PB–27B, cont.
Requirements
1. Use the appropriate journal to record the preceding transactions in a sales journal (omit the
Invoice No. column) and a cash receipts journal (omit the Sales Discounts Forfeited column).
2. Total each column of the sales journal and the cash receipts journal. Determine that total
debits equal total credits.
3. Show how postings would be made from the journals by writing the account numbers and
check marks in the appropriate places in the journals.
SOLUTION
Requirements 1, 2 and 3
PB–28B Using the purchases, cash payments, and general journals
Learning Objective 3
Purchases Journal, Accounts Payable CR column total $19,470
The general ledger of Finnish Lake Golf Shop includes the following selected accounts, along
with their account numbers:
Number Account Number Account
111 Cash 181 Equipment
131 Merchandise Inventory 211 Accounts Payable
161 Prepaid Insurance 564 Rent Expense
171 Office Supplies 583 Utilities Expense
Transactions in December that affected purchases and cash payments were as follows:
Dec. 2 Purchased merchandise inventory on credit from Tighe, $4,100. Terms were 3/10, n/30.
3 Paid monthly rent, debiting Rent Expense for $2,200.
5 Purchased office supplies on credit terms of 3/10, n/30 from Rapid Supply, $470.
8 Received and paid electricity utility bill, $510.
9 Purchased equipment on account from A-1 Equipment, $6,900. Payment terms were net 30.
10 Returned the equipment to A-1 Equipment. It was damaged.
11 Paid Tighe the amount owed on the purchase of December 2.
12 Purchased merchandise inventory on account from Crystal Golf, $4,900. Terms were 1/10,
n/30.
13 Purchased merchandise inventory for cash, $660.
14 Paid a semiannual insurance premium, debiting Prepaid Insurance, $1,200.
16 Paid its account payable to Rapid Supply from December 5.
18 Received and paid gas and water utility bills, $500.
21 Purchased merchandise inventory on credit terms of 1/10, n/45 from Devin, Inc., $3,000.
21 Paid its account payable to Crystal Golf from December 12.
22 Purchased office supplies on account from Office Stuff, Inc., $100. Terms were n/30.
26 Returned to Devin, Inc. $1,000 of the merchandise inventory purchased on December 21.
31 Paid Devin, Inc. the net amount owed from December 21 less the return on December 26.
PB–28B, cont.
Requirements
1. Use the appropriate journal to record the preceding transactions in a purchases journal, a cash
payments journal (omit the Check No. column), and a general journal. Finnish Lake Golf Shop records
purchase returns in the general journal. The company uses the perpetual inventory system.
2. Total each column of the special journals. Show that total debits equal total credits in each special
journal.
3. Show how postings would be made from the journals by writing the account numbers and check
marks in the appropriate places in the journals.
SOLUTION
PB–29B Using all journals, posting, and balancing the ledgers
Learning Objectives 2, 3
Trial balance, total debits $47,950
Atlanta Computer Security uses the perpetual inventory system and makes all credit sales on
terms of n/30. During March, Atlanta completed these transactions:
Mar. 2 Issued invoice no. 191 for sale on account to L. E. Kingston, $3,000 (cost, $800).
3 Purchased merchandise inventory on credit terms of 3/10, n/60 from High, $2,500.
4 Sold merchandise inventory for cash, $1,100 (cost, $300).
5 Issued check no. 473 to purchase furniture for cash $2,450.
8 Collected interest revenue of $1,150.
9 Issued invoice no. 192 for sale on account to Common Co., $5,700 (cost, $2,200).
10 Purchased merchandise inventory for cash, $1,400, issuing check no. 474.
12 Received cash from L. E. Kingston in full settlement of her account receivable from the sale
of March 2.
13 Issued check no. 475 to pay High net amount owed from March 3. Round to the nearest
dollar.
13 Purchased office supplies on account from Mann Corp., $350. Terms were n/EOM.
15 Sold merchandise inventory on account to Suarez Co., issuing invoice no. 193 for $700
(cost, $250).
18 Issued invoice no. 194 for credit sale to L. E. Kingston, $400 (cost, $200).
19 Received cash from Common Co. in full settlement of its account receivable from March 9.
20 Purchased merchandise inventory on credit terms of n/30 from James Swenson, $2,200.
22 Purchased furniture on credit terms of 3/10, n/60 from High, $400.
22 Issued check no. 476 to pay for insurance coverage, debiting Prepaid Insurance for $1,800.
24 Sold office supplies to an employee for cash of $100, which was Atlanta’s cost.
25 Received bill and issued check no. 477 to pay utilities, $550.
28 Purchased merchandise inventory on credit terms of 2/10, n/30 from Mann Corp., $550.
29 Returned damaged merchandise inventory to Mann Corp., issuing a debit memo for $550.
29 Sold merchandise inventory on account to Common Co., issuing invoice no. 195 for $2,800
(cost, $1,400).
30 Issued check no. 478 to pay Mann Corp. in full for March 13 purchase.
31 Received cash in full from L. E. Kingston on credit sale of March 18.
31 Issued check no. 479 to pay monthly salaries of $1,550.
PB–29B, cont.
Requirements
1. Open four-column general ledger accounts using Atlanta Computer Security’s account numbers
and balances as of March 1, 2018, that follow. All accounts have normal balances.
Number Account Bal.
111 Cash $ 15,800
112 Accounts Receivable 1,900
114 Merchandise Inventory 6,500
116 Office Supplies 600
117 Prepaid Insurance 0
151 Furniture 2,000
211 Accounts Payable 900
311 Common Stock 14,000
314 Retained Earnings 6,600
411 Sales Revenue 7,600
419 Interest Revenue 1,400
511 Cost of Goods Sold 2,100
531 Salaries Expense 1,300
541 Utilities Expense 300
2. Open four-column accounts in the subsidiary ledgers with beginning balances as of March 1, if any.
Accounts receivable subsidiary ledger: Arrundel Co., $1,900; Common Co., $0; L. E. Kingston, $0; and
Suarez, $0. Accounts payable subsidiary ledger: High, $0; Mann Corp, $0; James Swenson, $0; and
Young Co., $900.
3. Enter the transactions in a sales journal (page 8), a cash receipts journal (page 3, omit Sales Discounts
Forfeited column), a purchases journal (page 6), a cash payments journal (page 9), and a general
journal (page 4), as appropriate.
4. Post daily to the accounts receivable subsidiary ledger and to the accounts payable subsidiary ledger.
5. Total each column of the special journals. Show that total debits equal total credits in each special
journal. On March 31, post to the general ledger.
6. Prepare a trial balance as of March 31, 2018, to verify the equality of the general ledger. Balance the
total of the customer account ending balances in the accounts receivable subsidiary ledger against
Accounts Receivable in the general ledger. Do the same for the accounts payable subsidiary ledger and
Accounts Payable in the general ledger.
PB–29B, cont.
SOLUTION
PB–29B, cont.
Requirements 1 and 5, cont.
