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All Textbook Solutions for College Accounting, Chapters 1-27

SERIES B EXERCISE CLASSIFYING BUSINESS TRANSACTIONS Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. Classify each transaction as an operating, an investing, or a financing activity. (a) Invested cash in the business, 5,000. (b) Purchased office equipment. Paid 2,500 cash and agreed to pay the balance of 2,000 in four monthly installments. (c) Paid office rent, 400. (d) Received cash for services rendered, 700. (e) Paid phone bill, 95. (f) Received cash for services rendered, 600. (g) Made payment on loan in transaction (b), 500. (h) Paid wages to part-time employee, 800. (i) Paid electricity bill, 100. (j) Withdrew cash for personal use, 500. (k) Paid wages to part-time employee, 600. SERIES B PROBLEM PREPARING A STATEMENT OF CASH FLOWS Prepare a statement of cash flows based on the transactions reported in Exercise 6Apx-1B.COMPREHENSIVE PROBLEM 1: The Accounting Cycle Bob Night opened The Generals Favorite Fishing Hole. The fishing camp is open from April through September and attracts many famous college basketball coaches during the off-season. Guests typically register for one week, arriving on Sunday afternoon and returning home the following Saturday afternoon. The registration fee includes room and board, the use of fishing boats, and professional instruction in fishing techniques. The chart of accounts for the camping operations is provided below. The Generals Favorite Fishing Hole Chart of Accounts Assets Revenues 101 Cash 401 Registration Fees 142 Office Supplies 14 Food Supplies Expenses 145 Prepaid Insurance 511 Wages Expense 181 Fishing Boats 521 Rent Expense 181.1 Accum. Depr.Fishing Boats 523 Office Supplies Expense 524 Food Supplies Expense Liabilities 525 Phone Expense 202 Accounts Payable 533 Utilities Expense 219 Wages Payable 535 Insurance Expense 536 Postage Expense Owners Equity 542 Depr. Exp.Fishing Boats 311 Bob Night, Capital 312 Bob Night, Drawing 313 Income Summary The following transactions took place during April 20--. Apr. 1 Night invested cash in business, 90,000. 1 Paid insurance premium for six-month camping season, 9,000. 2 Paid rent for lodge and campgrounds for the month of April, 40,000. 2 Deposited registration fees, 35,000. 2 Purchased 10 fishing boats on account for 60,000. The boats have estimated useful lives of five years, at which time they will be donated to a local day camp. Arrangements were made to pay for the boats in July. 3 Purchased food supplies from Acme Super Market on account, 7,000. 5 Purchased office supplies from Gordon Office Supplies on account, 500. 7 Deposited registration fees, 38,600. 10 Purchased food supplies from Acme Super Market on account, 8,200. 10 Paid wages to fishing guides, 10,000. 14 Deposited registration fees, 30,500. Apr. 16 Purchased food supplies from Acme Super Market on account, 9,000. 17 Paid wages to fishing guides, 10,000. 18 Paid postage, 150. 21 Deposited registration fees, 35,600. 24 Purchased food supplies from Acme Super Market on account, 8,500. 24 Paid wages to fishing guides, 10,000. 28 Deposited registration fees, 32,000. 29 Paid wages to fishing guides, 10,000. 30 Purchased food supplies from Acme Super Market on account, 6,000. 30 Paid Acme Super Market on account, 32,700. 30 Paid utilities bill, 2,000. 30 Paid phone bill, 1,200. 30 Bob Night withdrew cash for personal use, 6,000. Adjustment information for the end of April is provided below. (a) Office supplies remaining on hand, 100. (b) Food supplies remaining on hand, 8,000. (c) Insurance expired during the month of April, 1,500. (d) Depreciation on the fishing boats for the month of April, 1,000. (e) Wages earned, but not yet paid, at the end of April, 500. REQUIRED 1. Enter the transactions in a general journal. Enter transactions from April 15 on page 1, April 718 on page 2, April 2129 and the first two entries for April 30 on page 3, and the remaining entries for April 30 on page 4. 2. Post the entries to the general ledger. (If you are not using the working papers that accompany this text, you will need to enter the account titles and account numbers in the general ledger accounts.) 3. Prepare a trial balance on a work sheet. 4. Complete the work sheet. 5. Journalize the adjusting entries (page 5). 6. Post the adjusting entries to the general ledger. 7. Prepare the income statement. 8. Prepare the statement of owners equity. 9. Prepare the balance sheet. 10. Journalize the closing entries (pages 5 and 6). 11. Post the closing entries to the general ledger. 