978-0078025761 Appendix E Solution Manual Part 4

subject Type Homework Help
subject Pages 9
subject Words 1420
subject Authors Barbara Chiappetta, John Wild, Ken Shaw

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page-pf1
Problem E-1B (Continued)
ACCOUNTS RECEIVABLE LEDGER
Carlos Mantel
Date
Explanation
Debit
Credit
Balance
Nov. 10
13,500
13,500
19
13,500
0
22
3,695
3,695
page-pf2
Problem E-1B (Concluded)
Part 3
GRASSLEY COMPANY
Trial Balance
November 30
Debit
Credit
Cash ................................................................
$100,207
Accounts receivable ............................................
7,975
Inventory ...............................................................
36,540
Office supplies .....................................................
459
Store supplies ......................................................
1,040
Office equipment ..................................................
4,136
Accounts payable ................................................
$ 5,635
Long-term notes payable ................................
88,500
Common stock .....................................................
10,000
Retained earnings ................................................
30,000
Sales ................................................................
68,148
Sales discounts ....................................................
506
Costs of goods sold ............................................
38,250
Sales salaries expense ................................
13,170
_______
Totals ................................................................
$202,283
$202,283
GRASSLEY COMPANY
page-pf3
Problem E-2B (70 minutes)
Parts 1 and 2
SALES JOURNAL
Page 3
Date
Account Debited
Invoice
Number
PR
Accounts Receivable Dr.
Sales Cr.
Cost of Goods Sold Dr.
Inventory Cr.
July 5
Kim Nettle ........................................................
918
19,200
10,500
6
Ruth Blake .......................................................
919
7,500
4,300
13
Ashton Moore ................................
920
8,550
5,230
14
Kim Nettle ........................................................
921
5,100
3,800
29
Ruth Blake .......................................................
922
17,500
10,850
30
Ashton Moore ................................
923
16,820
9,840
31
Totals ................................................................
74,670
44,520
(106/413)
(502/119)
CASH RECEIPTS JOURNAL
Page 3
Date
Account Credited
Explanation
PR
Cash
Dr.
Sales
Discount
Dr.
Accounts
Receivable
Cr.
Sales
Cr.
Other
Accts.
Cr.
Cost of Goods
Sold Dr.
Inventory Cr.
July 15
Kim Nettle ................................
Sale of 7/5 ................................
18,816
384
19,200
15
Sales ................................
Cash sales ................................
118,350
118,350
76,330
16
Ruth Blake ................................
Sale of 7/6 ................................
7,350
150
7,500
21
L.T. Notes Pay. ................................
Note to bank ................................
251
15,000
15,000
23
Ashton Moore ................................
Sale of 7/13 ................................
8,379
171
8,550
24
Kim Nettle ................................
Sale of 7/14 ................................
4,998
102
5,100
31
Sales ................................
Cash sales ................................
80,244
___
_____
80,244
_____
53,855
31
Totals ................................
253,137
807
40,350
198,594
15,000
130,185
(101)
(415)
(106)
(413)
()
(502/119)
page-pf4
Problem E-2B (Continued)
Parts 2 and 3
GENERAL LEDGER
Cash
Acct. No. 101
Date
Explanation
Debit
Credit
Balance
June 30
100,000
July 31
R3
253,137
353,137
Accounts Receivable
Acct. No. 106
Date
Explanation
Debit
Credit
Balance
July 31
S3
74,670
74,670
31
40,350
34,320
Inventory
Acct. No. 119
Date
Explanation
Debit
Credit
Balance
June 30
200,000
July 31
44,520
155,480
31
130,185
25,295
Long-Term Notes Payable
Acct. No. 251
Date
Explanation
Debit
Credit
Balance
June 30
200,000
July 21
15,000
215,000
Common Stock
Acct. No. 307
Date
Explanation
Debit
Credit
Balance
June 30
10,000
Retained Earnings
Acct. No. 318
Date
Explanation
Debit
Credit
Balance
June 30
90,000
Sales
Acct. No. 413
Date
Explanation
Debit
Credit
Balance
July 31
74,670
74,670
31
198,594
273,264
Sales Discounts
Acct. No. 415
Date
Explanation
Debit
Credit
Balance
July 31
807
807
Cost of Goods Sold
Acct. No. 502
Date
Explanation
PR
Debit
Credit
Balance
July 31
S3
44,520
44,520
31
R3
130,185
174,705
page-pf5
Problem E-2B (Continued)
Parts 2 and 3 (continued)
ACCOUNTS RECEIVABLE LEDGER
Ruth Blake
Date
Explanation
Debit
Credit
Balance
July 6
7,500
7,500
16
R3
7,500
0
29
17,500
17,500
Ashton Moore
Date
Explanation
Debit
Credit
Balance
July 13
S3
8,550
8,550
23
8,550
0
30
16,820
16,820
Kim Nettle
Date
Explanation
Debit
Credit
Balance
July 5
19,200
19,200
14
5,100
24,300
15
19,200
5,100
24
5,100
0
Part 4
ACORN INDUSTRIES
Trial Balance
July 31
Debit
Credit
Cash ................................................................
$353,137
Accounts receivable ............................................
34,320
Inventory ...............................................................
25,295
Long-term notes payable ................................
$215,000
