Concept explainers
The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer.
Jan. 2 Issued Ck. No. 6981 to JSS Management Company for monthly rent, $775.
2 J. Hammond, the owner, invested an additional $3,500 in the business.
4 Bought merchandise on account from Valencia and Company, invoice no. A691, $2,930; terms 2/10, n/30; dated January 2.
4 Received check from Vega Appliance for $980 in payment of $1,000 invoice less discount.
4 Sold merchandise on account to L. Paul, invoice no. 6483, $850.
6 Received check from Petty, Inc., $637, in payment of $650 invoice less discount.
7 Issued Ck. No. 6982, $588, to Fischer and Son, in payment of invoice no. C1272 for $600 less discount.
7 Bought supplies on account from Doyle Office Supply, invoice no. 1906B, $108; terms net 30 days.
7 Sold merchandise on account to Ellison and Clay, invoice no. 6484, $787.
9 Issued credit memo no. 43 to L. Paul, $54, for merchandise returned.
11 Cash sales for January 1 through January 10, $4,863.20.
11 Issued Ck. No. 6983, $2,871.40, to Valencia and Company, in payment of $2,930 invoice less discount.
14 Sold merchandise on account to Vega Appliance, invoice no. 6485, $2,050.
Jan. 18 Bought merchandise on account from Costa Products, invoice no. 7281D, $4,854; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to the invoice, $147 (total $5,001).
21 Issued Ck. No. 6984, $194, to M. Miller for miscellaneous expenses not recorded previously.
21 Cash sales for January 11 through January 20, $4,591.
23 Issued Ck. No. 6985 to Forbes Freight, $96, for freight charges on merchandise purchased on January 4.
23 Received credit memo no. 163, $376, from Costa Products for merchandise returned.
29 Sold merchandise on account to Bruce Supply, invoice no. 6486, $1,835.
31 Cash sales for January 21 through January 31, $4,428.
31 Issued Ck. No. 6986, $53, to M. Miller for miscellaneous expenses not recorded previously.
31 Recorded payroll entry from the payroll register: total salaries, $6,200; employees’ federal income tax withheld, $872; FICA Social Security tax withheld, $384.40, FICA Medicare tax withheld, $89.90.
31 Recorded the payroll taxes: Social Security tax, $384.40, FICA Medicare tax, $89.90; state
31 Issued Ck. No. 6987, $4,853.70, for salaries for the month.
31 J. Hammond, the owner, withdrew $1,000 for personal use, Ck. No. 6988.
Required
- 1. Record the transactions in the general journal for January. If you are using Working Papers, start with page 1 in the journal. Assume the periodic inventory method is used.
The chart of accounts is as follows:
- 2.
Post daily all entries involving customer accounts to the accounts receivable ledger. - 3. Post daily all entries involving creditor accounts to the accounts payable ledger.
- 4. Post daily the general
journal entries to the general ledger. Write the owner’s name in the Capital and Drawing accounts. - 5. Prepare a
trial balance . - 6. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?
1.
Journalize the transactions in the general journal using the periodic inventory method.
Explanation of Solution
General journal is a record of financial transaction. The transactions are recorded in the journal prior to posting them to the accounts in the general ledger.
Periodic inventory system: The method or system of recording the transactions related to inventory occasionally or periodically are referred to as periodic inventory system.
Journalize the transactions in the general journal.