12. Prepare a post-closing trial balance.COMPREHENSIVE PROBLEM 1, PERIOD 2: The Accounting Cycle During the month of May 20--, The Generals Favorite Fishing Hole engaged in the following transactions. These transactions required an expansion of the chart of accounts as shown below. Assets Revenues 101 Cash 401 Registration Fees 122 Accounts Receivable 404 Vending Commission Revenue 142 Office Supplies 144 Food Supplies Expenses 145 Prepaid Insurance 511 Wages Expense 146 Prepaid Subscriptions 512 Advertising Expense 161 Land 521 Rent Expense 171 Buildings 523 Office Supplies Expense 171.1 Accum. Depr.Buildings 524 Food Supplies Expense 181 Fishing Boats 525 Phone Expense 181.1 Accum. Depr.Fishing Boats 533 Utilities Expense 182 Surround Sound System 535 Insurance Expense 182.1 Accum. Depr.Surround Sound Sys. 536 Postage Expense 183 Big Screen TV 537 Repair Expense 183.1 Accum. Depr.Big Screen TV 540 Depr. Exp.Buildings 541 Depr. Exp.Surround Sound Sys. Liabilities 202 Accounts Payable 542 Depr. Exp.Fishing Boats 219 Wages Payable 543 Depr. Exp.Big Screen TV 546 Satellite Programming Exp. Owners Equity 548 Subscriptions Expense 311 Bob Night, Capital 312 Bob Night, Drawing 313 Income Summary May 1 In order to provide snacks for guests on a 24-hour basis, Night signed a contract with Snack Attack. Snack Attack will install vending machines with food and drinks and pay a 10% commission on all sales. Estimated payments are made at the beginning of each month. Night received a check for 200, the estimated commission on sales for May. 2 Night purchased a surround sound system and big screen TV with a digital satellite system for the guest lounge. The surround sound system cost 3,600 and has an estimated useful life of five years and no salvage value. The TV cost 8,000, has an estimated useful life of eight years, and has a salvage value of 800. Night paid cash for both items. 2 Paid for Mays programming on the new digital satellite system, 125. May 3 Nights office manager returned 100 worth of office supplies to Gordon Office Supply. Night received a 100 reduction on the account. 3 Deposited registration fees, 52,700. 3 Paid rent for lodge and campgrounds for the month of May, 40,000. 3 In preparation for the purchase of a nearby campground, Night invested an additional 600,000. 4 Paid Gordon Office Supply on account, 400. 4 Purchased the assets of a competing business and paid cash for the following: land, 100,000; lodge, 530,000; and fishing boats, 9,000. The lodge has a remaining useful life of 50 years and a 50,000 salvage value. The boats have remaining lives of five years and no salvage value. 5 Paid Mays insurance premium for the new camp, 1,000. (See above transaction.) 5 Purchased food supplies from Acme Super Market on account, 22,950. 5 Purchased office supplies from Gordon Office Supplies on account, 1,200. 7 Night paid 40 each for one-year subscriptions to Fishing Illustrated, Fishing Unlimited, and Fish Master. The magazines are published monthly. 10 Deposited registration fees, 62,750. 13 Paid wages to fishing guides, 30,000. (Dont forget wages payable from prior month.) 14 A guest became ill and was unable to stay for the entire week. A refund was issued in the amount of 1,000. 17 Deposited registration fees, 63,000. 19 Purchased food supplies from Acme Super Market on account, 18,400. 21 Deposited registration fees, 63,400. 23 Paid 2,500 for Mays advertising spots on National Sports Talk Radio. 25 Paid repair fee for damaged boat, 850. 27 Paid wages to fishing guides, 30,000. 28 Paid 1,800 for Mays advertising spots on billboards. 29 Purchased food supplies from Acme Super Market on account, 14,325. 30 Paid utilities bill, 3,300. 30 Paid phone bill, 1,800. 30 Paid Acme Super Market on account, 47,350. 31 Bob Night withdrew cash for personal use, 7,500. Adjustment information at the end of May is provided below. (a) Total vending machine sales were 2,300 for the month of May. A 10% commission is earned on these sales. (b) Straight-line depreciation is used for the 10 boats purchased on April 2 for 60,000. The useful life for these assets is five years and there is no salvage value. A full months depreciation was taken in April on these boats. Straight-line depreciation is also used for the two boats purchased in May. Make one adjusting entry for all depreciation on the boats. (c) Straight-line depreciation is used to depreciate the surround sound system. (d) Straight-line depreciation is used to depreciate the big screen TV. (e) Straight-line depreciation is used for the building purchased in May. (f) On April 2, Night paid 9,000 for insurance during the six-month camping season. Mays portion of this premium was used up during this month. (g) Night received his May issues of Fishing Illustrated, Fishing Unlimited, and Fish Master. (h) Office supplies remaining on hand, 150. (i) Food supplies remaining on hand, 5,925. (j) Wages earned, but not yet paid, at the end of May, 6,000. REQUIRED 1. Enter the transactions in a general journal. Enter transactions from May 14 on page 7, May 528 on page 8, and the remaining entries on page 9. To save time and space, dont enter descriptions for the journal entries. 2. Post the entries to the general ledger. (If you are not using the working papers that accompany this text, you will need to enter the account titles, account numbers, and balances from April 30 in the general ledger accounts.) 3. Prepare a trial balance on a work sheet. 