9
Sales and Cash
Receipts in a
Perpetual Inventory
System
ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING
QUESTIONS/ETHICAL CASE
2. The normal balance of Sales Discounts is a Dr. balance.
4. A discount period is a short period of time after sale during which a business
5. A. 2/10, n/30; 2 percent off the bill if paid within 10 days of the invoice date or
6. Contra Revenue Account.
8. When cash is received, as a debit to Sales Discounts.
10. The sum of the accounts in the accounts receivable subsidiary ledger at the
11. By placing the accounts in the accounts receivable subsidiary ledger in
12. (√) means the subsidiary ledger is updated. A check is put in the PR column
13. An invoice is a bill for a sale on account; it is used as a source document to
14. A sales tax is a liability because the business owes the tax to the appropriate
government agency.
16. Sales Returns and Allowances, Accounts Receivable or Cash, Merchandise
17. The question in this case is whether Amy should ask the accountant to put
the first two weeks of sales in January back into the previous December.
SOLUTIONS TO CHAPTER 9 CONCEPT CHECKS
1.
Sale $1,000 __________________________________$450 Cost of Goods Sold
2.
Accounts Dr. Cr.
Accounts Payable, Pedro Co.
3.
Accounts Dr. Cr.
Accounts Payable, Labrie Co.
275
4.
Merchandise Inventory
5. a. 1, 2, 3
6.
Account
Category
Increase or
Decrease
T account Update
Sales Returns and
Allowances
Contra revenue
Dr. to increase
Sales Returns &
Allowances
190
Accounts Dr. Cr.
7. a.
Accounts Receivable, Troy Co.
50
Sales
50
Sale on account
Cost of Goods Sold
28
Merchandise Inventory
28
Record cost of the sale
Cash
Sales Discount
Cash
Sale for cash
Cost of Goods Sold
59
Sales Returns and Allowances
Customer returned merchandise
Merchandise Inventory
11
8. LUCKY COMPANY
SCHEDULE OF ACCOUNTS RECEIVABLE
MAY 31, 201X
Jarad Co.
Katz Co.
Turtle Co.
SOLUTIONS TO SET A EXERCISES
9A1.
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Dec.
4
Cash
4
5
0
00
Sales
4
5
0
00
Sales for cash
4
Cost of Goods Sold
3
5
0
00
Cost of merchandise inventory sold
3
3
3
0
0
00
Merchandise Inventory
1
1
0
00
9A-2.
Twilight Co.
Accounts Receivable
112
9/18 GJ1 640
9/18 GJ1 640
9/19 GJ1 850
Bal. 1,490
Merchandise Inventory
115
470 GJ1 9/19
770 Bal.
411
9/19 GJ1 470
Bal. 770
9A-2 Page 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Sep.
Accounts Receivable, Twilight Co.
6
4
0
00
Sales
6
4
0
00
Cost of Goods Sold
3
0
0
00
Merchandise Inventory
3
0
0
00
Sales
8
5
0
00
19
Cost of Goods Sold
4
7
0
00
4
7
0
00
9A-3. Page 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Apr.
5
Cash
1
3
5
0
00
Sales
1
3
5
0
00
5
Cost of Goods Sold
7
2
5
00
Merchandise Inventory
7
2
5
00
Sales Returns and Allowances
5
0
00
Cash
5
0
00
Merchandise Inventory
1
0
00
1
0
00
9A-4.
Date
201X
Account Titles and Description
PR
Dr.
Cr.
July
8
Accounts Receivable, Ring Co.
6
3
0
00
3
9
0
00
3
9
0
1
6
0
0
00
1
6
0
0
2
0
0
00
2
0
0
2
5
00
2
5
9A–5. Page 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Oct.
1
Cash
111
3
3
0
0
00
Ava Roberts, Capital
311
3
3
0
0
00
1
Accounts Receivable, Charleston Co.
9
5
0
00
9
5
0
1
5
5
00
Cost of merchandise sold
2
Accounts Receivable, William Co.
9
6
0
00
Sales
411
9
6
0
00
2
Cost of Goods Sold
414
6
2
5
00
Merchandise Inventory
114
6
2
5
00
Cost of merchandise sold
3
Cash
111
2
2
0
00
Sales
411
2
2
0
00
Cash Sale
8
Sales Returns and Allowances
412
3
5
0
00
Issued Credit Memo #1
414
2
2
5
00
10
Cash
111
5
9
4
00
Sales Discounts
413
6
00
Accounts Receivable, Charleston Co.
