAME JS
ADDRESS 5997 Blackgold Lane, G, TX 76051-2366
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,481.00
	20		CR10		912.00	569.00

Table (13)

NAME RZ
ADDRESS 6881 S Drive, San D, CA 92127-8671
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			2,286.00
	15		CR10		1,100.00	1,186.00
	18		J8		32.55	1,153.45

Table (14)

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Answer 3

Question

Chapter 12, Problem 7SPB

1.

To determine

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances.

1.

Expert Solution

Explanation of Solution

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.

The following are the some examples of transactions that would be recorded in the Other Accounts credit column of the cash receipts journal:

• Cash received as interest on notes payable
• Interest revenue received from debtors
• Cash receipts from bank loans
• Cash receipts for capital investments

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances:

College accounting, chapters 1-9, Chapter 12, Problem 7SPB

Table (1)

Verification of total debit and credit column:

$Total Debit = Total Credit($15,174.85+$97.65 ) = ($3,481.00+$11,230.00+$561.50) =$15,272.50 =$15,272.5$

Working note 1:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=(Cash sales + 5% on sales tax)=[$2,800+(5%×$2,800)]=[$2,800+$140]=$2,940$

Working note 2:

Calculate the amount of bank credit card expense on dated 5^th January:

$Bank credit card expense on dated 5thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,200+(5%×$1,200)]×3%=[$1,200+$60]×3%=$37.80$

Working note 3:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,200+(5%×$1,200)−$37.80]=[$1,200+$60−$37.80]=$1,222$

Working note 4:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=(Cash sales + 5% on sales tax)=[$3,100+(5%×$3,100)]=[$3,100+$155]=$3,255$

Working note 5:

Calculate the amount of bank credit card expense on dated 12^th January:

$Bank credit card expense on dated 12thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,900+(5%×$1,900)]×3%=[$1,900+$95]×3%=$59.85$

Working note 6:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,900+(5%×$1,900)−$59.85]=[$1,900+$95−$59.85]=$1,935.15$

Working note 7:

Calculate the amount of cash on dated 19^th January:

$Cash(debit)on dated 19thJanuary}=(Cash sales + 5% on sales tax)=[$2,230+(5%×$2,230)]=[$2,230+$111.5]=$2,341.50$

Use the general journal to record the sales returns and allowances:

General Journal: It is a book where all the monetary transactions are recorded in the form of journal entries on the date of their occurrence in a chronological order.

Transaction on January 11:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	11	Sales Returns and Allowances		401.1	40.00
		Sales Tax Payable		231	2.00
			Accounts Receivable, MA	122/✓		42.00
		(Record merchandise returned)

Table (2)

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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $40×5%= $2$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable = Sales returns+Sales tax payable= $40.00+$2.00= $42.00$

Transaction on January 18:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	21	Sales Returns and Allowances		401.1	31.00
		Sales Tax Payable		231	1.55
			Accounts Receivable, RZ	122/✓		32.55
		(Record merchandise returned)

Table (3)

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, RZ 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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $31×5%= $1.55$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable, A Manufacturing} = Sales returns+Sales tax payable= $31.00+$1.55= $32.55$

2.

To determine

Post the prepared journal to the general ledger, and to the accounts receivable ledger.

2.

Expert Solution

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 prepared journals to the general ledger:

ACCOUNT Cash ACCOUNT NO. 101
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			2,890.75
	31		CR10	15,174.85		18,065.60

Table (4)

ACCOUNT Accounts Receivable ACCOUNT NO. 122
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			6,300.00
	11		J8		42.00	6,258.00
	21		J8		32.55	6,225.45
	31		CR10		3,481.00	2,744.45

Table (5)

ACCOUNT Sales Tax Payable ACCOUNT NO. 231
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	2.00		2.00
	21		J8	1.55		3.55
	31		CR10		561.50		557.95

Table (6)

ACCOUNT Sales ACCOUNT NO. 401
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10		11,230.00		11,230.00

Table (7)

ACCOUNT Sales Returns and Allowances ACCOUNT NO. 401.1
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	40.00		40.00
	21		J8	31.00		71.00

Table (8)

ACCOUNT Bank Credit Card Expense ACCOUNT NO. 513
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10	97.65		97.65

Table (9)

Post the journals to the accounts receivable ledger.