4. Complete the work sheet. 5. Journalize the adjusting entries on page 10 of the general journal. 6. Post the adjusting entries to the general ledger. 7. Prepare the income statement. 8. Prepare the statement of owners equity. 9. Prepare the balance sheet. 10. Journalize the closing entries on page 11 of the general journal. 11. Post the closing entries to the general ledger. 12. Prepare a post-closing trial balance.1TF 2TF 3TF 4TF 5TF 1MC 2MC 3MC 4MC When the cash short and over account has a debit balance at the end of the month, it is considered (a) an expense. (b) an asset. (c) revenue. (d) a liability.Match the following words with their definitions by entering the correct number in the spaces below. 1.deposit ticket 2.ATM 3.check 4.bank statement 5.blank endorsement _____ a.A document ordering a bank to pay cash from a depositors account. _____ b.An endorsement where the payee simply signs the back of the check, making the check payable to any bearer. _____ c.Automated teller machinea machine used by depositors to make withdrawals or deposits at any time. _____ d.A statement of account issued by a bank to each depositor once a month. _____ e.A form showing a detailed listing of items being deposited.2CE 3CE 4CE Why must a signature card be filled out and signed to open a checking account?2RQ 3RQ 4RQ What are the most common reasons for differences between the book and bank cash balances?6RQ 7RQ Name five common uses of electronic funds transfer.9RQ What should be prepared every time a petty cash payment is made?At what two times should the petty cash fund be replenished?12RQ At what two times would an entry be made affecting the change fund?What does a debit balance in the cash short and over account represent? What does a credit balance in this account represent?CHECKING ACCOUNT TERMS Match the following words with their definitions:2SEA 3SEA 4SEA 5SEA 6SEA CASH SHORT AND OVER ENTRIES Based on the following information, prepare the weekly entries for cash receipts from service fees and cash short and over. A change fund of 100 is maintained.8SPA 9SPA 10SPA 11SPA CHECKING ACCOUNT TERMS Match the following words with their definitions:2SEB 3SEB 4SEB 5SEB 6SEB CASH SHORT AND OVER ENTRIES Based on the following information, prepare the weekly entries for cash receipts from service fees and cash short and over. A change fund of 100 is maintained.8SPB 9SPB 10SPB CASH SHORT AND OVER ENTRIES Listed below are the weekly cash register tape amounts for service fees and the related cash counts during the month of July. A change fund of 200 is maintained. Required 1. Prepare the journal entries to record the cash service fees and cash short and over for each of the five weeks. 2. Post to the cash short and over account (use Account No. 516). 3. Determine the ending balance of the cash short and over account. Does it represent an expense or revenue?1MYW 1MP 1CP 1RQ 2RQ 3RQ 4RQ 5RQ 6RQ 7RQ 8RQ 9RQ 1SEA 2SEA 3SEA 4SPA 1SEB 2SEB 3SEB 4SPB 1TF 2TF 3TF 4TF A payroll register is a multi-column form used to assemble the data required at the end of each payroll period.1MC 2MC 3MC 4MC Social Security Tax Payable and Medicare Tax Payable are classified as (a) liabilities. (b) assets. (c) owners equity. (d) expenses.1CE 2CE 1RQ 2RQ Identify the four factors that determine the amount of federal income tax that is withheld from an employees pay each pay period.4RQ 5RQ 6RQ 7RQ 8RQ 9RQ 10RQ 1SEA COMPUTING OVERTI ME RATE OF PAY AND GROSS WEEKLY PAY Rebecca Huang receives a regular salary of 2,600 a month and is paid 1 times the regular hourly rate for hours worked in excess of 40 per week. (a) Calculate Huangs overtime rate of pay. (b) Calculate Huangs total gross weekly pay if she works 45 hours during the week.3SEA CALCUL ATING SOCIAL SECURITY AND MEDICARE TAXES Assume a Social Security tax rate of 6.2% is applied to maximum earnings of 128,400 and a Medicare tax rate of 1.45% is applied to all earnings. Calculate the Social Security and Medicare taxes for the following situations:5SEA JOURNALIZING PAYROLL TRANSACTIONS On December 31, the payroll register of Hamstreet Associates indicated the following information: Determine the amount of Social Security and Medicare taxes to be withheld and record the journal entry for the payroll, crediting Cash for the net pay.PAYROLL JOURNAL ENTRY Journalize the following data taken from the payroll register of Copy Masters as of April 15, 20:8SPA PAYROLL REGISTER AND PAYROLL JOURNAL ENTRY Mary Losch operates a travel agency called Marys Luxury Travel. She has five employees, all of whom are paid on a weekly basis. The travel agency uses a payroll register, individual employee earnings records, and a general journal. Marys Luxury Travel uses a weekly federal income tax withholding table like the one in Figure 8-4 on pages 288 and 289. The payroll data for each employee for the week ended March 22, 20, are given below. Employees are paid 1 times the regular rate for working over 40 hours a week. Social