PROBLEM SET B
Problem 7-4BA (70 minutes)
Parts 1 and 2
SALES JOURNAL Page 3
Date Account Debited
Invoice
Number PR
Accounts Receivable Dr.
Sales Cr.
July 5 Kim Nettle……………………..………….918 19,200
6 Ruth Blake…………………….………….919 7,500
13 Ashton Moore……………………..…….920 8,550
CASH RECEIPTS JOURNAL Page 3
Date
Account
Credited Explanation PR
Cash
Dr.
Sales
Discounts
Dr.
Accounts
Receivable
Cr.
Sales
Cr.
Other
Accounts
Cr.
July
15
Kim Nettle……………………..…..……..…….Sale of 7/5…………………………………………………………………...
18,816 384 19,200
Moore…………………….……..……..……..…
24 Kim Nettle……………………..…..……..…….Sale of 7/14…………………………………………………………..……..
4,998 102 5,100
31 Sales………………………………………………Cash sales……………………………………………………………….….
80,244
___ _____ 80,244
_____
31 Totals………………………………….…..……..
253,137
807
40,350
198,594
15,000
(101) (415) (106) (413) ()
Problem 7-4BA (Continued)
Parts 2 and 3
GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
June 30 200,000
Long-Term Notes Payable Acct. No. 251
Date Explanation PR Debit Credit Balance
June 30 200,000
July 21 R3 15,000 215,000
R. Acorn, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
Problem 7-4BA (Continued)
Parts 2 and 3—continued
ACCOUNTS RECEIVABLE LEDGER
Ruth Blake
Date Explanation PR Debit Credit Balance
July 6 S3 7,500 7,500
16 R3 7,500 0
29 S3 17,500 17,500
Ashton Moore
Date Explanation PR Debit Credit Balance
Part 4
ACORN INDUSTRIES
Trial Balance
July 31
Debit Credit
Cash………………………………….…………………………$353,137
Accounts receivable……………………………………..34,320
Inventory………………………………………………………200,000
Problem 7-4BA (Concluded)
Part 4—continued
ACORN INDUSTRIES
Schedule of Accounts Receivable
July 31
Ruth Blake……………………………………………………...$17,500
Part 5
Analysis component
To find the error(s), first re-add the account balances on the schedule of
accounts receivable to confirm that the addition is correct. Then, trace the
balances listed on the schedule of accounts receivable back to the
subsidiary accounts to confirm that they are listed correctly on the
Problem 7-5BA (100 minutes)
Parts 1 and 3
PURCHASES JOURNAL
Date Account
Date of
Invoice Terms PR
Accounts
Payable
Cr.
Purchases
Dr.
Office
Supplies
Dr.
Accounts
July 1 Teton Company…………………………….…6/30 2/10, n/30 6,500 6,500
7 Store Supp./Plaine Inc………………..……..7/7 n/10, EOM 125/1,250
9Store Equip./Charm’s Supply……..............
7/8 n/10, EOM 165/38,220
CASH DISBURSEMENTS JOURNAL
Date
Ck.
No. Payee Account Debited PR
Cash
Cr.
Purchases
Discounts
Cr.
Other
Accounts
Dr.
Accounts
Payable
July
3
300 The Weekly ……………....……..……..……..Advertising Expense……………………………….…..……..……..…
65
5
625 625
10 301 Teton Company……..…..……..……..……..Teton Company……………………………………………….…..………
6,370 130
15 302 Payroll…………………………………………….Sales Salaries Expense…………………………...……..……..……..
62
31,850 31,850
Problem 7-5BA (Continued)
Parts 1 and 3—continued
GENERAL JOURNAL Page 3
July 8 Accounts Payable—Plaine…………….…………201/250
Store Supplies……………………………………125 250
Received a credit memorandum.
Parts 2 and 3
GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
June 30 100,000
July 31 D3 75,399 24,601
Inventory Acct. No. 119
Store Equipment Acct. No. 165
Date Explanation PR Debit Credit Balance
July 9 P3 38,220 38,220
Problem 7-5BA (Continued)
Parts 2 and 3—continued
General Ledger—continued
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
July 8 G3 250 (250)
Long-Term Notes Payable Acct. No. 251
Date Explanation PR Debit Credit Balance
June 30 200,000
R. Acorn, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
June 30 100,000
Purchases Acct. No. 505
31 D3 31,850 63,700
Advertising Expense Acct. No. 655
Date Explanation PR Debit Credit Balance
July 3 D3 625 625
Problem 7-5BA (Continued)
Parts 2 and 3—continued
ACCOUNTS PAYABLE LEDGER
Charm’s Supply
Date Explanation PR Debit Credit Balance
July 9 P3 38,220 38,220
20 P3 650 38,870
Drake Company
Date Explanation PR Debit Credit Balance
Teton Company
Date Explanation PR Debit Credit Balance
July 1 P3 6,500 6,500
10 D3 6,500 0
26 P3 9,770 9,770
Problem 7-5BA (Concluded)
Part 4
ACORN INDUSTRIES
Trial Balance
July 31
Debit Credit
Cash………………………………….…………………………$ 24,601
Inventory………………………………………………………
200,000
Long-term notes payable……………………………… 200,000
R. Acorn, Capital……………………….…………………. 100,000
Purchases……………………………………….……….…..
23,470
Totals………………………………………………….………..
ACORN INDUSTRIES
Schedule of Accounts Payable
July 31
Charm’s Supply………………………….…………………$38,870
7A-502