NAME RB
ADDRESS 229 SE 65th Avenue, P, Or 97215-1451
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,400.00
	1		CR10		880.00	520.00
	11		J8		42.00	478.00

Table (10)

NAME D Manufacturing
ADDRESS 447 6th Avenue, F Staff, AZ 86004-6842
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			318.00
	25		CR10		318.00	0

Table (11)

NAME CH
Address 1462 N. S Blvd., Los Cruces, Nm 88012-7791
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--						815
January	1	Balance	✓		271	544
	3		CR10

Table (12)

NAME JS
ADDRESS 5997 Blackgold Lane, G, TX 76051-2366
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,481.00
	20		CR10		912.00	569.00

Table (13)

NAME RZ
ADDRESS 6881 S Drive, San D, CA 92127-8671
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			2,286.00
	15		CR10		1,100.00	1,186.00
	18		J8		32.55	1,153.45

Table (14)

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Answer 4

Question

Chapter 12, Problem 7SPB

1.

To determine

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances.

1.

Expert Solution

Explanation of Solution

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.

The following are the some examples of transactions that would be recorded in the Other Accounts credit column of the cash receipts journal:

• Cash received as interest on notes payable
• Interest revenue received from debtors
• Cash receipts from bank loans
• Cash receipts for capital investments

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances:

College accounting, chapters 1-9, Chapter 12, Problem 7SPB

Table (1)

Verification of total debit and credit column:

$Total Debit = Total Credit($15,174.85+$97.65 ) = ($3,481.00+$11,230.00+$561.50) =$15,272.50 =$15,272.5$

Working note 1:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=(Cash sales + 5% on sales tax)=[$2,800+(5%×$2,800)]=[$2,800+$140]=$2,940$

Working note 2:

Calculate the amount of bank credit card expense on dated 5^th January:

$Bank credit card expense on dated 5thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,200+(5%×$1,200)]×3%=[$1,200+$60]×3%=$37.80$

Working note 3:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,200+(5%×$1,200)−$37.80]=[$1,200+$60−$37.80]=$1,222$

Working note 4:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=(Cash sales + 5% on sales tax)=[$3,100+(5%×$3,100)]=[$3,100+$155]=$3,255$

Working note 5:

Calculate the amount of bank credit card expense on dated 12^th January:

$Bank credit card expense on dated 12thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,900+(5%×$1,900)]×3%=[$1,900+$95]×3%=$59.85$

Working note 6:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,900+(5%×$1,900)−$59.85]=[$1,900+$95−$59.85]=$1,935.15$

Working note 7:

Calculate the amount of cash on dated 19^th January:

$Cash(debit)on dated 19thJanuary}=(Cash sales + 5% on sales tax)=[$2,230+(5%×$2,230)]=[$2,230+$111.5]=$2,341.50$

Use the general journal to record the sales returns and allowances:

General Journal: It is a book where all the monetary transactions are recorded in the form of journal entries on the date of their occurrence in a chronological order.

Transaction on January 11:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	11	Sales Returns and Allowances		401.1	40.00
		Sales Tax Payable		231	2.00
			Accounts Receivable, MA	122/✓		42.00
		(Record merchandise returned)

Table (2)

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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $40×5%= $2$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable = Sales returns+Sales tax payable= $40.00+$2.00= $42.00$

Transaction on January 18:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	21	Sales Returns and Allowances		401.1	31.00
		Sales Tax Payable		231	1.55
			Accounts Receivable, RZ	122/✓		32.55
		(Record merchandise returned)

Table (3)

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, RZ 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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $31×5%= $1.55$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable, A Manufacturing} = Sales returns+Sales tax payable= $31.00+$1.55= $32.55$

2.

To determine

Post the prepared journal to the general ledger, and to the accounts receivable ledger.

2.