Security tax is withheld from the first 128,400 of earnings at the rate of 6.2%. Medicare tax is withheld at the rate of 1.45%, and city earnings tax at the rate of 1%, both applied to gross pay. Bacon and Leung have 15 withheld and Cole and Hicks have 10 withheld for health insurance. Bacon and Leung have 20 withheld to be invested in the travel agencys credit union. Cole has 38.75 withheld and Hicks has 18.75 withheld under a savings bond purchase plan. Marys Luxury Travels payroll is met by drawing checks on its regular bank account. The checks were issued in sequence, beginning with Check No. 423. Required 1. Prepare a payroll register for Marys Luxury Travel for the week ended March 22, 20--. (In the Taxable Earnings/Unemployment Compensation column, enter the same amounts as in the Social Security column.) Total the amount columns, verify the totals, and rule with single and double lines. 2. Assuming that the wages for the week ended March 22 were paid on March 24, prepare the journal entry for the payment of the payroll.EMPLOYEE EARNINGS RECORD Marys Luxury Travel in Problem 8-9A keeps employee earnings records. Andrew Cole, employee number 62, is employed as a manager in the ticket sales department. He was born on May 8, 1986, and was hired on June 1 of last year. His Social Security number is 544-67-1283. He lives at 28 Quarry Drive, Vernon, CT, 06066. REQUIRED For the week ended March 22, complete an employee earnings record for Andrew Cole. (Insert earnings data only for the week of March 22.)COMPUTING WEEKLY GROSS PAY Manuel Sotos regular hourly rate is 12. He receives 1 times the regular rate for hours worked in excess of 40 a week and double the rate for work on Sunday. During the past week, Soto worked 8 hours each day Monday through Thursday, 11 hours on Friday, and 6 hours on Sunday. Compute Sotos gross pay for the past week.2SEB 3SEB CALCULATING SOCIAL SECURITY AND MEDICARE TAXES Assume a Social Security tax rate of 6.2% is applied to maximum earnings of 128,400 and a Medicare tax rate of 1.45% is applied to all earnings. Calculate the Social Security and Medicare taxes for the following situations:5SEB JOURNALIZING PAYROLL TRANSACTIONS On November 30, the payroll register of Webster Smith indicated the following information: Determine the amount of Social Security and Medicare taxes to be withheld and record the journal entry for the payroll, crediting Cash for the net pay.PAYROLL JOURN AL ENTRY Journalize the following data taken from the payroll register of Himes Bakery as of June 12, 20--:8SPB 9SPB 10SPB 1MYW 1EC 1MP 1CP 1TF 2TF 3TF 4TF The W-4, which shows total annual earnings and deductions for federal and state income taxes, must be completed by the employer and given to the employee by January 31.1MC 2MC 3MC 4MC 5MC Total earnings for the employees of Garys Grill for the week ended January 14, 20--, were 6,400. The following payroll taxes were levied on these earnings: Social Security 6.2% Medicare 1.45% FUTA 0.6% SUTA 5.4% Calculate Garys payroll taxes expense for the week ended January 14, 20--.2CE 3CE 4CE 1RQ 2RQ 3RQ 4RQ 5RQ Identify all items that are debited or credited to Social Security Tax Payable and to Medicare Tax Payable.7RQ 8RQ 9RQ 10RQ 11RQ 12RQ 13RQ CALCULATION AND JOURNAL ENTRY FOR EMPLOYER PAYROLL TAXES Portions of the payroll register for Barneys Bagels for the week ended July 15 are shown below. The SUTA tax rate is 5.4%, and the FUTA tax rate is 0.6%, both of which are levied on the first 7,000 of earnings. The Social Security tax rate is 6.2% on the first 128,400 of earnings. The Medicare rate is 1.45% on gross earnings. Calculate the employers payroll taxes expense and prepare the journal entry to record the employers payroll taxes expense for the week ended July 15 of the current year.CALCULATION AND JOURNAL ENTRY FOR EMPLOYER PAYROLL TAXES Earnings for several employees for the week ended March 12, 20--, are as follows: Calculate the employers payroll taxes expense and prepare the journal entry as of March 12, 20--, assuming that FUTA tax is 0.6%, SUTA tax is 5.4%, Social Security tax is 6.2%, and Medicare tax is 1.45%.CALCULATION OF TAXABLE EARNINGS AND EMPLOYER PAYROLL TAXES AND PREPARATION OF JOURNAL ENTRY Selected information from the payroll register of Joanies Boutique for the week ended September 14, 20--, is as follows: Social Security tax is 6.2% on the first 128,400 of earnings for each employee. Medicare tax is 1.45% of gross earnings. FUTA tax is 0.6% and SUTA tax is 5.4% on the first 7,000 of earnings. Calculate the amount of taxable earnings for unemployment, Social Security, and Medicare taxes, and prepare the journal entry to record the employers payroll taxes as of September 14, 20--.4SEA JOURNAL ENTRIES FOR PAYMENT OF EMPLOYER PAYROLL TAXES Angel Ruiz owns a business called Ruiz Construction Co. He does his banking at Citizens National Bank in Portland, Oregon. The amounts in his general ledger for payroll taxes and the employees withholding of Social Security, Medicare, and federal