113/√
6
0
0
00
Payment Received Less Discount
15
Cash
111
4
4
0
00
15
414
2
8
5
00
114
2
8
5
00
Accounts Receivable, Charleston Co.
Sales
411
8
5
0
00
EXERCISES (CONTINUED)
9A–5. (Continued)
ACCOUNTS RECEIVABLE SUBSIDIARY
LEDGER
PARTIAL GENERAL LEDGER
Charleston Co.
Cash
111
10/01 GJ1
3300
10/03 GJ1
Bal. 850
10/15 GJ1
Bal. 4,554
113
10/02 GJ1 960
10/01 GJ1
950
10/02 GJ1
960
600 GJ1 10/10
Bal. 1,810
Merchandise Inventory
114
Bal. 2,000
455 GJ1 10/01
10/08 GJ1 225
625 GJ1 10/02
140 GJ1 10/03
285 GJ1 10/15
550 GJ1 10/18
Bal. 170
311
411
3,420 Bal.
Sales Returns &
Allowances
412
10/8 GJ1 350
Sales Discount
413
10/10 GJ1 6
414
10/01 GJ1 455
225 GJ1 10/08
10/02 GJ1 625
10/03 GJ1 140
10/15 GJ1 285
10/18 GJ1 550
Bal. 1,830
AVA CO.
SCHEDULE OF ACCOUNTS RECEIVABLE
OCTOBER 31, 201X
9A–6.
Sales ticket price
$ 11,000
–
Credit for return
1,400
=
Sales price after credit
$ 9,600
x
Discount rate
=
Discount
Sales price after credit
$ 9,600
xX
Sales tax rate
=
Sales tax
Sales price after credit
$ 9,600
+
Sales tax
=
Sales price after tax
$ 10,560
–
Discount
=
Amount paid
$ 10,080
SOLUTIONS TO SET B EXERCISES
9B–1.
Date
201X
Account Titles and Description
PR
Dr.
Cr.
July
9
Cash
5
0
0
00
Sales
5
0
0
00
9
Cost of Goods Sold
1
5
0
00
2
5
0
0
00
Merchandise Inventory
1
0
0
00
9B-2
Page 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
May
18
Accounts Receivable, Henry Co.
112/√
5
9
0
00
Sales
5
9
0
00
18
Cost of Goods Sold
3
8
5
00
Merchandise Inventory
3
8
5
00
19
Accounts Receivable, Lincoln Co.
112/√
8
9
0
00
Sales
8
9
0
00
19
Cost of Goods Sold
5
8
0
00
5
8
0
00
Henry Co.
Accounts Receivable
112
5/18 GJ1 590
5/18 GJ1 590
5/19 GJ1 890
Bal. 1,480
411
5/18 GJ1 385
5/19 GJ1 580
Bal. 965
9B-3. Page 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Apr.
5
Cash
1
2
5
0
00
Sales
1
2
5
0
00
Cash Sale
5
Cost of Goods Sold
8
5
0
00
Merchandise Inventory
8
5
0
00
Cost of merchandise inventory sold
Sales Returns and Allowances
7
0
00
Cash
7
0
00
Merchandise Inventory
2
5
00
2
5
00
EXERCISES (CONTINUED)
9B–4.
Date
201X
Account Titles and Description
PR
Dr.
Cr.
July
8
Accounts Receivable, Ring Co.
6
2
0
00
9B–5. Page 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Aug.
1
Cash
111
3
2
0
0
00
Andrew Rodgers, Capital
311
3
2
0
0
00
1
Accounts Receivable, Clearview Co.
5
0
00
0
1
2
0
00
Merchandise Inventory
114
4
2
0
00
Cost of merchandise inventory sold
Sales
411
9
5
0
00
2
Cost of Goods Sold
414
6
1
5
00
Merchandise Inventory
114
6
1
5
00
Cost of merchandise inventory sold
3
Cash
0
0
00
Sales Returns and Allowances
412
2
5
0
00
2
5
0
Issued Credit Memo #1
114
1
5
5
00
414
1
5
5
10
Cash
111
3
8
8
00
Sales Discounts
413
1
2
00
Accounts Receivable, Clearview Co.
113
4
0
0
00
Payment Received Less Discount
15
Cash
111
4
0
0
00
Sales
411
4
0
0
00
Cash Sales
15
414
2
5
0
00
114
2
0
00
18
Accounts Receivable, Clearview Co.
113
5
5
0
00
411
5
5
0
00
EXERCISES (CONTINUED)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
PARTIAL GENERAL LEDGER
Clearview Co.
