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Feb. 14 Issued Check No. 415, payable to Payroll, in payment of sales
salaries for the first half of the month, $855. Cashed the check
and paid the employees.
14 Cash sales for the first half of the month, $18,460. Cost of this
merchandise was $ 9,500. (Normally, cash sales are recorded
daily; they are recorded only twice in this problem to reduce
the number of repetitive entries.)
14 Post to the customer and creditor accounts and also post any
amounts that should be posted as individual amounts to the
general ledger accounts. (Normally, such items are posted
daily; but you are asked to post them only twice in this
problem.)
16 Purchased inventory on credit from Best Company, $410;
store supplies, $45; and office supplies, $30. Invoice dated
February 12, terms n/10, EOM.
17 Received a credit memorandum from Old Company for
unsatisfactory inventory received on February 14 and returned
for credit, $85.
18 Received a credit memorandum from More Company for office
equipment received on February 9 and returned for credit,
$130.
21 Received payment from Carl Cole for the sale of February 11
less the discount.
21 Issued Check No. 416 to Old Company in payment of its
invoice of February 11 less the return and the discount.
24 Sold inventory costing $475 on credit to Carl Cole for $835,
Invoice No. 714.
26 Sold inventory costing $375 on credit to Gary Glen for $775,
Invoice No. 715.
28 Issued Check No. 417, payable to Payroll, in payment of sales
salaries for the last half of the month, $855. Cashed the check
and paid the employees.
28 Cash sales for the last half of the month, $20,215. Cost of this
merchandise was $ 11,500.
Feb 28 Post to the customer and creditor accounts and post any
amounts that should be posted as individual amounts to
general ledger accounts.
28 Foot and crossfoot the journals and make the month-end
postings.
Required:
1. Open the following general ledger accounts: Cash, Accounts
Receivable, Inventory, Store Supplies, Office Supplies, Office
Equipment, Notes Payable, Accounts Payable, F. Stone, Capital,
Sales, Sales Discounts, Cost of Goods Sold, and Sales Salaries
Expense.
2. Open the following accounts receivable ledger accounts: Carl Cole,
Dale Dent, and Gary Glen.
3. Open the following accounts payable ledger accounts: Able
Company, Best Company, More Company, and Old Company.
4. Enter the transactions in a Sales Journal, a Purchases Journal, a
Cash Receipts Journal, a Cash Disbursements Journal, and a General
Journal similar to the ones illustrated in this chapter. Post when
instructed to do so.
5. Prepare a trial balance and prove the subsidiary ledgers by preparing
schedules of accounts receivable and payable.
E-10
Solution: Alternate Demonstration Problem
Appendix E
SALES JOURNAL
Date Account Debited
Invoice
Number PR
Accts Rec Dr
Sales Cr
Cost of Goods Sold Debit
Inventory Credit
Feb. 2 Dale Dent 711 800.00 500.00
4 Gary Glen 712 1,250.00 850.00
11 Carl Cole 713 1,650.00 1,000.00
24 Carl Cole 714 835.00 475.00
PURCHASES JOURNAL
Date Amount Credited
Date of
Invoice Terms
P
R
Accounts
Payable
Credit
Inventory
Debit
Store
Supplies
Debit
Office
Supplies
Debit
Feb. 3 Able Company 1/30 2/10, n/60 1,750.00 1,750.00 . . . . . . . . . .
5 Best Company 2/4 n/10, EOM 1,965.00 1,855.00 75.00 35.00
(212) (113) (115) (116)
E-11
CASH RECEIPTS JOURNAL
Date
Account
Credited Explanation PR
Cash
Debit
Sales
Disc.
Debit
Accts.
Rec.
Credit
Sales
Credit
Other
Accts.
Credit
Cost of
Goods Sold
Debit
Inventory
Credit
Feb.1 F.Stone,
Capital
Investment 311 100,000.00 ................ ................ ................ 100,000.00 ................
7 Notes
Payable
Note to bank 211 5,000.00 ................ ................ ................ 5,000.00 ................
12 Dale Dent Sale of 2/2 784.00 16.00 800.00 ................ ................ ................
CASH DISBURSEMENTS JOURNAL
Date
Ch.
No. Payee Account Debited PR
Cash
Credit
Inventory
Credit
Accts.
Pay
Debit
Other
Accts.
Debit
Feb.1 413 Flint Company Inventory 113 75,000.00 ................ ................ 75,000.00
9 414 Able Company Invoice of 1/30 1,715.00 35.00 1,750.00 ................
14 415 Payroll Sales Salaries Exp. 612 855.00 ................ ................ 855.00
E-13
GENERAL JOURNAL
Feb 9 Office Equipment 133 625.00
Accounts Payable/ More Company 212/625.00
17 Accounts Payable/ Old Company 212/85.00
Inventory 113 85.00
GENERAL LEDGER
Cash Acct. No. 111
Date Explanation PR Debit Credit Balance
Accounts Receivable Acct. No. 112
Date Explanation PR Debit Credit Balance
Feb. 28
28
S2
R2
5,310
3,700
5,310
1,610
Inventory Acct. No. 113
Date Explanation PR Debit Credit Balance
Feb. 2
17
28
D2
G2
P2
75,000
6,000
85
75,000
74,915
80,915
Store Supplies Acct. No. 115
Date Explanation PR Debit Credit Balance
Feb. 28 P2 120 120
Office Supplies Acct. No. 116
Date Explanation PR Debit Credit Balance
Office Equipment Acct. No. 133
Date Explanation PR Debit Credit Balance
Notes Payable Acct. No. 211
Date Explanation PR Debit Credit Balance
Feb. 7 R2 5,000 5,000
Accounts Payable Acct. No. 212
Date Explanation PR Debit Credit Balance
Feb. 9
17
G2
G2
85
625
625
540
F. Stone, Capital Acct. No. 311
Date Explanation PR Debit Credit Balance
Feb. 1 R2 100,000 100,000
Sales Acct. No. 411
Date Explanation PR Debit Credit Balance
Sales Discounts Acct. No. 413
Date Explanation PR Debit Credit Balance
Feb. 28 R2 74 74
Cost of Goods Sold Acct. No. 511
Date Explanation PR Debit Credit Balance
Sales Salaries Expense Acct. No. 612
Date Explanation PR Debit Credit Balance
ACCOUNTS RECEIVABLE LEDGER
Carl Cole
Dale Dent
Date Explanation PR Debit Credit Balance
Feb. 2
12
S2
R2
800
800
800
-0-
Gary Glen
Date Explanation PR Debit Credit Balance
Feb. 4
S2
1,250
1,250
ACCOUNTS PAYABLE LEDGER
Able Company
Date Explanation PR Debit Credit Balance
Best Company
Date Explanation PR Debit Credit Balance
Feb. 5
16
P2
P2
1,965
485
1,965
2,450
More Company
Date Explanation PR Debit Credit Balance
Old Company
Date Explanation PR Debit Credit Balance
Feb. 14
P2
1,985 1,985
E-16
BEDROCK COMPANY
Trial Balance
February 28, 20XX
Cash ........................................................................... $67,014
Notes payable............................................................ $ 5,000
Accounts payable...................................................... 2,945
F. Stone, Capital......................................................... 100,000
Sales ........................................................................... 43,985
BEDROCK COMPANY
Schedule of Accounts Receivable
February 28, 20XX
Carl Cole..................................................................... $ 835
BEDROCK COMPANY
Schedule of Accounts Payable
February 28, 20XX
Best Company........................................................... $2,450
E-17