Expert Solution

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 prepared journals to the general ledger:

ACCOUNT Cash ACCOUNT NO. 101
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			2,890.75
	31		CR10	15,174.85		18,065.60

Table (4)

ACCOUNT Accounts Receivable ACCOUNT NO. 122
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			6,300.00
	11		J8		42.00	6,258.00
	21		J8		32.55	6,225.45
	31		CR10		3,481.00	2,744.45

Table (5)

ACCOUNT Sales Tax Payable ACCOUNT NO. 231
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	2.00		2.00
	21		J8	1.55		3.55
	31		CR10		561.50		557.95

Table (6)

ACCOUNT Sales ACCOUNT NO. 401
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10		11,230.00		11,230.00

Table (7)

ACCOUNT Sales Returns and Allowances ACCOUNT NO. 401.1
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	40.00		40.00
	21		J8	31.00		71.00

Table (8)

ACCOUNT Bank Credit Card Expense ACCOUNT NO. 513
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10	97.65		97.65

Table (9)

Post the journals to the accounts receivable ledger.

NAME RB
ADDRESS 229 SE 65th Avenue, P, Or 97215-1451
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,400.00
	1		CR10		880.00	520.00
	11		J8		42.00	478.00

Table (10)

NAME D Manufacturing
ADDRESS 447 6th Avenue, F Staff, AZ 86004-6842
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			318.00
	25		CR10		318.00	0

Table (11)

NAME CH
Address 1462 N. S Blvd., Los Cruces, Nm 88012-7791
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--						815
January	1	Balance	✓		271	544
	3		CR10

Table (12)

NAME JS
ADDRESS 5997 Blackgold Lane, G, TX 76051-2366
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,481.00
	20		CR10		912.00	569.00

Table (13)

NAME RZ
ADDRESS 6881 S Drive, San D, CA 92127-8671
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			2,286.00
	15		CR10		1,100.00	1,186.00
	18		J8		32.55	1,153.45

Table (14)

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Answer 5

Chapter 12, Problem 7SPB

1.

To determine

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances.

1.

Expert Solution

Explanation of Solution

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.

The following are the some examples of transactions that would be recorded in the Other Accounts credit column of the cash receipts journal:

• Cash received as interest on notes payable
• Interest revenue received from debtors
• Cash receipts from bank loans
• Cash receipts for capital investments

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances:

College accounting, chapters 1-9, Chapter 12, Problem 7SPB

Table (1)

Verification of total debit and credit column:

$Total Debit = Total Credit($15,174.85+$97.65 ) = ($3,481.00+$11,230.00+$561.50) =$15,272.50 =$15,272.5$

Working note 1:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=(Cash sales + 5% on sales tax)=[$2,800+(5%×$2,800)]=[$2,800+$140]=$2,940$

Working note 2:

Calculate the amount of bank credit card expense on dated 5^th January:

$Bank credit card expense on dated 5thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,200+(5%×$1,200)]×3%=[$1,200+$60]×3%=$37.80$

Working note 3:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,200+(5%×$1,200)−$37.80]=[$1,200+$60−$37.80]=$1,222$

Working note 4:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=(Cash sales + 5% on sales tax)=[$3,100+(5%×$3,100)]=[$3,100+$155]=$3,255$

Working note 5:

Calculate the amount of bank credit card expense on dated 12^th January:

$Bank credit card expense on dated 12thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,900+(5%×$1,900)]×3%=[$1,900+$95]×3%=$59.85$

Working note 6:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,900+(5%×$1,900)−$59.85]=[$1,900+$95−$59.85]=$1,935.15$

Working note 7:

Calculate the amount of cash on dated 19^th January:

$Cash(debit)on dated 19thJanuary}=(Cash sales + 5% on sales tax)=[$2,230+(5%×$2,230)]=[$2,230+$111.5]=$2,341.50$

Use the general journal to record the sales returns and allowances:

General Journal: It is a book where all the monetary transactions are recorded in the form of journal entries on the date of their occurrence in a chronological order.

Transaction on January 11:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	11	Sales Returns and Allowances		401.1	40.00
		Sales Tax Payable		231	2.00
			Accounts Receivable, MA	122/✓		42.00
		(Record merchandise returned)

Table (2)

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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $40×5%= $2$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable = Sales returns+Sales tax payable= $40.00+$2.00= $42.00$

Transaction on January 18:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	21	Sales Returns and Allowances		401.1	31.00
		Sales Tax Payable		231	1.55
			Accounts Receivable, RZ	122/✓		32.55
		(Record merchandise returned)

Table (3)

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, RZ 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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $31×5%= $1.55$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable, A Manufacturing} = Sales returns+Sales tax payable= $31.00+$1.55= $32.55$

2.

