Lasting Summer Inc. has $2,510 in the October 1 balance of the accounts receivable account consisting of $1,060 from Champion Co. and $1,450 from Wayfarer Co. Transactions related to revenue and cash receipts completed by Lasting Summer Inc. during the month of October 20Y5 are as follows:Oct. 3. Issued Invoice No. 622 for services provided to Palace Corp., $2,890.5. Received cash from Champion Co., on account, for $1,060.8. Issued Invoice No. 623 for services provided to Sunny Style Inc., $1,940.12. Received cash from Wayfarer Co., on account, for $1,450.18. Issued Invoice No. 624 for services provided to Amex Services Inc.,                 $2,970.23. Received cash from Palace Corp. for Invoice No. 622 of October 3.28. Issued Invoice No. 625 to Wayfarer Co., on account, for $900.30. Received cash from Rogers Co. for services provided, $120.a. Prepare a single-column revenue journal and a cash receipts journal to record these transactions. Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. Place a check mark (✓) in the Post.Ref. column to indicate when the accounts receivable subsidiary ledger should be posted.b. Prepare a listing of the accounts receivable customer balances and verify that the total of the accounts receivable customer balances equals the balance of the accounts receivable controlling account on October 31,     20Y5.c. Why does Lasting Summer Inc. use a subsidiary ledger for accounts receivable?

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Asked Dec 9, 2019
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Lasting Summer Inc. has $2,510 in the October 1 balance of the accounts receivable account consisting of $1,060 from Champion Co. and $1,450 from Wayfarer Co. Transactions related to revenue and cash receipts completed by Lasting Summer Inc. during the month of October 20Y5 are as follows:
Oct. 3. Issued Invoice No. 622 for services provided to Palace Corp., $2,890.
5. Received cash from Champion Co., on account, for $1,060.
8. Issued Invoice No. 623 for services provided to Sunny Style Inc., $1,940.
12. Received cash from Wayfarer Co., on account, for $1,450.
18. Issued Invoice No. 624 for services provided to Amex Services Inc.,                 $2,970.
23. Received cash from Palace Corp. for Invoice No. 622 of October 3.
28. Issued Invoice No. 625 to Wayfarer Co., on account, for $900.
30. Received cash from Rogers Co. for services provided, $120.
a. Prepare a single-column revenue journal and a cash receipts journal to record these transactions. Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. Place a check mark (✓) in the Post.
Ref. column to indicate when the accounts receivable subsidiary ledger should be posted.
b. Prepare a listing of the accounts receivable customer balances and verify that the total of the accounts receivable customer balances equals the balance of the accounts receivable controlling account on October 31,     20Y5.
c. Why does Lasting Summer Inc. use a subsidiary ledger for accounts receivable?

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Expert Answer

Step 1

(a)

Prepare a single column revenue journal and a cash receipts journal of L Summer Incorporation.

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Revenue journal Invoice Post Account receivable Dr. Account debited Date No. Ref. Fees earned Cr. ($) 20Y5 2,890 1,940 2,970 900 P Corporation S Style Incorporation A Service Incorporation W Corporation 622 Oc. 3 623 18 624 28 625 31 S8,700 Cash receipt journal Accounts earned receivable Cr. Fees Post Cash Date Account Credited Ref. Dr. Cr. 20Y5 5 C Corporation 12 W Corporation 23 P Corporation 30 Fees eamed 1,060 Ot. 1,060 1,450 2,890 1,450 2,890 120 120 5,520 120 31 5.400

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Step 2

(b)

Prepare accounts receivable customers balance, and verify that the total ag...

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L Summer Incorporation Accounts receivable customer balances October 31, 20Y5 Amount (S) A Service Incorporation S Style Incorporation W Corporation 2,970 1,940 900 Total accounts receivable 5.810 L Summer Incorporation Accounts receivable (Controlling account) October 31, 20Y5 Amount (S) Opening balance on Oct 1, 20Y5 ($1,060 + $1,450) 2,510 Add: 8,700 11,210 Total debits (from revenue joumal) Less: Total credits (from cash receipts joumal) (5,400) 5,810 Total accounts receivable

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