GENERAL JOURNAL PAGE 1
Date | Description | Post Ref. | Debit ($) | Credit ($) | |||
20-- | |||||||
Jan | 2 | Rent Expense | 627 | 775 | |||
Cash | 111 | 775 | |||||
(Record the paid month rent, Ck.No.6981) | |||||||
2 | Cash | 111 | 3,500 | ||||
Mr. H, Capital | 311 | 3,500 | |||||
(Record the additional capital invested by the owner) | |||||||
4 | Purchases | 511 | 2,930 | ||||
Accounts Payable, V Company | 212/ | 2,930 | |||||
(Purchased merchandise from V Company, invoice no.A691,invoice dated January 2,terms 2/10, n/30) | |||||||
4 | Cash | 111 | 980 | ||||
Sales Discount | 413 | 20 | |||||
Accounts Receivable | 113/ | 1,000 | |||||
(Payment of invoice less discount) | |||||||
4 | Accounts Receivable Mr. P | 113/ | 850 | ||||
Sales | 411 | 850 | |||||
(Record the sale of merchandise to Mr. P, invoice no.6483) | |||||||
6 | Cash | 111 | 637 | ||||
Sales Discount | 413 | 13 | |||||
Accounts Receivable, Petty, Inc. | 113/ | 650 | |||||
(Record the payment of invoice less discount) | |||||||
7 | Accounts Payable, F Company | 212/ | 600 | ||||
Purchase Discount | 513 | 12 | |||||
Cash | 111 | 588 | |||||
(Record the paid invoice no.C1272, Ck.No.6982) |
GENERAL JOURNAL PAGE 2
7 | Supplies | 115 | 108 | |||
Accounts Payable, D Company | 212 | 108 | ||||
(Record the office supply, Invoice no. 1906B,term net 30) | ||||||
7 | Accounts Receivable, Mr. E & C | 113/ | 787 | |||
sales | 411 | 787 | ||||
(Record the sale of merchandise to Mr. E & C invoice no.6484) | ||||||
9 | Sales Return and Allowance | 412 | 54 | |||
Accounts Receivable, Mr. P | 113/ | 54 | ||||
(Record the issued credit memo no.43) | ||||||
11 | Cash | 111 | 4,863.20 | |||
Sales | 411 | 4,863.20 | ||||
(Record the cash sales, January 1-10) | ||||||
11 | Accounts Payable, V Company | 212/ | 2,930 | |||
Cash | 111 | 2,871.40 | ||||
Purchase Discount | 513 | 58.6 | ||||
(Record the invoice paid n.A691 less discount, Ck. No. 6983) | ||||||
14 | Accounts Receivable, V Company | 113/ | 2,050 | |||
Sales | 411 | 2,050 | ||||
(Record the sale of merchandise to V Company, invoice no. 6485) | ||||||
18 | Purchases | 511 | 4,854 | |||
Freight In | 514 | 147 | ||||
Accounts Payable, Mr. C | 212/ | 5,001 | ||||
(Record the purchase of merchandise from C Company, invoice dated January 16) | ||||||
21 | Miscellaneous Expense | 631 | 194 | |||
Cash | 111 | 194 | ||||
(Record the cash paid to Mr. M,Ck.No.6985) | ||||||
21 | Cash | 111 | 4,591 | |||
Sales | 411 | 4,591 | ||||
(Record the cash sales, January 11-20) | ||||||
23 | Freight In | 514 | 96 | |||
Cash | 111 | 96 | ||||
(Record the freight charge, Ck. No. 6985) |
GENERAL JOURNAL PAGE 3
23 | Accounts Payable, C Company | 212/ | 376 | |||
Purchase Return and Allowance | 512 | 376 | ||||
(Record return on merchandise credit memo.163) | ||||||
29 | Accounts Payable, B Company | 113/ | 1,835 | |||
Sales | 411 | 1,835 | ||||
(Record the sale of merchandise to B Company invoive no.6486) | ||||||
31 | Cash | 111 | 4,428 | |||
Sales | 411 | 4,428 | ||||
(Record cash sales on january21-31) | ||||||
31 | Miscellaneous Expenses | 631 | 53 | |||
Cash | 111 | 53 | ||||
(Paid to Mr. M CK.NO.6986) | ||||||
31 | Salary Expenses | 621 | 6,200 | |||
Employees' Federal Income Tax Payable | 216 | 872 | ||||
FICA Social Security Tax Payable | 217 | 384.4 | ||||
FICA Medicare Tax Payable | 218 | 89.9 | ||||
Salaries Payable | 215 | 4,854 | ||||
(Record the salaries for the month) | ||||||
31 | Payroll Tax Expense | 622 | 846.3 | |||
FICA Social Security Tax Payable | 217 | 384.4 | ||||
FICA Medicare Tax Payable | 218 | 89.9 | ||||
State Unemployment Tax Payable | 219 334.80 | 334.8 | ||||
Federal Unemployment Tax Payable | 220 | 220 | ||||
(Record the employer’s share of FICA taxes and employer's state and federal unemployment taxes for the month) | ||||||
31 | Salaries Payable | 215 | 4,853.70 | |||
Cash | 111 | 4,853.70 | ||||
(Record the payroll, Ck.No.6987) | ||||||
31 | Mr. H, Drawing | 312 | 1,000 | |||
Cash | 111 | 1,000 | ||||
(Record the withdrawal for personal use,Ck.No.6988) |
Table (1)
2.