To determine

Post the prepared journal to the general ledger, and to the accounts receivable ledger.

2.

Expert Solution

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 prepared journals to the general ledger:

ACCOUNT Cash ACCOUNT NO. 101
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			2,890.75
	31		CR10	15,174.85		18,065.60

Table (4)

ACCOUNT Accounts Receivable ACCOUNT NO. 122
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			6,300.00
	11		J8		42.00	6,258.00
	21		J8		32.55	6,225.45
	31		CR10		3,481.00	2,744.45

Table (5)

ACCOUNT Sales Tax Payable ACCOUNT NO. 231
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	2.00		2.00
	21		J8	1.55		3.55
	31		CR10		561.50		557.95

Table (6)

ACCOUNT Sales ACCOUNT NO. 401
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10		11,230.00		11,230.00

Table (7)

ACCOUNT Sales Returns and Allowances ACCOUNT NO. 401.1
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	40.00		40.00
	21		J8	31.00		71.00

Table (8)

ACCOUNT Bank Credit Card Expense ACCOUNT NO. 513
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10	97.65		97.65

Table (9)

Post the journals to the accounts receivable ledger.

NAME RB
ADDRESS 229 SE 65th Avenue, P, Or 97215-1451
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,400.00
	1		CR10		880.00	520.00
	11		J8		42.00	478.00

Table (10)

NAME D Manufacturing
ADDRESS 447 6th Avenue, F Staff, AZ 86004-6842
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			318.00
	25		CR10		318.00	0

Table (11)

NAME CH
Address 1462 N. S Blvd., Los Cruces, Nm 88012-7791
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--						815
January	1	Balance	✓		271	544
	3		CR10

Table (12)

NAME JS
ADDRESS 5997 Blackgold Lane, G, TX 76051-2366
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,481.00
	20		CR10		912.00	569.00

Table (13)

NAME RZ
ADDRESS 6881 S Drive, San D, CA 92127-8671
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			2,286.00
	15		CR10		1,100.00	1,186.00
	18		J8		32.55	1,153.45

Table (14)

Answer 6

Chapter 12, Problem 7SPB

1.

To determine

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances.

1.

Expert Solution

Explanation of Solution

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.

The following are the some examples of transactions that would be recorded in the Other Accounts credit column of the cash receipts journal:

• Cash received as interest on notes payable
• Interest revenue received from debtors
• Cash receipts from bank loans
• Cash receipts for capital investments

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances:

College accounting, chapters 1-9, Chapter 12, Problem 7SPB

Table (1)

Verification of total debit and credit column:

$Total Debit = Total Credit($15,174.85+$97.65 ) = ($3,481.00+$11,230.00+$561.50) =$15,272.50 =$15,272.5$

Working note 1:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=(Cash sales + 5% on sales tax)=[$2,800+(5%×$2,800)]=[$2,800+$140]=$2,940$

Working note 2:

Calculate the amount of bank credit card expense on dated 5^th January:

$Bank credit card expense on dated 5thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,200+(5%×$1,200)]×3%=[$1,200+$60]×3%=$37.80$

Working note 3:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,200+(5%×$1,200)−$37.80]=[$1,200+$60−$37.80]=$1,222$

Working note 4:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=(Cash sales + 5% on sales tax)=[$3,100+(5%×$3,100)]=[$3,100+$155]=$3,255$

Working note 5:

Calculate the amount of bank credit card expense on dated 12^th January:

$Bank credit card expense on dated 12thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,900+(5%×$1,900)]×3%=[$1,900+$95]×3%=$59.85$

Working note 6:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,900+(5%×$1,900)−$59.85]=[$1,900+$95−$59.85]=$1,935.15$

Working note 7:

Calculate the amount of cash on dated 19^th January:

$Cash(debit)on dated 19thJanuary}=(Cash sales + 5% on sales tax)=[$2,230+(5%×$2,230)]=[$2,230+$111.5]=$2,341.50$

Use the general journal to record the sales returns and allowances:

General Journal: It is a book where all the monetary transactions are recorded in the form of journal entries on the date of their occurrence in a chronological order.

