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PR
Cash Cr.
Inventory Cr. Other Accounts Dr. Accounts Payable Dr.
General Journal
7-62
133. Williams Company began business on May 1. They use the perpetual inventory method.
The following transactions involving purchases and cash disbursements occurred during the
first week of May.
May 2 Purchased $25,000 of merchandise inventory on credit from the Sioux City Company,
terms 2/10, n/30. Invoice dated May 1.
May 3 Purchased $12,000 of merchandise inventory on credit from the Wichita Company, terms
2/10, n/30. Invoice dated May 2.
May 3 Purchased $3,000 of office supplies for cash from Bettendorf Co. Check no. 1267.
May 4 Purchased $36,000 of office equipment on credit from Office Outfitters, terms n/60. Invoice
dated May 3.
May 6 Paid the amount due for the merchandise purchased from Sioux City Company. Check no.
1268.
May 6 Purchased $14,500 of merchandise inventory for cash from the Davenport Co. Check no.
1269.
a. Use the purchases journal and the cash disbursements journal to record these transactions.
b. Prepare a schedule of accounts payable. There was no accounts payable on May 1.
Purchases Journal
Date Account Date of
Invoice Terms PR Accounts
Payable
Cr. Inventory
Dr. Office
Supplies
Dr. Other
Accounts
Dr.
Cash Disbursements Journal
Date Ck. No. Payee Account Debited PR Cash Cr. Inventory
Cr. Other
Accounts
Dr. Accounts
Payable
Dr.
7-64
134. The Sun Company completed the following sales and cash receipts transactions during
the first week of December. The Sun Company uses the perpetual inventory system.
Dec 1 Sold merchandise for $6,700 on credit to the Two Rivers Co., terms 2/10, n/30.
Invoice no. 1455. Cost of the merchandise sold is $3,600.
Dec 1 Sold merchandise for $3,400 on credit to the Berlin Co., terms 2/10, n/30. Invoice
no. 1456. Cost of the merchandise sold is $1,800.
Dec 2 Sold merchandise for $590 for cash to the Ellison Co. Invoice no. 1457. Cost of the
merchandise sold is $300.
Dec 3 Borrowed $10,000 from Custer Bank on a long-term note payable.
Dec 3 Sold merchandise for $7,200 on credit to the Amherst Co., terms 2/10, n/30.
Invoice no. 1458. Cost of the merchandise sold is $4,000.
Dec 5 Received the amount due from the Two Rivers Co. from the sale on December 1.
Dec 6 Sold merchandise on credit for $950 to the Waupaca Co., terms 2/10, n/30. Invoice
No. 1459. Cost of the merchandise is $500.
Dec 6 Received the amount due from the Berlin Co. from the sale on December 1.
a. Use the sales journal and the cash receipts journal to record these transactions.
b. Prepare a schedule of accounts receivable. There was no accounts receivable balance at
December 1.
Sales Journal
Date Account Debited Invoice
Number PR Accounts Receivable Dr.
Sales Cr. Cost of Goods Sold Dr.
Inventory Cr.
Cash Receipts Journal
Date Account Credited Explanation PR Cash Dr. Sales
Discount
Dr. Accounts
Receivable
Cr. Sales Cr. Other
Accounts
Cr. Cost of
Goods Sold Dr.
Inventory Cr.
7-66
135. Outdoors Unlimited uses special journals to record its daily transactions. They use the
perpetual inventory system. Shown below is its cash receipts journal and selected ledger
accounts. Post the cash receipts journal to the appropriate ledger accounts.
Date Account
Credited Explanation PR Cash
Debit Sales
Disc
Debit Accts.
Rec.
Credit Sales
Credit Other
Accts.
Credit COGS Dr.
Inv. Cr.
July 4 Able Co. Invoice 303 3,200 34 3,234
2,000
7 Sales Cash sales 700 700 450
9 Bell Co. Invoice 304 950 950
10 Notes Pay Bank loan 5,400 5,400
20 Notes Rec. Delta Co. 2,200
20 Int. Revenue 2,310
110
12,560 34 4,184 700 7,710
2,450
General Ledger
Cash No. 101
Notes Payable No.
250
Date PR Debit Credit Balance Date PR Debit Credit Balance
7/1 4,500
Accounts Receivable No. 106
Sales No. 403
Date PR Debit Credit Balance Date PR Debit Credit Balance
7/1 6,700 7/1 30,000
Inventory No. 109
Sales Discounts No. 405
Date PR Debit Credit Balance Date PR Debit Credit Balance
7/1 15,000 7/1 400
Notes Receivable No. 115
Interest Revenue No. 415
Date PR Debit Credit Balance Date PR Debit Credit Balance
7/1 2,200
Accounts Payable No. 201
Cost of Goods Sold No. 502
Date PR Debit Credit Balance Date PR Debit Credit Balance
7/1 3,450 7/1 18,000
Accounts Receivable Subsidiary Leger
Able Co. Bell Co.