income tax payable as of April 15 of the current year are as follows: Social Security tax payable (includes both employer and employee) 11,250 Medicare tax payable (includes both employer and employee) 2,625 FUTA tax payable 600 SUTA tax payable 4,050 Employee income tax payable 5,860 Journalize the quarterly payment of the employee federal income taxes and Social Security and Medicare taxes on April 15, 20--, and the payments of the FUTA and SUTA taxes on April 30, 20--.6SEA CALCULATING PAYROLL TAXES EXPENSE AND PREPARING JOURNAL ENTRY Selected information from the payroll register of Ebelings Dairy for the week ended July 7, 20--, is shown below. The SUTA tax rate is 5.4%, and the FUTA tax rate is 0.6%, both on the first 7,000 of earnings. Social Security tax on the employer is 6.2% on the first 128,400 of earnings, and Medicare tax is 1.45% on gross earnings. REQUIRED 1. Calculate the total employer payroll taxes for these employees. 2. Prepare the journal entry to record the employer payroll taxes as of July 7, 20--.JOURNALIZING AND POSTING PAYROLL ENTRIES Cascade Company has four employees. All are paid on a monthly basis. The fiscal year of the business is June 1 to May 31. The accounts kept by Cascade include the following: The following transactions relating to payrolls and payroll taxes occurred during June and July: REQUIRED 1. Journalize the preceding transactions using a general journal. 2. Open T accounts for the payroll expenses and liabilities. Enter the beginning balances and post the transactions recorded in the journal.9SPA CALCULATION AND JOURNAL ENTRY FOR EMPLOYER PAYROLL TAXES Portions of the payroll register for Kathys Cupcakes for the week ended June 21 are shown below. The SUTA tax rate is 5.4%, and the FUTA tax rate is 0.6%, both on the first 7,000 of earnings. The Social Security tax rate is 6.2% on the first 128,400 of earnings. The Medicare rate is 1.45% on gross earnings. Calculate the employers payroll taxes expense and prepare the journal entry to record the employers payroll taxes expense for the week ended June 21 of the current year.2SEB 3SEB TOTAL COST OF EMPLOYEE B. F. Goodson employs Eduardo Gonzales at a salary of 46,000 a year. Goodson is subject to employer Social Security taxes at a rate of 6.2% and Medicare taxes at a rate of 1.45% on Gonzaless salary. In addition, Goodson must pay SUTA tax at a rate of 5.4% and FUTA tax at a rate of 0.6% on the first 7,000 of Gonzaless salary. Compute the total cost to Goodson of employing Gonzales for the year.JOURNAL ENTRIES FOR PAYMENT OF EMPLOYER PAYROLL TAXES Francis Baker owns a business called Baker Construction Co. She does her banking at the American National Bank in Seattle, Washington. The amounts in her general ledger for payroll taxes and employees withholding of Social Security, Medicare, and federal income tax payable as of July 15 of the current year are as follows: Social Security tax payable (includes both employer and employee) 9,563 Medicare tax payable (includes both employer and employee) 2,250 FUTA tax payable 504 SUTA tax payable 3,402 Employee federal income tax payable 5,260 Journalize the quarterly payment of the employee federal income taxes and Social Security and Medicare taxes on July 15, 20--, and the payments of the FUTA and SUTA taxes on July 31, 20--.SUTA taxes on July 31, 20--. WORKERS COMPENSATION INSURANCE AND ADJUSTMENT Columbia Industries estimated that its total payroll for the coming year would be 385,000. The workers compensation insurance premium rate is 0.2%. REQUIRED 1. Calculate the estimated workers compensation insurance premium and prepare the journal entry for the payment as of January 2, 20--. 2. Assume that Columbia Industries actual payroll for the year is 396,000. Calculate the total insurance premium owed and prepare a journal entry as of December 31, 20--, to record the adjustment for the underpayment. The actual payment of the additional premium will take place in January of the next year.7SPB JOURNALIZING AND POSTING PAYROLL ENTRIES Oxford Company has five employees. All are paid on a monthly basis. The fiscal year of the business is June 1 to May 31. The accounts kept by Oxford Company include the following: The following transactions relating to payrolls and payroll taxes occurred during June and July: REQUIRED 1. Journalize the preceding transactions using a general journal. 2. Open T accounts for the payroll expenses and liabilities. Enter the beginning balances and post the transactions recorded in the journal.9SPB The director of the art department at an advertising company, Wilson Watson, wants to hire new office staff. His boss tells him that to do so he must find in his budget not only the base salary for this position but an additional 30% for fringe benefits. Wilson explodes: How in the world can there be 30% in fringe benefits? Write a memo to Wilson Watson explaining the costs that probably make up these fringe benefits.1EC The totals line from Nix Companys payroll register for the week ended March 31, 20--, is as follows: Payroll taxes are imposed as follows: Social Security tax, 6.2%; Medicare tax, 1.45%; FUTA tax, 0.6%; and SUTA tax, 5.4%. REQUIRED 1. a. Prepare the journal entry for payment of this payroll on March 31, 20--. b. Prepare the journal entry for the employers payroll taxes for the period ended March 31, 20--. 