Transaction on January 11:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	11	Sales Returns and Allowances		401.1	40.00
		Sales Tax Payable		231	2.00
			Accounts Receivable, MA	122/✓		42.00
		(Record merchandise returned)

Table (2)

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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $40×5%= $2$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable = Sales returns+Sales tax payable= $40.00+$2.00= $42.00$

Transaction on January 18:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	21	Sales Returns and Allowances		401.1	31.00
		Sales Tax Payable		231	1.55
			Accounts Receivable, RZ	122/✓		32.55
		(Record merchandise returned)

Table (3)

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, RZ 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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $31×5%= $1.55$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable, A Manufacturing} = Sales returns+Sales tax payable= $31.00+$1.55= $32.55$

Answer 7

Chapter 12, Problem 7SPB

1.

To determine

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances.

Answer 8

1.

Expert Solution

Explanation of Solution

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.

The following are the some examples of transactions that would be recorded in the Other Accounts credit column of the cash receipts journal:

• Cash received as interest on notes payable
• Interest revenue received from debtors
• Cash receipts from bank loans
• Cash receipts for capital investments

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column and use the general journal to record the sales returns and allowances:

College accounting, chapters 1-9, Chapter 12, Problem 7SPB

Table (1)

Verification of total debit and credit column:

$Total Debit = Total Credit($15,174.85+$97.65 ) = ($3,481.00+$11,230.00+$561.50) =$15,272.50 =$15,272.5$

Working note 1:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=(Cash sales + 5% on sales tax)=[$2,800+(5%×$2,800)]=[$2,800+$140]=$2,940$

Working note 2:

Calculate the amount of bank credit card expense on dated 5^th January:

$Bank credit card expense on dated 5thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,200+(5%×$1,200)]×3%=[$1,200+$60]×3%=$37.80$

Working note 3:

Calculate the amount of cash on dated 5^th January:

$Cash(debit)on dated 5thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,200+(5%×$1,200)−$37.80]=[$1,200+$60−$37.80]=$1,222$

Working note 4:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=(Cash sales + 5% on sales tax)=[$3,100+(5%×$3,100)]=[$3,100+$155]=$3,255$

Working note 5:

Calculate the amount of bank credit card expense on dated 12^th January:

$Bank credit card expense on dated 12thJanuary}=[(Sales + 5% on sales tax)×Credit card fee %]=[$1,900+(5%×$1,900)]×3%=[$1,900+$95]×3%=$59.85$

Working note 6:

Calculate the amount of cash on dated 12^th January:

$Cash(debit)on dated 12thJanuary}=[(Cash sales + 5% on sales tax)−Bank credit card expense]=[$1,900+(5%×$1,900)−$59.85]=[$1,900+$95−$59.85]=$1,935.15$

Working note 7:

Calculate the amount of cash on dated 19^th January:

$Cash(debit)on dated 19thJanuary}=(Cash sales + 5% on sales tax)=[$2,230+(5%×$2,230)]=[$2,230+$111.5]=$2,341.50$

Use the general journal to record the sales returns and allowances:

General Journal: It is a book where all the monetary transactions are recorded in the form of journal entries on the date of their occurrence in a chronological order.

Transaction on January 11:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	11	Sales Returns and Allowances		401.1	40.00
		Sales Tax Payable		231	2.00
			Accounts Receivable, MA	122/✓		42.00
		(Record merchandise returned)

Table (2)

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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $40×5%= $2$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable = Sales returns+Sales tax payable= $40.00+$2.00= $42.00$

Transaction on January 18:

General Journal
Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
20--
January	21	Sales Returns and Allowances		401.1	31.00
		Sales Tax Payable		231	1.55
			Accounts Receivable, RZ	122/✓		32.55
		(Record merchandise returned)

Table (3)

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, RZ 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 1:

Compute the sales tax payable amount.

$Sales tax payable = Sales returns×Sales tax percentage= $31×5%= $1.55$

Working note 2:

Compute the accounts receivable amount.

$Accounts receivable, A Manufacturing} = Sales returns+Sales tax payable= $31.00+$1.55= $32.55$

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

2.

To determine

Post the prepared journal to the general ledger, and to the accounts receivable ledger.

