
Concept explainers
Requirement-1:
The Preparation of sales Journal.
Requirement-1:

Answer to Problem 1CP
Solution: The sales Journal has been prepared on 15 half monthly basis as under:
SALES JOURNAL | ||||||
Date | Account | Invoice | PR | COGS Dr. | ||
| Debited | Number | | Sales Cr. | Inventory Cr. | |
2-May | Hensel Company | 8785 | | 6100 | 4100 | |
TOTAL | | | | 6100 | 4100 | |
16-May | Hensel Company | 8786 | | 3990 | 1890 | |
22-May | Lee Services | 8787 | | 6850 | 4990 | |
26-May | Crane Corp. | 8788 | | 14210 | 8230 | |
TOTAL | | | | 25050 | 15110 |
Explanation of Solution
Requirement2:
The Preparation of Cash receipts journal.
Requirement2:

Answer to Problem 1CP
Solution: The Cash receipts journal shall also be made half monthly basis as under:
CASH RECEIPTS JOURNAL | ||||||||||
Date | Accounts | Explanation | PR | Cash Dr. | Sales | Account | Sales Cr. | Store | COGS Dr. | |
| Credited | | | | Discount Dr. | Rec. Cr. | | Supplies Cr. | Inventory Cr. | |
5-May | Knox Co. | Receipts | | 4459 | 91 | 4550 | | | | |
9-May | Store Supplies | Sale of supplies | | 350 | | | | 350 | | |
2-May | Hensel Co. | Receipts | | 5978 | 122 | 6100 | | | | |
15-May | Sales | cash sales | | 59220 | | | 59220 | | 38200 | |
TOTAL | | | | 70007 | 213 | 10650 | 59220 | 350 | 38200 | |
30-May | Lee Service | Receipts | | 6713 | 137 | 6850 | | | | |
30-May | Sales | Cash sales | | 66052 | | | 66052 | | 42500 | |
TOTAL | | | | 72765 | 137 | 6850 | 66052 | | 42500 |
Explanation of Solution
At the end of period these entries are total posted to General journal by debited cash account.
Requirement3:
The preparation of Purchase Journal.
Requirement3:

Answer to Problem 1CP
Solution: The Purchase journal has been made as under:
PURCHASE JOURNAL | ||||||||||
Date | Account | Invoice | Terms | PR | Accounts | Inventory | Office | Store | Equipment | |
| Credited | Date | | | Payable Cr. | Debited | Supplies Dr. | Supplies Dr. | Debited | |
4-May | Gear Supply Co. | 4-May | n/10 EOM | | 37729 | 37072 | 83 | 574 | | |
10-May | Gear Supply Co. | 10-May | n/10 EOM | | 4074 | | | | 4074 | |
11-May | Garcia Inc. | 10-May | 2/10, n/30 | | 8800 | 8800 | | | | |
TOTAL | | | | | 50603 | 45872 | 83 | 574 | 4074 | |
17-May | Fink Corp. | 14-May | 2/10, n/60 | | 13650 | 13650 | | | | |
24-May | Gear Supply Co. | 24-May | n/10 EOM | | 9030 | 8120 | 280 | 630 | | |
25-May | Peyton Products | 23-May | 2/10 n/30 | | 3080 | 3080 | | | | |
TOTAL | | | | | 25760 | 24850 | 280 | 630 | |
Explanation of Solution
Requirement4.
The Cash disbursal Journal to be prepared.
Requirement4.