2. Nix Company had the following balances in its general ledger before the entries for requirement (1) were made: Employee federal income tax payable 2,500 Social Security tax payable 2,008 Medicare tax payable 470 FUTA tax payable 520 SUTA tax payable 4,510 a. Prepare the journal entry for payment of the liabilities for federal income taxes and Social Security and Medicare taxes on April 15, 20--. b. Prepare the journal entry for payment of the liability for FUTA tax on April 30, 20--. c. Prepare the journal entry for payment of the liability for SUTA tax on April 30, 20--. 3. Nix Company paid a premium of 420 for workers compensation insurance based on the estimated payroll as of the beginning of the year. Based on actual payroll as of the end of the year, the premium is only 400. Prepare the adjusting entry to reflect the overpayment of the insurance premium at the end of the year (December 31, 20--).1CP 1TF All sales, for cash or on credit, can be recorded in the general journal.Sales Tax Payable is a liability account that is credited for the amount of tax imposed on sales.4TF 5TF A credit sale of 250 plus a 6% sales tax would require a debit to Accounts Receivable of (a) 15. (b) 280. (c) 30. (d) 265.When 25 of merchandise is returned for a credit on account, what is the amount of the credit to Accounts Receivable, assuming a 6% sales tax rate? (a) 1.50 (b) 25.00 (c) 26.50 (d) 31.00 3MC 4MC 5MC 1CE Prepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is sold on account for 300 plus 3% sales tax, with 2/10, n/30 cash discount terms. (b) Part of the merchandise sold in transaction (a) for 70 plus sales tax is returned for credit. (c) The balance on account for the merchandise sold in transaction (a) is paid in cash within the discount period.3CE 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--.1RQ What is the purpose of a credit memo?3RQ 4RQ 5RQ 6RQ What steps are followed in posting cash receipts from the general journal to the general ledger?What steps are followed in posting cash receipts from the general journal to the accounts receivable ledger?9RQ 1SEA SALES TRANSACTIONS AND T ACCOUNTS Using T accounts for Cash, Accounts Receivable, Sales Tax Payable, Sales, Sales Returns and Allowances, and Sales Discounts, enter the following sales transactions. Use a new set of accounts for each part, 15. 1. No sales tax. (a) Merchandise is sold for 320 cash. (b) Merchandise is sold on account for 385. (c) Payment is received for merchandise sold on account. 2. 5% sales tax. (a) Merchandise is sold for 320 cash plus sales tax. (b) Merchandise is sold on account for 385 plus sales tax. (c) Payment is received for merchandise sold on account. 3. Cash and credit sales, with returned merchandise. (a) Merchandise is sold for 340 cash. (b) 30 of merchandise sold for 340 is returned for refund. (c) Merchandise is sold on account for 280. (d) 25 of merchandise sold for 280 is returned for a credit. (e) Payment is received for balance owed on merchandise sold on account. 4. 5% sales tax, with returned merchandise. (a) Merchandise is sold on account for 400 plus sales tax. (b) Merchandise sold on account for 60 plus sales tax is returned for a credit. (c) Balance on account is received in cash. (d) Merchandise is sold for 260 cash plus sales tax. (e) 40 of merchandise sold for 260 cash plus sales tax is returned for a refund. 5. Sales on account, with 2/10, n/30 cash discount terms. (a) Merchandise is sold on account for 450. (b) The balance is paid within the discount period. (c) Merchandise is sold on account for 280. (d) The balance is paid after the discount period.3SEA SALES RETURNS AND ALLOWANCES ADJUSTMENT At the end of year 1, JCs estimates that 2,000 of the current years sales will be returned in year 2. Prepare the adjusting entry at the end of year 1 to record the estimated sales returns and allowances and customer refunds payable for this 2,000. Use accounts as illustrated in the chapter.5SEA JOURNALIZING SALES TRANSACTIONS Enter the following transactions in a general journal. Use a 6% sales tax rate. May1 Sold merchandise on account to J. Adams, 2,000 plus sales tax. Sale No. 488. 4 Sold merchandise on account to B. Clark, 1,800 plus sales tax. Sale No. 489. 8 Sold merchandise on account to A. Duck, 1,500 plus sales tax. Sale No. 490. 11 Sold merchandise on account to E. Hill, 1,950 plus sales tax. Sale No. 491.7SEA JOURNALIZING CASH RECEIPTS Enter the following transactions in a general journal:SCHEDULE OF ACCOUNTS RECEIVABLE From the accounts receivable ledger shown, prepare a schedule of accounts receivable for Pheng Co. as of August 31, 20--.SALES TRANSACTIONS J. K. Bijan owns a retail business and made the following sales on account during the month of August 20--. There is a 6% sales tax on all sales. REQUIRED 1. Record the transactions starting on page 15 of a general journal. 