Common stock .....................................................
10,000
Retained earnings ................................................
90,000
Sales ................................................................
273,264
Sales discounts ....................................................
807
Cost of goods sold ..............................................
174,705
_______
Totals ................................................................
$588,264
$588,264
page-pf6
Problem E-2B (Concluded)
Part 4continued
ACORN INDUSTRIES
Schedule of Accounts Receivable
July 31
Ruth Blake ..............................................................
$17,500
Ashton Moore .........................................................
16,820
Total accounts receivable ................................
$34,320
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
schedule. Next, recalculate the balance of each subsidiary account to
confirm that the additions and subtractions are correct. Next, trace the
postings from each subsidiary account and from the controlling account
back to the appropriate journals. Since the sales and cash receipts
journals were footed and crossfooted before posting, the previous steps
should disclose the error.
page-pf7
Problem E-3B (80 minutes)
Parts 1 and 3
PURCHASES JOURNAL
Page 3
Date
Account
Date of
Invoice
Terms
PR
Accounts
Payable
Cr.
Inventory
Dr.
Office
Supplies
Dr.
Other
Accounts
Dr.
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
1,250
9
Store Equip./Charms Supply .......................
7/8
n/10, EOM
165/
38,220
38,220
17
Drake Company ................................
7/17
2/10, n/30
7,200
7,200
20
Office Supp./Charms Supply .......................
7/19
n/10, EOM
650
650
26
Teton Company ................................
7/26
2/10, n/30
9,770
9,770
___
_____
31
Totals
63,590
23,470
650
39,470
(201)
(119)
(124)
()
CASH DISBURSEMENTS JOURNAL
Page 3
Date
Ck.
No.
Payee
Account Debited
PR
Cash
Cr.
Inventory
Cr.
Other
Accounts
Dr.
Accounts
Payable
Dr.
July 3
300
The Weekly ................................
Advertising Expense ................................
655
625
625
10
301
Teton Company ................................
Teton Company ................................
6,370
130
6,500
15
302
Payroll. ................................
Sales Salaries Expense ................................
621
31,850
31,850
27
303
Drake Company ................................
Drake Company ................................
4,704
96
4,800
31
304
Payroll ................................
Sales Salaries Expense ................................
621
31,850
___
31,850
_____
31
Totals ................................
75,399
226
64,325
11,300
(101)
(119)
()
(201)
page-pf8
Problem E-3B (Continued)
Parts 1 and 3continued
GENERAL JOURNAL
Page 3
page-pf9
Problem E-3B (Continued)
General Ledgercontinued
Accounts Payable
Acct. No. 201
Date
Explanation
Debit
Credit
Balance
July 8
G3
250
(250)
24
2,400
(2,650)
31
P3
63,590
60,940
31
11,300
49,640
Long-Term Notes Payable
Acct. No. 251
Date
Explanation
Debit
Credit
Balance
June 30
200,000
Common Stock
Acct. No. 307
Date
Explanation
Debit
Credit
Balance
June 30
10,000
Retained Earnings
Acct. No. 318
Date
Explanation
Debit
Credit
Balance
June 30
90,000
Sales Salaries Expense
Acct. No. 621
Date
Explanation
Debit
Credit
Balance
July 15
31,850
31,850
31
31,850
63,700
Advertising Expense
Acct. No. 655
Date
Explanation
Debit
Credit
Balance
July 3
625
625
ACCOUNTS PAYABLE LEDGER
Charm’s Supply
Date
Explanation
Debit
Credit
Balance
July 9
38,220
38,220
20
P3
650
38,870
Drake Company
Date
Explanation
Debit
Credit
Balance
July 17
P3
7,200
7,200
24
2,400
4,800
27
4,800
0
page-pfa
Problem E-3B (Concluded)
Parts 2 and 3continued
Accounts Payable Ledgercontinued
Plaine, Inc.
Date
Explanation
Debit
Credit
Balance
July 7
P3
1,250
1,250
8
250
1,000
Teton Company
Date
Explanation
Debit
Credit
Balance
July 1
6,500
6,500
10
6,500
0
26
9,770
9,770
Part 4
ACORN INDUSTRIES
Trial Balance
July 31
Debit
Credit
Cash ................................................................
$ 24,601
Inventory ...............................................................
220,844
Office supplies .....................................................
650
Store supplies ......................................................
1,000
Store equipment ...................................................
38,220
Accounts payable ................................................
$ 49,640
Long-term notes payable ................................
200,000
Common stock .....................................................
10,000
Retained earnings ................................................
90,000
Sales salaries expense ................................
63,700
Advertising expense ............................................
625
________
Totals ................................................................
$349,640
$349,640
ACORN INDUSTRIES
Schedule of Accounts Payable
July 31
Charm’s Supply ......................................
$38,870
Plaine, Inc ...............................................
1,000
Teton Company ......................................
9,770
Total accounts payable .........................
$49,640

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