Chapter 9, Problem 1PB

1.

To determine

Prepare journal entry to record the given transaction.

Explanation of Solution

Merchandise Inventory:

Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a trader, to be sold within a year. Merchandise Inventory is a current asset account which includes all the costs incurred to acquire merchandise, and process it further for sale.

Date	Account Titles and explanation	Post.Ref	Debit ($)	Credit ($)
March 4	Accounts receivable	113	47.25
	Sales	411		45.00
	Sales tax payable	214		2.25
	(To record the sale of merchandise to Company D,  sales slip no.236)
March 7	Accounts receivable	113	64.05
	Sales	411		61.00
	Sales tax payable	214		3.05
	(To record the sale of merchandise to Company C, sales slip no.272)
March 12	Accounts receivable	113	66.15
	Sales	411		63.00
	Sales tax payable	214		3.15
	(To record the sale of merchandise to Company A, sales slip no.294)
March 17	Accounts receivable	113	178.50
	Sales	411		170.00
	Sales tax payable	214		8.50
	(To record the sale of merchandise to Company T, sales slip no.299)
March 20	Sales returns and allowances	412	36.00
	Sales tax payable	214	1.80
	Accounts receivable	113		37.80
	(To record the issuance of credit memo no.27)
March 21	Accounts receivable	113	247.80
	Sales	411		236.00
	Sales tax payable	214		11.80
	(To record the sale of merchandise to Company P, sales slip no.310)
March 22	Sales returns and allowances	412	25.00
	Sales tax payable	214	1.25
	Accounts receivable	113		26.25
	(To record the issuance of credit memo no.28)
March 27	Accounts receivable	113	31.50
	Sales	411		30.00
	Sales tax payable	214		1.50
	(To record the sale of merchandise to Company B, sales slip no.332)

Table (1)

2.

To determine

Post the transaction to the general ledger.

Explanation of Solution

Accounts Receivable                    Account  No: 113
Date		Item	Post ref.	Debit	Credit	Balance
						Debit	Credit
March	1	Balance				111.22
	4			28.35		139.57
	6			56.70		196.27
	12			16.80		213.07
	16			109.20		322.27
	18			273.00		595.27
	21				31.50	563.77
	23			189.00		752.77
	24				26.25	726.52

Table (2)

Sales tax payable                 Account  No: 214
Date		Item	Post ref.	Debit	Credit	Balance
						Debit	Credit
March	1	Balance					72.84
	4				1.35		74.19
	6				2.70		76.89
	12				0.80		77.69
	16				5.20		82.89
	18				13.00		95.89
	21			1.50			94.39
	23				9.00		103.39
	24			1.25			102.14

Table (3)

Sales                                           Account  No: 411
Date		Item	Post ref.	Debit	Credit	Balance
						Debit	Credit
March	4				27.00		27.00
	6				54.00		81.00
	12				16.00		97.00
	16				104.00		201.00
	18				260.00		461.00
	23				180.00		641.00

Table (4)

Sales returns and allowance               Account  No: 412
Date		Item	Post ref.	Debit	Credit	Balance
						Debit	Credit
March	21			30.00		30.00
	24			25.00		55.00

Table (5)

Accounts receivable ledger
Name : Company A
Date		Item	Post Ref.	Debit	Credit	Balance
March	1	Balance				34.22
	16			66.15		100.37

Table (6)

Accounts receivable ledger
Name : Company B
Date		Item	Post Ref.	Debit	Credit	Balance
March	27			31.50		31.50

Table (7)

Accounts receivable ledger
Name : Company D
Date		Item	Post Ref.	Debit	Credit	Balance
March	4			47.25		47.25

Table (8)

Accounts receivable ledger
Name : Company M
Date		Item	Post Ref.	Debit	Credit	Balance
March	1	Balance				19.50
	7			64.05		83.55

Table (9)

Accounts receivable ledger
Name : Company P
Date		Item	Post Ref.	Debit	Credit	Balance
March	1	Balance				57.50
	21			247.80		305.30
	22				26.25	279.05

Table (10)

Accounts receivable ledger
Name : Company T
Date		Item	Post Ref.	Debit	Credit	Balance
March	17	Balance		178.50		178.50
	20				37.80	140.70

Table (11)

3.

To determine

Prepare Company A’s schedule of accounts receivable and compare the total with accounts receivable controlling ledger.

Explanation of Solution

Prepare Company A’s schedule of accounts receivable:

Company A
Schedule of accounts receivable
March 31,20--
Particulars	Amount  in $
Company A	100.37
Company B	31.50
Company D	47.25
Company M	83.55
Company P	279.05
Company T	140.70
Total accounts receivable	682.42

(Table 12)