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CHAPTER 7
SOLUTIONS TO EXERCISES—SET B
EXERCISE 7-1B
(a) $241,000. Beginning balance of $200,000 plus $252,000 debit from sales
journal less $211,000 credit from cash receipts journal.
(b) $119,000. Beginning balance of $120,000 plus $151,000 credit from pur-
chases journal less $152,000 debit from cash payments journal.
EXERCISE 7-2B
To: Danny Marshall, Chief Financial Officer
From: Student
Subject: Morgan Hoover account
The explanation of the three entries in the subsidiary ledger for the Morgan
Hoover account is as follows:
Sept. 4 This was a credit sale of merchandise to Hoover. The entry was
recorded on page 29 of the Sales Journal.
EXERCISE 7-3B
(a)&(b) General Ledger
Accounts Receivable
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
Balance
12,960
Accounts Receivable Subsidiary Ledger
Cedeno
Date
Explanation
Ref.
Debit
Credit
Balance
Fanestil
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
Balance
5,320
Fernetti
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
Balance
2,560
Miranda
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
0
EXERCISE 7-3B (Continued)
Verduzco
Date
Explanation
Ref.
Debit
Credit
Balance
(c) BRIDGES COMPANY
Schedule of Accounts Receivable
As of September 30, 2017
Cedeno ...................................................................................... $1,800
Fanestil ...................................................................................... 3,595
EXERCISE 7-4B
(a) $5,300 [$15,000 – ($6,000 + $3,700).
(b) $20,500 [$15,000 + ($16,000 + $11,000 + $13,000) – ($12,000 + $4,000 + $14,000) – $4,500].
(c) Kline ($6,000 + $16,000 – $12,000) $ 10,000
EXERCISE 7-5B
(a) $4,800 [$11,600 – ($4,200 + $2,600).
(b) $13,750 [$11,600 + ($9,500 + $7,350 + $8,900) – ($8,400 + $2,600 + $9,500) – $3,100].
(c) Smythe ($4,200 + $9,500 – $8,400) $ 5,300
EXERCISE 7-6B
(a)&(b) ORENDER COMPANY
Sales Journal
S1
Date
Account
Debited
Invoice
No.
Ref.
Accounts Receivable Dr.
Sales Revenue Cr.
Cost of Goods Sold Dr.
Inventory Cr.
ORENDER COMPANY
Purchases Journal
P1
Date
Account Credited
Terms
Ref.
Inventory Dr.
Accounts Payable Cr.
2017
EXERCISE 7-7B
(a)&(b) STROBEL CO.
Cash Receipts Journal
CR1
Date
Account
Credited
Ref.
Cash
Dr.
Sales
Discounts
Dr.
Accounts
Receivable
Cr.
Sales
Revenue
Cr.
Other
Accounts
Cr.
Cost of Goods Sold
Dr.
Inventory
Cr.
2017
May 1
Owner’s Cap.
40,000
40,000
EXERCISE 7-7B (Continued)
STROBEL CO.
Cash Payments Journal
CP1
Date
Ck.
No.
Account Debited
Ref.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Cash
Cr.
2017
May 3
101
Inventory
4,300
4,300
EXERCISE 7-8B
(a) Journal
(b) Columns in the journal
1.
2.
Cash Receipts
Cash Receipts
Cash (Dr.), Other Accounts (Cr.).
Cash (Dr.), Sales Discounts (Dr.), and
Accounts Receivable (Cr.).
EXERCISE 7-9B
(a) Mar. 2 Equipment ..................................................... 7,500
Accounts Payable—Otto
Company ........................................... 7,500
5 Accounts Payable—Wade
(b) To: President Gaston
From: Chief Accountant
Subject: Posting of Control and Subsidiary Accounts
The posting of these accounts varies with the journals used in recording
the transactions.
Sales and purchases journals—the total for the month is posted to
the control accounts. The individual entries are posted daily to the
subsidiary accounts.