Record the entries from customer accounts to the accounts receivable ledger.
Explanation of Solution
Account receivable: The amount of money to be received by a company for the sale of goods and services to the customers is referred to as account receivable.
T-account: The condensed form of a ledger is referred to as T-account. The left-hand side of this account is known as debit, and the right hand side is known as credit.
Entries from customer accounts to the accounts receivable ledger:
Accounts receivable ledger | ||||||
Name: B company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
Jan | 29 | 3 | 1,835 | 1,835 | ||
Name: E and C company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
Jan | 7 | 2 | 787 | 787 | ||
Name: L company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
Jan | 4 | 1 | 850 | 850 | ||
9 | 2 | 54 | 796 | |||
Name: P company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
Jan | 1 | Balance | 650 | |||
6 | 1 | 650 | 0 | |||
Name: V company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
Jan | 1 | Balance | 1,000 | |||
4 | 1 | 1,000 | 0 | |||
14 | 2 | 2,050 | 2,050 |
Table (2)
3.
Record the entries from customer accounts to the accounts payable ledger.
Explanation of Solution
Account payable: The amount of money to be paid by a company for the purchase of goods and services from the seller is referred to as account payable.
Entries from customer accounts to the accounts payable ledger:
Accounts payable ledger | ||||||
Name: C company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
Jan | 18 | 2 | 5,001 | 5,001 | ||
23 | 3 | 376 | 4,625 | |||
Name: D company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
Jan | 7 | 1 | 108 | 108 | ||
Name: F and sons | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
Jan | 1 | Balance | 600 | |||
7 | 1 | 600 | 0 | |||
Name: V company | ||||||
Address: | ||||||
Date | Items | Post ref. | Debit ($) | Credit ($) | Balance ($) | |
20-- | ||||||
Jan | 4 | 1 | 2,930 | 2,930 | ||
11 | 2 | 2,930 | 0 |
Table (3)
4.
Record the journal entries to the general ledger.
Explanation of Solution
General ledger: General ledger is a record of all accounts of assets, liabilities, and stockholders’ equity, necessary to prepare financial statements.
Journal entries to the general ledger:
Account: Cash | Account No:111 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 1 | Balance | 8,740 | |||||
2 | 1 | 775 | 7,965 | |||||
2 | 1 | 3,500 | 11,465 | |||||
4 | 1 | 980 | 12,445 | |||||
6 | 1 | 637 | 13,082 | |||||
7 | 1 | 588 | 12,494 | |||||
11 | 2 | 4,863.2 | 17,357.2 | |||||
11 | 2 | 2,871.4 | 14,485.8 | |||||
21 | 2 | 194 | 14,291.8 | |||||
21 | 2 | 4,591 | 18,882.8 | |||||
23 | 2 | 96 | 18,786.8 | |||||
31 | 3 | 4,428 | 23,214.8 | |||||
31 | 3 | 53 | 23,161.8 | |||||
31 | 3 | 4,853.7 | 18,308 | |||||
31 | 3 | 1,000 | 17,308.1 | |||||
Account: Accounts receivable | Account No:113 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 1 | Balance | 1,650 | |||||
4 | 1 | 1,000 | 650 | |||||
4 | 1 | 850.00 | 1,500 | |||||
6 | 1 | 650.00 | 850 | |||||
7 | 2 | 787 | 1,637 | |||||
9 | 2 | 54 | 1,583 | |||||
14 | 2 | 2,050 | 3,633 | |||||
29 | 3 | 1,835 | 5,468 | |||||
Account: Merchandise inventory | Account No:114 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 1 | Balance | 20,584 | |||||
Account: Suppliers | Account No:115 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 1 | Balance | 592 | |||||
7 | Purchase | 1 | 108 | 700 | ||||
Account: Prepaid insurance | Account No:116 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 1 | Balance | 390 | |||||
Account: Equipment | Account No:121 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 1 | Balance | 3,644 | |||||
Account: Accounts payable | Account No:212 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 1 | Balance | 600 | |||||
4 | 1 | 2,930 | 3,530 | |||||
7 | 1 | 600 | 2,930 | |||||
7 | 1 | 108 | 3,038 | |||||
11 | 2 | 2,930 | 108 | |||||
18 | 2 | 5,001 | 5,109 | |||||
23 | 3 | 376 | 4,733 | |||||
Account: Salaries payable | Account No:215 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 31 | 3 | 4,853.70 | 4,853.70 | ||||