Date PR Debit Credit Balance Date PR Debit Credit Balance
7/1 4,750 7/1 1,950
7-69
136. The Woodview Company uses a sales journal, purchases journal, cash receipts journal,
cash disbursements journal, and general journal. They use the periodic inventory method. The
following transactions occurred during the month of December:
Dec. 4 Sold merchandise on credit for $3,300 to the A&B Co., Invoice No. 313.
8 Purchased merchandise on credit for $1,800 from the Dexter Co., terms 2/10, n/30.
Invoice dated December 8.
10 Sold merchandise for $500 cash to RAC Corp., Invoice 314.
13 Collected $3,300 from the A&B Co. for merchandise sold on December 4.
17 Paid amount owed to Dexter Co. from December 8 purchase, Check No. 1011.
24 Sold merchandise on credit for $4,500 to Dunn Corp., Invoice No. 315.
27 Paid $400 cash for monthly rent to Dayton Properties, Check No. 1012.
31 Purchased equipment for $3,055 from Fort Corp., Check No. 1013.
Record these transactions using the journals below.
Sales Journal Page 15
Date Account Debited Invoice Number
PR Accounts Receivable Dr.
Sales Cr.
Purchases Journal Page 20
Date
Account
Date of Invoice
Terms
PR Accounts Payable Cr.
Inventory Dr. Office Supplies Dr. Other Accounts Dr.
Cash Receipts Journal Page 17
Date
Account Credited
Explanation
PR
Cash Dr. Sales Discount Cr. Accounts Receivable Cr.
Sales Cr. Other Accounts Dr. Cost of Goods Sold Dr.
Inventory Cr.
Cash Disbursements Journal Page 22
Date
Ck. No.
Payee
Account Debited
PR
Cash Cr.
Inventory Cr. Other Accounts Dr. Accounts Payable Dr.
7-72
137. Williams Company began business on May 1. They use the periodic inventory method.
The following transactions involving purchases and cash disbursements occurred during the
first week of May.
May 2 Purchased $25,000 of merchandise inventory on credit from the Sioux City
Company, terms 2/10, n/30. Invoice dated May 1.
May 3 Purchased $12,000 of merchandise inventory on credit from the Wichita
Company, terms 2/10, n/30. Invoice dated May 2.
May 3 Purchased $3,000 of office supplies for cash from Bettendorf Co. Check no.
1267. May
May 4 Purchased $36,000 of office equipment on credit from Office Outfitters, terms
n/60. Invoice dated May 3.
May 6 Paid the amount due for the merchandise purchased from Sioux City Company.
Check no. 1268.
May 6 Purchased $14,500 of merchandise inventory for cash from the Davenport Co.
Check no. 1269.
a. Use the purchases journal and the cash disbursements journal to record these transactions.
b. Prepare a schedule of accounts payable. There was no accounts payable balance on May 1.
Purchases Journal Page 20
Date Account Date of
Invoice Terms PR Accounts
Payable
Cr.
Cr. Purchases
Dr. Office
Supplies
Dr. Other
Accounts
Dr.
Cash Disbursements Journal Page 22
Date Ck.
No. Payee Account Debited PR Cash Cr. Purchases
Discount
Cr. Other Accounts
Dr. Accounts
Payable
Dr.
7-74
138. The Sun Company completed the following sales and cash receipts transactions during
the first week of December. The Sun Company uses the periodic inventory system.
Dec 1 Sold merchandise for $6,700 on credit to the Two Rivers Co., terms 2/10, n/30.
Invoice no. 1455. Cost of the merchandise sold is $3,600.
Dec 1 Sold merchandise for $3,400 on credit to the Berlin Co., terms 2/10, n/30.
Invoice no. 1456. Cost of the merchandise sold is $1,800.
Dec 2 Sold merchandise for $590 for cash to the Ellison Co. Invoice no. 1457.
Cost of the merchandise sold is $300.
Dec 3 Borrowed $10,000 from Custer Bank on a long-term note payable.
Dec 3 Sold merchandise for $7,200 on credit to the Amherst Co., terms 2/10, n/30.
Invoice no. 1458. Cost of the merchandise sold is $4,000.
Dec 5 Received the amount due from the Two Rivers Co. from the sale on December 1.
Dec 6 Sold merchandise on credit for $950 to the Waupaca Co., terms 2/10, n/30.
Invoice No. 1459.
Dec 6 Received the amount due from the Berlin Co. from the sale on December 1.
a. Use the sales journal and the cash receipts journal to record these transactions.
b. Prepare a schedule of accounts receivable. There was no accounts receivable balance at
December 1.
Sales Journal
Date
Account Debited Invoice Number
PR Accounts Receivable Dr. Sales Cr.
Cash Receipts Journal
Date
Account Credited
Explanation
PR
Cash Dr. Sales Discount Dr. Accounts Receivable Cr.
Sales Cr. Other Accounts Cr.
139. The following information is available for AllBev, Inc. (all amounts are in millions):
America Europe Asia
Segment sales…………………… $6,300 $5,200 $3,800
Segment operating income…….. 2,120 2,240 1,200
Segment average assets……….. 3,800 4,200 2,800
a. Determine the segment return on assets for each geographic segment.
b. Comment on the results. How do the segments compare with respect to profitability?
c. What measures could be taken to improve segment return?