I hope this memo answers your questions about posting.
EXERCISE 7-10B
1. General Journal 8. Cash Payments Journal
2. Cash Payments Journal 9. Cash Receipts Journal
EXERCISE 7-11B
(a) The debit posting reference on February 28 should be from the cash
payments journal to record the payments made during the month. The
EXERCISE 7-12B
(a)
Purchases Journal P1
Date
Account Credited
Ref.
Inventory Dr.
Accounts Payable Cr.
July 3
12
Baker Co.
Eldridge Co.
2,200
400
120/201
EXERCISE 7-12B (Continued)
(b) General Journal
Date
Accounts and Explanations
Ref.
Debit
Credit
July 1
Equipment ........................................
Accounts Payable—Alma
Equipment Co. .....................
153/
201/
3,500
3,500
EXERCISE 7-13B
$1,385 ($300 + $360 + $210 + $290 + $225). All of the debit postings to the sub-
sidiary ledger accounts should be from sales invoices. The total of all these
EXERCISE 7-14B
(a) $22,000 + $93,000 – $58,000 = $57,000
SOLUTIONS TO PROBLEMS—SET C
PROBLEM 7-1C
(a)
Cash Receipts Journal CR1
Date
Account
Credited
Ref.
Cash
Dr.
Sales
Discounts
Dr.
Accounts
Receivable
Cr.
Sales
Revenue
Cr.
Other
Accounts
Cr.
Cost of Goods Sold
Dr.
Inventory
Cr.
June 1
3
Owner’s
Capital
Naylor Co.
301
10,000
1,274
26
1,300
10,000
(b) General Ledger
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Accounts Receivable Subsidiary Ledger
Archer & Daughter
Date
Explanation
Ref.
Debit
Credit
Balance
PROBLEM 7-1C (Continued)
Emler Co.
Date
Explanation
Ref.
Debit
Credit
Balance
Hinson Bros.
Date
Explanation
Ref.
Debit
Credit
Balance
Naylor Co.
Date
Explanation
Ref.
Debit
Credit
Balance
(c) Accounts receivable balance = 0.
PROBLEM 7-2C
(a)
Cash Payments Journal CP1
Date
Ck.
No.
Account Debited
Ref.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Inventory
Cr.
Cash
Cr.
Nov. 1
3
11
12
Inventory
Equipment
120
157
1,140
1,700
1,140
1,700
(b) General Ledger
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 1
Balance
9,350
Accounts Payable Subsidiary Ledger
B. Mosby & Co.
Date
Explanation
Ref.
Debit
Credit
Balance
PROBLEM 7-2C (Continued)
D. Prothe
Date
Explanation
Ref.
Debit
Credit
Balance
H. Susscan
Date
Explanation
Ref.
Debit
Credit
Balance
Nov. 1
15
Balance
CP1
1,000
1,000
0
Xavier Bros.
Date
Explanation
Ref.
Debit
Credit
Balance
(c) Accounts payable balance: $2,100
PROBLEM 7-3C
(a)
Purchases Journal P1
Date
Account Credited (Debited)
Ref.
Accounts
Payable
Cr.
Inventory
Dr.
Other
Accounts
Dr.
May 2
3
Wilkins Company
Kwik Freight
7,500
360
7,500
360
Sales Journal
S1
Date
Account Debited
Ref.
Accounts Receivable Dr.
Sales Revenue Cr.
Cost of Goods Sold Dr.
Inventory Cr.
May 5
5
May Company
Stein Bros.
1,980
2,700
1,287
1,755
PROBLEM 7-3C (Continued)
General Journal
Date
Accounts and Explanations
Ref.
Debit
Credit
May 10
Accounts Payable—Allan
Company .......................................
Inventory ..................................
201/
120/
500
500
(b) General Ledger
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
May 31
S1
12,180
12,180
Inventory No. 120
Date
Explanation
Ref.
Debit
Credit
Balance
May 31
P1
36,760
36,760