31 | 3 | 4,853.70 | ||||||
Account: Employees federal income tax payable | Account No:216 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 31 | 3 | 872 | 872 | ||||
Account: FICA social security tax payable | Account No:217 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 31 | 3 | 384.4 | 384.4 | ||||
31 | 3 | 384.4 | 768.8 | |||||
Account: FICA Medicare payable | Account No:218 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 31 | 3 | 89.9 | 89.9 | ||||
31 | 3 | 89.9 | 179.8 | |||||
Account: State unemployment tax payable | Account No:219 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 31 | 3 | 334.8 | 334.8 | ||||
Account: Federal unemployment tax payable | Account No:220 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 31 | 3 | 37.2 | 37.2 | ||||
Account: Mr. H Capital | Account No:311 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 1 | 35,000 | ||||||
2 | 1 | 3,500 | 38,500 | |||||
Account: Mr. H Drawing | Account No:312 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 31 | 3 | 1,000 | 1,000 | ||||
Account: Sales | Account No:411 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 4 | 1 | 850 | 850 | ||||
7 | 2 | 787 | 1,637 | |||||
11 | 2 | 4,863.0 | 6,500.2 | |||||
14 | 2 | 2,050 | 8,550.2 | |||||
21 | 2 | 4,591 | 13,141.2 | |||||
29 | 3 | 1,835 | 14,976.2 | |||||
31 | 3 | 4,428 | 19,404.2 | |||||
Account: Sales return and allowance | Account No:412 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 9 | 2 | 54 | 54 | ||||
Account: Sales discounts | Account No:413 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 4 | 1 | 20 | 20 | ||||
6 | 1 | 13 | 33 | |||||
Account: Purchases | Account No:511 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 4 | 1 | 2,930 | 2,930 | ||||
18 | 2 | 4,854 | 7,784 | |||||
Account: Purchases returns and allowances | Account No:512 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 23 | 3 | 376 | 376 | ||||
Account: Purchase discounts | Account No:513 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 7 | 1 | 12 | 12 | ||||
11 | 2 | 58.6 | 58.6 | |||||
Account: Freight in | Account No:514 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 18 | 2 | 147 | 147 | ||||
23 | 2 | 96 | 243 | |||||
Account: Salary expense | Account No:621 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 31 | 3 | 6,200 | 6,200 | ||||
Account: Payroll tax expense | Account No:622 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 31 | 3 | 846.3 | 846.3 | ||||
Account: Rent expense | Account No:627 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 2 | 1 | 775 | 775 | ||||
Account: Miscellaneous expense | Account No:631 | |||||||
Date | Item | Post ref | Debit | Credit | Balance | |||
20___ | ($) | ($) | Debit ($) | Credit($) | ||||
Jan | 21 | 2 | 194 | 194 | ||||
31 | 3 | 53 | 247 |
Table (4)
5.
Prepare a trial balance of H Company.
Explanation of Solution
Trial balance: Trial balance is a summary of all the ledger accounts balances presented in a tabular form with two column, debit and credit. It checks the mathematical accuracy of the ledger postings and helps preparing the final accounts.
Prepare a trial balance.
H company | |||||
Trail balance | |||||
January 31, 20__ | |||||
Account name | Debit ($) | Credit($) | |||
Cash | 17,308.10 | ||||
Accounts receivable | 5,468 | ||||
Merchandise inventory | 20,584 | ||||
Supplies | 700 | ||||
Prepaid insurance | 390 | ||||
Equipment | 3,644 | ||||
Accounts payable | 4,733 | ||||
Employee's federal income tax payable | 872 | ||||
FICA social security tax payable | 768.8 | ||||
FICA Medicare tax payable | 179.8 | ||||
State unemployment tax payable | 334.8 | ||||
Federal unemployment tax payable | 37.2 | ||||
Mr. J capital | 38,500 | ||||
Mr. J drawings | 1,000 | ||||
Sales | 19,404.2 | ||||
Sales returns and allowances | 54 | ||||
Sales discounts | 33 | ||||
Purchases | 7,784 | ||||
Purchases returns and allowances | 376 | ||||
Purchases discounts | 70.6 | ||||
Freight in | 243 | ||||
Salary expense | 6,200 | ||||
Payroll tax expense | 846.3 | ||||
Rent expense | 775 | ||||
Miscellaneous expense | 247 | ||||
65,276.40 | 65,276.40 |
Table (5)
6.