2. Post from the journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.11SPA SALES AND CASH RECEIPTS TRANSACTIONS Sourk Distributors is a retail business. The following sales, returns, and cash receipts occurred during March 20--. There is an 8% sales tax. Beginning general ledger account balances were Cash, 9,586; and Accounts Receivable, 1,016. Beginning customer account balances included Whitaker Group, 1,016. REQUIRED 1. Record the transactions starting on page 7 of a general journal. 2. Post from the journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.SCHEDULE OF ACCOUNTS RECEIVABLE Based on the information provided in Problem 10-12A, prepare a schedule of accounts receivable for Sourk Distributors as of March 31, 20--. Verify that the accounts receivable account balance in the general ledger agrees with the schedule of accounts receivable total.1SEB SALES TRANSACTIONS AND T ACCOUNTS Using T accounts for Cash, Accounts Receivable, Sales Tax Payable, Sales, Sales Returns and Allowances, and Sales Discounts, enter the following sales transactions. Use a new set of accounts for each part, 15. 1. No sales tax. (a) Merchandise is sold for 250 cash. (b) Merchandise is sold on account for 225. (c) Payment is received for merchandise sold on account. 2. 6% sales tax. (a) Merchandise is sold for 250 cash plus sales tax. (b) Merchandise is sold on account for 225 plus sales tax. (c) Payment is received for merchandise sold on account. 3. Cash and credit sales, with returned merchandise. (a) Merchandise is sold for 481 cash. (b) 18 of merchandise sold for 481 is returned for a refund. (c) Merchandise is sold on account for 388. (d) 24 of merchandise sold for 388 is returned for a credit. (e) Payment is received for balance owed on merchandise sold on account. 4. 6% sales tax, with returned merchandise. (a) Merchandise is sold on account for 480 plus sales tax. (b) Merchandise sold on account for 30 plus sales tax is returned. (c) The balance on the account is received in cash. (d) Merchandise is sold for 300 cash plus sales tax. (e) 30 of merchandise sold for 300 cash plus sales tax is returned for a refund. 5. Sales on account, with 2/10, n/30 cash discount terms. (a) Merchandise is sold on account for 280. (b) The balance is paid within the discount period. (c) Merchandise is sold on account for 203. (d) The balance is paid after the discount period.3SEB SALES RETURNS AND ALLOWANCES ADJUSTMENT At the end of year 1, MCs estimates that 2,400 of the current years sales will be returned in year 2. Prepare the adjusting entry at the end of year 1 to record the estimated sales returns and allowances and customer refunds payable for this 2,400. Use accounts as illustrated in the chapter.5SEB JOURNALIZING SALES TRANSACTIONS Enter the following transactions in a general journal. Use a 5% sales tax rate. Sept. 1 Sold merchandise on account to K. Smith, 1,800 plus sales tax. Sale No. 228. 3 Sold merchandise on account to J. Arnes, 3,100 plus sales tax. Sale No. 229. 5 Sold merchandise on account to M. Denison, 2,800 plus sales tax. Sale No. 230. 7 Sold merchandise on account to B. Marshall, 1,900 plus sales tax. Sale No. 231.JOURNALIZING SALES RETURNS AND ALLOWANCES Enter the following transactions starting on page 60 of a general journal and post them to the appropriate general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter. Beginning balance in Accounts Receivable is 3,900. Beginning balances in selected customer accounts are Adams, 850; Greene, 428; and Phillips, 1,018.JOURNALIZING CASH RECEIPTS Enter the following transactions in a general journal:SCHEDULE OF ACCOUNTS RECEIVABLE From the accounts receivable ledger shown, prepare a schedule of accounts receivable for Gelph Co. as of November 30, 20--.SALES TRANSACTIONS T. M. Maxwell owns a retail business and made the following sales on account during the month of July 20--. There is a 5% sales tax on all sales. REQUIRED 1. Record the transactions starting on page 15 of a general journal. 2. Post from the journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.CASH RECEIPTS TRANSACTIONS Color Florists, a retail business, had the following cash receipts during January 20--. The sales tax is 5%. REQUIRED 1. Record the transactions starting on page 20 of a general journal. 2. Post from the journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.SALES AND CASH RECEIPTS TRANSACTIONS Paul Jackson owns a retail business. The following sales, returns, and cash receipts are for April 20--. There is a 7% sales tax. REQUIRED 1. Record the transactions starring on page 7 of a general journal. 