2.

Expert Solution

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 prepared journals to the general ledger:

ACCOUNT Cash ACCOUNT NO. 101
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			2,890.75
	31		CR10	15,174.85		18,065.60

Table (4)

ACCOUNT Accounts Receivable ACCOUNT NO. 122
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			6,300.00
	11		J8		42.00	6,258.00
	21		J8		32.55	6,225.45
	31		CR10		3,481.00	2,744.45

Table (5)

ACCOUNT Sales Tax Payable ACCOUNT NO. 231
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	2.00		2.00
	21		J8	1.55		3.55
	31		CR10		561.50		557.95

Table (6)

ACCOUNT Sales ACCOUNT NO. 401
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10		11,230.00		11,230.00

Table (7)

ACCOUNT Sales Returns and Allowances ACCOUNT NO. 401.1
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	40.00		40.00
	21		J8	31.00		71.00

Table (8)

ACCOUNT Bank Credit Card Expense ACCOUNT NO. 513
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10	97.65		97.65

Table (9)

Post the journals to the accounts receivable ledger.

NAME RB
ADDRESS 229 SE 65th Avenue, P, Or 97215-1451
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,400.00
	1		CR10		880.00	520.00
	11		J8		42.00	478.00

Table (10)

NAME D Manufacturing
ADDRESS 447 6th Avenue, F Staff, AZ 86004-6842
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			318.00
	25		CR10		318.00	0

Table (11)

NAME CH
Address 1462 N. S Blvd., Los Cruces, Nm 88012-7791
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--						815
January	1	Balance	✓		271	544
	3		CR10

Table (12)

NAME JS
ADDRESS 5997 Blackgold Lane, G, TX 76051-2366
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,481.00
	20		CR10		912.00	569.00

Table (13)

NAME RZ
ADDRESS 6881 S Drive, San D, CA 92127-8671
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			2,286.00
	15		CR10		1,100.00	1,186.00
	18		J8		32.55	1,153.45

Table (14)

Answer 13

2.

To determine

Post the prepared journal to the general ledger, and to the accounts receivable ledger.

Answer 14

2.

Expert Solution

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 prepared journals to the general ledger:

ACCOUNT Cash ACCOUNT NO. 101
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			2,890.75
	31		CR10	15,174.85		18,065.60

Table (4)

ACCOUNT Accounts Receivable ACCOUNT NO. 122
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	1	Balance	✓			6,300.00
	11		J8		42.00	6,258.00
	21		J8		32.55	6,225.45
	31		CR10		3,481.00	2,744.45

Table (5)

ACCOUNT Sales Tax Payable ACCOUNT NO. 231
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	2.00		2.00
	21		J8	1.55		3.55
	31		CR10		561.50		557.95

Table (6)

ACCOUNT Sales ACCOUNT NO. 401
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10		11,230.00		11,230.00

Table (7)

ACCOUNT Sales Returns and Allowances ACCOUNT NO. 401.1
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Debit ($)	Credit ($)
20--
January	11		J8	40.00		40.00
	21		J8	31.00		71.00

Table (8)

ACCOUNT Bank Credit Card Expense ACCOUNT NO. 513
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
20--
January	31		CR10	97.65		97.65

Table (9)

Post the journals to the accounts receivable ledger.

NAME RB
ADDRESS 229 SE 65th Avenue, P, Or 97215-1451
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,400.00
	1		CR10		880.00	520.00
	11		J8		42.00	478.00

Table (10)

NAME D Manufacturing
ADDRESS 447 6th Avenue, F Staff, AZ 86004-6842
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			318.00
	25		CR10		318.00	0

Table (11)

NAME CH
Address 1462 N. S Blvd., Los Cruces, Nm 88012-7791
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--						815
January	1	Balance	✓		271	544
	3		CR10

Table (12)

NAME JS
ADDRESS 5997 Blackgold Lane, G, TX 76051-2366
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			1,481.00
	20		CR10		912.00	569.00

Table (13)

NAME RZ
ADDRESS 6881 S Drive, San D, CA 92127-8671
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance ($)
20--
January	1	Balance	✓			2,286.00
	15		CR10		1,100.00	1,186.00
	18		J8		32.55	1,153.45