Prepare a schedule of accounts receivable and accounts payable.
Explanation of Solution
Schedule of accounts receivable:
H company | |
Schedule of Accounts Receivable | |
January 31, 20__ | |
Particulars | Amount($) |
B company | 1,835 |
E and C company | 787 |
L company | 796 |
V company | 2,050 |
Total accounts receivable | $5,468 |
Table (6)
Schedule of accounts payable
H company | |
Schedule of Accounts Payable | |
January 31, 20__ | |
Particulars | Amount($) |
C company | 4,625 |
D company | 108 |
Total accounts payable | $4,733 |
Table (7)
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- The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. Jan. 2Issued Ck. No. 6981 to JSS Management Company for monthly rent, 775. 2J. Hammond, the owner, invested an additional 3,500 in the business. 4Bought merchandise on account from Valencia and Company, invoice no. A691, 2,930; terms 2/10, n/30; dated January 2. 4Received check from Vega Appliance for 980 in payment of 1,000 invoice less discount. 4Sold merchandise on account to L. Paul, invoice no. 6483, 850. 6Received check from Petty, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Fischer and Son, in payment of invoice no. C1272 for 600 less discount. 7Bought supplies on account from Doyle Office Supply, invoice no. 1906B, 108; terms net 30 days. 7Sold merchandise on account to Ellison and Clay, invoice no. 6484, 787. 9Issued credit memo no. 43 to L. Paul, 54, for merchandise returned. 11Cash sales for January 1 through January 10, 4,863.20. 11Issued Ck. No. 6983, 2,871.40, to Valencia and Company, in payment of 2,930 invoice less discount. 14Sold merchandise on account to Vega Appliance, invoice no. 6485, 2,050. Jan. 18Bought merchandise on account from Costa Products, invoice no. 7281D, 4,854; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to the invoice, 147 (total 5,001). 21Issued Ck. No. 6984, 194, to M. Miller for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 4,591. 23Issued Ck. No. 6985 to Forbes Freight, 96, for freight charges on merchandise purchased on January 4. 23Received credit memo no. 163, 376, from Costa Products for merchandise returned. 29Sold merchandise on account to Bruce Supply, invoice no. 6486, 1,835. 31Cash sales for January 21 through January 31, 4,428. 31Issued Ck. No. 6986, 53, to M. Miller for miscellaneous expenses not recorded previously. 31Recorded payroll entry from the payroll register: total salaries, 6,200; employees federal income tax withheld, 872; FICA Social Security tax withheld, 384.40, FICA Medicare tax withheld, 89.90. 31Recorded the payroll taxes: Social Security tax, 384.40, FICA Medicare tax, 89.90; state unemployment tax, 334.80; federal unemployment tax, 37.20. 31Issued Ck. No. 6987, 4,853.70, for salaries for the month. 31J. Hammond, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 1. Record the transactions for January using a sales journal, page 73; a purchases journal, page 56; a cash receipts journal, page 38; a cash payments journal, page 45; and a general journal, page 100. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forwardThe following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. If you are using the form-based approach with QuickBooks or general ledger, select Cash Sales as the customer for all cash sales transactions. Required 1. Record the transactions for January using a general journal, page 1. Assume the periodic inventory method is used. If using QuickBooks, record transactions using either the journal entry method or the forms-based approach as directed by your instructor. The chart of accounts is as follows: 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily the general journal entries to the general ledger. Write the owners name in the Capital and Drawing accounts. If using QuickBooks or general ledger, ignore Steps 2, 3, and 4. 5. Prepare a trial balance. 6. Prepare a schedule of accounts receivable (A/R Aging Detail report in QuickBooks) and a schedule of accounts payable (A/P Summary Detail report in QuickBooks). Do the totals equal the balances of the related controlling accounts?arrow_forwardThe following transactions were completed by Yang Restaurant Equipment during January, the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Yang Restaurant Equipment does not track cash sales by customer. If you are using the form-based approach with QuickBooks or general ledger, select Cash Sales as the customer for all cash sales transactions. Required 1. Record the transactions for January using a general journal, page 1. Assume the periodic inventory method is used. If using QuickBooks, record transactions using either the journal entry method or the forms-based approach, as directed by your instructor. The chart of accounts is as follows: 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily the general journal entries to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Prepare a trial balance. 6. Prepare a schedule of accounts receivable (A/R Aging Detail report in QuickBooks) and a schedule of accounts payable (A/P Aging Detail report in QuickBooks). Do the totals equal the balances of the related controlling accounts? If using QuickBooks or general ledger, ignore Steps 2, 3, and 4.arrow_forward