Answer to Problem 1CP
Solution: The Cash disbursal Journal has been prepared as under:
CASH DISBURSEMENT JOURNAL | ||||||||||
Date | Check | Payee | Account | PR | Cash Cr. | Inventory | Other | Other | ||
| | | Debited | | | Cr. | Accounts Dr. | Payable Dr. | ||
1-May | 3410 | S & P Mgt. | Rent Expense | | 3710 | | 3710 | | ||
8-May | 3411 | Peyton Products | Peyton Products | | 6174 | 126 | | 6300 | ||
15-May | 3412 | Salaries | Salaries expense | | 8470 | | 8470 | | ||
TOTAL | | | | | 18354 | 126 | 12180 | 6300 | ||
19-May | 3413 | Garcia | Garcia | | 8624 | 176 | | 8800 | ||
23-May | 3414 | Fink Corp. | Fink Corp. | | 13377 | 273 | | 13650 | ||
26-May | 3415 | Perennial Power | Utility Expense | | 1283 | | 1283 | | ||
29-May | 3416 | Jenny Colo. | Withdrawals | | 7000 | | 7000 | | ||
30-May | 3417 | Salaries | Salaries expense | | 8470 | | 8470 | | ||
TOTAL | | | | | 38754 | 449 | 16753 | 22450 |
Explanation of Solution
Requirement5:
The General Journal has been prepared.
Requirement5:

Answer to Problem 1CP
Solution: The General Journal has been made:
General Journal | |||||||
Date | Accounts title and explanations | Debit $ | Credit $ | ||||
2-May | Sales return and allowance Dr. | 175 | |||||
Accounts receivable Account | 175 | ||||||
3-May | Accounts payable Dr. | 798 | |||||
Merchandise inventory | 798 | ||||||
12-May | Accounts payable Account Dr. | 854 | |||||
Office Equipment Account | 854 | ||||||
15-May | Accounts receivable Dr. | 6100 | |||||
Sales revenue Account | 6100 | ||||||
15-May | Cost of Goods sold Account Dr. | 4100 | |||||
Inventory Account | 4100 | ||||||
15-May | Cash account Dr. | 70007 | |||||
Sales discount Dr. | 213 | ||||||
Accounts receivable Account | 10650 | ||||||
Sales revenue account | 59220 | ||||||
Store supplies Account | 350 | ||||||
15-May | Cost f Goods sold Account Dr. | 38200 | |||||
Inventory Account | 38200 | ||||||
15-May | Inventory Account Dr. | 45872 | |||||
Office Supplies Account Dr. | 83 | ||||||
Store Supplies Account Dr. | 574 | ||||||
Office Equipment Account Dr. | 4074 | ||||||
Accounts payable | 50603 | ||||||
15-May | Office rent Account Dr. | 2968 | |||||
Store rent Expense Account Dr. | 742 | ||||||
Sales salaries expense Account Dr. | 5320 | ||||||
Office Salaries Expense Account Dr. | 3150 | ||||||
Cash | 12180 | ||||||
15-May | Accounts payable Dr. | 6300 | |||||
Cash account | 6174 | ||||||
Inventory account | 126 | ||||||
31-May | Accounts receivable Dr. | 25050 | |||||
Sales revenue | 25050 | ||||||
31-May | Cost of Goods sold Dr. | 15110 | |||||
Inventory Account | 15110 | ||||||
31-May | Cash account Dr. | 6713 | |||||
Sales discount Dr. | 137 | ||||||
Accounts receivable | 6850 | ||||||
31-May | Cash account Dr. | 66052 | |||||
Sales revenue Account | 66052 | ||||||
31-May | Cost of Goods sold Account Dr. | 42500 | |||||
Inventory Account | 42500 | ||||||
31-May | Inventory Account Dr. | 24850 | |||||
Office Supplies Account Dr. | 280 | ||||||
Store supplies account Dr. | 630 | ||||||
Accounts payable | 25760 | ||||||
31-May | Accounts payable Dr. | 22450 | |||||
Cash account | 22001 | ||||||
Inventory Account | 449 | ||||||
31-May | Utilities expense Account Dr. | 1283 | |||||
Office salaries account Dr. | 3150 | ||||||
Sales salaries expense Account Dr. | 5320 | ||||||
Withdrawals Account Dr. | 7000 | ||||||
Cash | 16753 | ||||||
Explanation of Solution
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