Cash
111
8/01 GJ1 650
250 GJ1 8/08
8/01 GJ1
3200
8/03 GJ1
Bal. 550
8/10 GJ1
8/15 GJ1
Bal. 4,188
113
8/02 GJ1 950
8/01 GJ1
650
8/02 GJ1
950
8/18 GJ1
550
Bal. 1,500
Merchandise Inventory
114
Bal. 3,000
420 GJ1 8/01
8/08 GJ1 155
615 GJ1 8/02
130 GJ1 8/03
250 GJ1 8/15
340 GJ1 8/18
Bal. 1,400
311
3200 GJ1 8/01
411
650 GJ1 8/01
550 GJ1 8/18
2,750 Bal.
Allowances
412
8/8 GJ1 250
Sales Discount
413
08/10 GJ1 12
414
8/01 GJ1 420
155 GJ1 8/08
8/02 GJ1 615
8/03 GJ1 130
8/15 GJ1 250
8/18 GJ1 340
Bal. 1,600
9B–5.
Sales ticket price
$ 10,000
–
Credit for return
800
=
Sales price after credit
x
Discount rate
=
Discount
Sales price after credit
x
Sales tax rate
=
Sales tax
Sales price after credit
+
Sales tax
460
=
Sales price after tax
–
Discount
=
Amount paid
SOLUTIONS TO SET A PROBLEMS
PROBLEM 9A-1
(1)
FONTINA AND STUFF
GENERAL JOURNAL
PAGE 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Feb.
1
Accounts Receivable, Fran Co.
112/√
8
5
0
00
Grocery Sales
411
8
5
0
00
1
Grocery Cost of Goods Sold
512
6
4
0
00
117
6
4
0
00
Cost of merchandise inventory sold
4
Accounts Receivable, Groom Co.
112/√
1
1
0
0
00
Cheese Sales
410
1
1
0
0
00
Sales Inv. 2 on Account to Groom
4
Cheese Cost of Goods Sold
511
8
2
5
00
Cheese Merchandise Inventory
116
8
2
5
00
Cost of merchandise inventory sold
8
Accounts Receivable, Dutch Co.
112/√
1
1
0
0
00
Grocery Sales
411
1
1
0
0
00
8
Grocery Cost of Goods Sold
512
7
5
0
00
117
7
5
0
00
Cost of merchandise inventory sold
10
Sales Returns and Allowances
412
1
6
0
00
Accounts Receivable, Fran Co.
112/√
1
6
0
00
10
Grocery Merchandise Inventory
117
9
0
00
Grocery Cost of Goods Sold
512
9
0
00
Cost of merchandise inventory returned
15
Accounts Receivable, Groom Co.
112/√
2
5
0
00
Cheese Sales
410
2
5
0
00
Sales Inv. 4 on Account to Groom
15
Cheese Cost of Goods Sold
511
1
8
0
00
Cheese Merchandise Inventory
116
1
8
0
00
Cost of merchandise inventory sold
Accounts Receivable, Dutch Co.
112/√
6
5
0
00
19
Grocery Cost of Goods Sold
512
4
7
5
00
Grocery Merchandise Inventory
117
4
7
5
00
25
7
0
0
00
(2)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME
DUTCH CO.
ADDRESS
8 JOSS AVE., LYNN, MA 01947
201X
Explanation
Ref.
Debit
Credit
Dr. Balance
8
1
1
Date
Post
NAME
FRAN CO.
ADDRESS
942 MOSE ST., REVERE, MA 01938
Date
201X
Explanation
Post
Ref.
Debit
Credit
Dr. Balance
1
8
5
0
00
8
5
0
00
1
PROBLEM 9A-1 (CONTINUED)
NAME
GROOM CO.
ADDRESS
10 LOST RD., TOPSFIELD, MA 01998
Date
201X
Explanation
Post
Ref.
Debit
Credit
Dr. Balance
2
5
0
1
3
5
0
FONTINA AND STUFF
GENERAL LEDGER
ACCOUNTS RECEIVABLE
ACCOUNT NO. 112
Date
201X
Explanation
Post
Ref.
Debit
Credit
Balance
Debit
Credit
Feb.
1
GJ1
8
5
0
00
8
5
0
00
GJ1
1
1
0
0
1
9
5
0
00
GJ1
1
6
0
2
8
9
0
00
CHEESE MERCHANDISE INVENTORY
ACCOUNT NO. 116
Date
201X
Explanation
Post
Ref.
Debit
Credit
Balance
Debit
Credit
7
0
0
0
00
Feb.
GJ1
8
2
5
6
1
7
5
00
GJ1
1
8
0
5
9
9
5
00