- The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. If you are using the form-based approach with QuickBooks or general ledger, select Cash Sales as the customer for all cash sales transactions. Required 1. Record the transactions for January using a sales journal, page 73; a purchases journal, page 56; a cash receipts journal, page 38; a cash payments journal, page 45; and a general journal, page 100. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals on scratch paper. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forwardThe following transactions were completed by Yang Restaurant Equipment during January, the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Yang Restaurant Equipment does not track cash sales by customer. If you are using the form-based approach with QuickBooks or general ledger, select Cash Sales as the customer for all cash sales transactions. Required 1. Record the transactions for January using a sales journal, page 91; a purchases journal, page 74; a cash receipts journal, page 56; a cash payments journal, page 63; and a general journal, page 119. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals on scratch paper. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forwardThe following transactions were completed by Yang Restaurant Equipment during January, the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Yang Restaurant Equipment does not track cash sales by customer. Jan. 2Issued Ck. No. 6981 to Tri-County Management Company for monthly rent, 850. 2L. Yang, the owner, invested an additional 4,500 in the business. 4Bought merchandise on account from Valentine and Company, invoice no. A694, 2,830; terms 2/10, n/30; dated January 2. 4Received check from Velez Appliance for 980 in payment of invoice for 1,000 less discount. 4Sold merchandise on account to L. Parrish, invoice no. 6483, 755. 6Received check from Peck, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Frost and Son, in payment of invoice no. C127 for 600 less discount. 7Bought supplies on account from Dudley Office Supply, invoice no. 190B, 93.54; terms net 30 days. 7Sold merchandise on account to Ewing and Charles, invoice no. 6484, 1,115. 9Issued credit memo no. 43 to L. Parrish, 47, for merchandise returned. 11Cash sales for January 1 through January 10, 4,454.87. 11Issued Ck. No. 6983, 2,773.40, to Valentine and Company, in payment of 2,830 invoice less discount. 14Sold merchandise on account to Velez Appliance, invoice no. 6485, 2,100. 14Received check from L. Parrish, 693.84, in payment of 755 invoice, less return of 47 and less discount. Jan. 19Bought merchandise on account from Crawford Products, invoice no. 7281, 3,700; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to invoice, 142 (total 3,842). 21Issued Ck. No. 6984, 245, to A. Bautista for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 3,689. 23Received credit memo no. 163, 87, from Crawford Products for merchandise returned. 29Sold merchandise on account to Bradford Supply, invoice no. 6486, 1,697.20. 29Issued Ck. No. 6985 to Western Freight, 64, for freight charges on merchandise purchased January 4. 31Cash sales for January 21 through January 31, 3,862. 31Issued Ck. No. 6986, 65, to M. Pineda for miscellaneous expenses not recorded previously. 31Recorded payroll entry from the payroll register: total salaries, 5,899.95; employees federal income tax withheld, 795; FICA Social Security tax withheld, 365.80, FICA Medicare tax withheld, 85.50. 31Recorded the payroll taxes: FICA Social Security tax, 365.80; FICA Medicare tax, 85.50; state unemployment tax, 318.60; federal unemployment tax, 35.40. 31Issued Ck. No. 6987, 4,653.65, for salaries for the month. 31L. Yang, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 1. Record the transactions in the general journal for January. If you are using Working Papers, start with page 1 in the journal. Assume the periodic inventory method is used. The chart of accounts is as follows: 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily the general journal entries to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Prepare a trial balance. 6. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forward
