Exercise E-5 (15 minutes)
a) Accounts Payable Ledger
ACCOUNTS PAYABLE LEDGER
Bailey Company
Date Explanation PR Debit Credit Balance
Jan. 9 P1 14,000 14,000
19 D1 10,100 3,900
Johnson Brothers
Date Explanation PR Debit Credit Balance
Preston Company
Date Explanation PR Debit Credit Balance
Jan. 22 P1 6,200 6,200
31 D1 5,400 800
b) General Journal
GENERAL JOURNAL
Accounts Payable
Date Explanation PR Debit Credit Balance
Exercise E-6 (25 minutes)
CASH DISBURSEMENTS JOURNAL
Date
Ck.
No. Payee
Account
Debited PR
Cash
Cr.
Inventory
Cr.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Apr.
9
210 Kitt Corp………….…..……….Store Supplies…….……………………………..….
650 650
17 211 City Bank………..…………….Notes Payable………………..….……………….…
1,400 1,400
Exercise E-7 (10 minutes)
April 3 Purchases Journal
9 Cash Disbursements Journal
12 Sales Journal
17 Cash Disbursements Journal
Exercise E-8 (10 minutes)
1. B When crossfooting the Purchases Journal.
Exercise E-9 (10 minutes)
a. (i) The June 5 purchase would be recorded in the Purchases Journal.
b. The error in journalizing the June 14 transaction should be discovered
in the process of crossfooting the Cash Disbursements Journal.
Exercise E-10 (30 minutes)
Part 1
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Anna Page Sara Reed Aaron Reckers
Part 2
GENERAL LEDGER
Accounts Receivable Sales
Sales Returns and
Allowances
May
31
10,010 May
20
350 May
31
10,010 May 20 350
31
Part 3
MOUNTAIN VIEW
Schedule of Accounts Receivable
May 31
Anna Page…………….………………………… $ 1,500
Sara Reed……………………………………….. 4,280
Accounts Receivable Controlling Account
Total debit………………………….….……..….….$10,010
Exercise E-11 (20 minutes)
Segment Income
(in $ mil.)
Segment Assets
(in $ mil.)
Segment Return
on Assets
Segment 2015 2014 2015 2014 2015
Specialty
Skiing Group…........... $ 72 $ 68 $ 591 $ 450 13.8%
Skating Group............ 19 16 63 52 33.0%
General Merchandise
South America………... 42 46 315 284 14.0%
United States….….…... 17 18 62 45 31.8%
Analysis and interpretation: This company shows solid profitability in all
segments based on segment return on assets.
For the specialty segments, the “Other Specialty” has the highest segment
For the geographic segments, the highest segment return on assets is
PROBLEM SET A
Problem E-1A (100 minutes)
Parts 1 and 2
SALES JOURNAL Page 2
Date Account Debited
Invoice
Number PR
Accounts Receivable Dr.
Sales Cr.
Cost of Goods Sold Dr.
Inventory Cr.
Mar. 2 Min Cho……….…………...………..……..…854 16,800 8,400
3 Linda Witt…………………..…..…………....855 10,200 5,800
31 Totals…..………………………..….……..….. 51,825
27,600
(106/413) (502/119)
PURCHASES JOURNAL Page 2
Date Account
Date of
Invoice Terms PR
Accounts
Payable
Cr.
Inventory
Dr.
Office
Supplies
Dr.
Other
Accounts
Dr.
Mar. 1 Van Industries……………..……..…….……..
3/1 2/15, n/30 43,600 43,600
3 Gabel Company………………….……………
3/3 n/10, EOM 1,230 1,230
31 Totals…………………………….….…….…….. 101,075
76,225
1,230
23,620
(201) (119) (124) ()
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Solutions Manual, Appendix E 15
Problem E-1A (Continued)
Parts 1 and 2—continued
CASH RECEIPTS JOURNAL Page 2
Date
Account Credited
Explanation PR
Cash
Dr.
Sales
Discoun
t
Dr.
Accounts
Receivable
Cr.
Sales
Cr.
Other
Accts.
Cr.
Cost of Goods
Sold Dr.
Inventory Cr.
Mar. 6 L.T. Notes Pay…………………………………..Note to bank……………………………………………………..…………
251 82,000 82,000
12 Min Cho………………………..…………….….Invoice, 3/2………………………………………………………………….
16,464 336 16,800
13 Linda Witt………………………………………..Invoice 3/3………………………………………………….……….………
9,996 204 10,200
(101) (119) () (201)
Problem E-1A (Continued)
Parts 1 and 2—continued
GENERAL JOURNAL Page 2
Mar. 17 Accounts Payable—CD Co........................................201/2,425
Inventory……………..…………………..….….…….….…..119 2,425
Received a credit memo for returns.
GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
Mar. 31 R2 178,808 178,808
31 D2 108,924 69,884
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
Inventory Acct. No. 119
31 P2 76,225 83,800
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
Store Supplies Acct. No. 125
Date Explanation PR Debit Credit Balance
Mar. 16 P2 1,770 1,770
Problem E-1A (Continued)
Office Equipment
Acct. No. 163
Date Explanation PR Debit Credit Balance
Mar. 9 P2 21,850 21,850
19 G2 630 21,220
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
Long-Term Notes Payable Acct. No. 251
Date Explanation PR Debit Credit Balance
Common Stock Acct. No. 307
Date Explanation PR Debit Credit Balance
Mar. 1 3,000
Retained Earnings Acct. No. 318
Date Explanation PR Debit Credit Balance
Mar. 1 7,000
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
Sales Discounts Acct. No. 415
Date Explanation PR Debit Credit Balance
Cost of Goods Sold Acct. No. 502
Date Explanation PR Debit Credit Balance
Mar. 31 R2 37,030 37,030
Mar. 31 S2 27,600 64,630
Sales Salaries Expense Acct. No. 621