- On March 24, MS Companys Accounts Receivable consisted of the following customer balances: S. Burton 310 A. Tangier 240 J. Holmes 504 F. Fullman 110 P. Molty 90 During the following week, MS made a sale of 104 to Molty and collected cash on account of 207 from Burton and 360 from Holmes. Prepare a schedule of accounts receivable for MS at March 31, 20--.arrow_forwardThe following transactions were completed by Yang Restaurant Equipment during January, the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Yang Restaurant Equipment does not track cash sales by customer. Jan. 2Issued Ck. No. 6981 to Tri-County Management Company for monthly rent, 850. 2L. Yang, the owner, invested an additional 4,500 in the business. 4Bought merchandise on account from Valentine and Company, invoice no. A694, 2,830; terms 2/10, n/30; dated January 2. 4Received check from Velez Appliance for 980 in payment of invoice for 1,000 less discount. 4Sold merchandise on account to L. Parrish, invoice no. 6483, 755. 6Received check from Peck, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Frost and Son, in payment of invoice no. C127 for 600 less discount. 7Bought supplies on account from Dudley Office Supply, invoice no. 190B, 93.54; terms net 30 days. 7Sold merchandise on account to Ewing and Charles, invoice no. 6484, 1,115. 9Issued credit memo no. 43 to L. Parrish, 47, for merchandise returned. 11Cash sales for January 1 through January 10, 4,454.87. 11Issued Ck. No. 6983, 2,773.40, to Valentine and Company, in payment of 2,830 invoice less discount. 14Sold merchandise on account to Velez Appliance, invoice no. 6485, 2,100. 14Received check from L. Parrish, 693.84, in payment of 755 invoice, less return of 47 and less discount. Jan. 19Bought merchandise on account from Crawford Products, invoice no. 7281, 3,700; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to invoice, 142 (total 3,842). 21Issued Ck. No. 6984, 245, to A. Bautista for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 3,689. 23Received credit memo no. 163, 87, from Crawford Products for merchandise returned. 29Sold merchandise on account to Bradford Supply, invoice no. 6486, 1,697.20. 29Issued Ck. No. 6985 to Western Freight, 64, for freight charges on merchandise purchased January 4. 31Cash sales for January 21 through January 31, 3,862. 31Issued Ck. No. 6986, 65, to M. Pineda for miscellaneous expenses not recorded previously. 31Recorded payroll entry from the payroll register: total salaries, 5,899.95; employees federal income tax withheld, 795; FICA Social Security tax withheld, 365.80, FICA Medicare tax withheld, 85.50. 31Recorded the payroll taxes: FICA Social Security tax, 365.80; FICA Medicare tax, 85.50; state unemployment tax, 318.60; federal unemployment tax, 35.40. 31Issued Ck. No. 6987, 4,653.65, for salaries for the month. 31L. Yang, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 1. Record the transactions for January using a sales journal, page 91; a purchases journal, page 74; a cash receipts journal, page 56; a cash payments journal, page 63; and a general journal, page 119. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forwardReview the following transactions and prepare any necessary journal entries for Tolbert Enterprises. A. On April 7, Tolbert Enterprises contracts with a supplier to purchase 300 water bottles for their merchandise inventory, on credit, for $10 each. Credit terms are 2/10, n/60 from the invoice date of April 7. B. On April 15, Tolbert pays the amount due in cash to the supplier.arrow_forward
- Catherines Cookies has a beginning balance in the Accounts Payable control total account of $8,200. In the cash disbursements journal, the Accounts Payable column has total debits of $6,800 for November. The Accounts Payable credit column in the purchases journal reveals a total of $10,500 for the current month. Based on this information, what is the ending balance in the Accounts Payable account in the general ledger?arrow_forwardReview the following transactions and prepare any necessary journal entries for Lands Inc. A. On December 10, Lands Inc. contracts with a supplier to purchase 450 plants for its merchandise inventory, on credit, for $12.50 each. Credit terms are 4/15, n/30 from the invoice date of December 10. B. On December 28, Lands pays the amount due in cash to the supplier.arrow_forwardHappy Tails Inc. has a September 1, 20Y4, accounts payable balance of 620, which consists of 320 due Labradore Inc. and 300 due Meow Mart Inc. Transactions related to purchases and cash payments completed by Happy Tails Inc. during the month of September 20Y4 are as follows: a. Prepare a purchases journal and a cash payments journal to record these transactions. The forms of the journals are similar to those used in the text. Place a check mark () in the Post. Ref. column to indicate when the accounts payable subsidiary ledger should be posted. Happy Tails Inc. uses the following accounts: b. Prepare a listing of accounts payable creditor balances on September 30, 20Y4. Verify that the total of the accounts payable creditor balances equals the balance of the accounts payable controlling account on September 30, 20Y4. c. Why does Happy Tails Inc. use a subsidiary ledger for accounts payable?arrow_forward
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