2. Post from the journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.SCHEDULE OF ACCOUNTS RECEIVABLE Based on the information provided in Problem 10-12B, prepare a schedule of accounts receivable for Paul Jackson as of April 30, 20--. Verify that the accounts receivable account balance in the general ledger agrees with the schedule of accounts receivable total.You and your spouse have separate charge accounts at a local department store. When you tried to use your card last week, you were told that you were over your credit limit. This puzzled you because you had paid the entire account balance several weeks ago. When the monthly statements arrived yesterday, the error was clear. The store had credited your payment to your spouses account. Your account was treated as over the limit, and the store charged you interest on the unpaid balance. You suspect that part of the problem is that you and your spouse use the same last name (Morales) and have similar first names (Carmen and Carmelo). Write a letter to the store requesting correction of your accounts and suggesting a way to identify your accounts so that this error does not happen again.1EC Geoff and Sandy Harland own and operate Wayward Kennel and Pet Supply. Their motto is, If your pet is not becoming to you, he should be coming to us. The Harlands maintain a sales tax payable account throughout the month to account for the 6% sales tax. They use a general journal, general ledger, and accounts receivable ledger. The following sales and cash collections took place during the month of September: Sept. 2Sold a fish aquarium on account to Ken Shank, 125 plus tax of 7.50, terms n/30. Sale No. 101. 3Sold dog food on account to Nancy Truelove, 68.25 plus tax of 4.10, terms n/30. Sale No. 102. 5Sold a bird cage on account to Jean Warkentin, 43.95 plus tax of 2.64, terms n/30. Sale No. 103. 8Cash sales for the week were 2,332.45 plus tax of 139.95. 10Received cash for boarding and grooming services, 625 plus tax of 37.50. 11Jean Warkentin stopped by the store to point out a minor defect in the bird cage purchased in Sale No. 103. The Harlands offered a sales allowance of 10 plus tax on the price of the cage which satisfied Warkentin. 12Sold a cockatoo on account to Tully Shaw, 1,200 plus tax of 72, terms n/30. Sale No. 104. 14Received cash on account from Rosa Alanso, 256. 15Rosa Alanso returned merchandise, 93.28 including tax of 5.28. 15Cash sales for the week were 2,656.85 plus tax of 159.41. 16Received cash on account from Nancy Truelove, 58.25. 18Received cash for boarding and grooming services, 535 plus tax of 32.10. 19Received cash on account from Ed Cochran, 63.25. 20Sold pet supplies on account to Susan Hays, 83.33 plus tax of 5, terms n/30. Sale No. 105. 21Sold three Labrador Retriever puppies to All American Day Camp, 375 plus tax of 22.50, terms n/30. Sale No. 106. 22Cash sales for the week were 3,122.45 plus tax of 187.35. 23Received cash for boarding and grooming services, 515 plus tax of 30.90. 25Received cash on account from Ken Shank, 132.50. 26Received cash on account from Nancy Truelove, 72.35. 27Received cash on account from Joe Gloy, 273.25. 28Borrowed cash to purchase a pet limousine, 11,000. 29Cash sales for the week were 2,835.45 plus tax of 170.13. 30Received cash for boarding and grooming services, 488 plus tax of 29.28. Wayward had the following general ledger account balances as of September 1: Wayward also had the following accounts receivable ledger balances as of September 1: New customers opening accounts during September were as follows: All American Day Camp 3025 Old Mill Run Bloomington, IN 47408-1080 Tully Shaw 3315 Longview Avenue Bloomington, IN 47401-7223 Susan Hays 1424 Jackson Creek Road Nashville, IN 47448-2245 Jean Warkentin 1813 Deep Well Court Bloomington, IN 47401-5124 Ken Shank 6422 E. Bender Road Bloomington, IN 47401-7756 REQUIRED 1. Enter the transactions for the month of September in a general journal. (Begin with page 7.) 2. Post the entries to the general and subsidiary ledgers. Open new accounts for any customers who did not have a balance as of September 1. 3. Prepare a schedule of accounts receivable. 4. Compute the net sales for the month of September.Enter the following transactions in a general journal: June 4Sold merchandise on account to T. Allen, 1,500 plus 6% sales tax, with 1/10, n/30 cash discount terms. 7 Sold merchandise on account to K. Bryant, 1,800 plus 6% sales tax, with 1/10, n/30 cash discount terms. 11 T. Allen returned merchandise totaling 300 from the June 4 sale, for credit. 14 T. Allen paid the balance due from the June 4 sale, less discount. 17 K. Bryant paid the balance due from the June 7 sale, less discount.1TF 2TF A trade discount is a reduction from the list or catalog price offered to different classes of customers.4TF FOB shipping point means that transportation charges are paid by the seller.1MC In the income statement, Freight-In is (a) added to purchases. (b) subtracted from purchases. (c) added to sales. (d) subtracted from cost of goods.3MC The difference between merchandise available for sale and the end-of-period merchandise inventory is called (a) gross profit. (b) net purchases. (c) net sales. (d) cost of goods sold.5MC 1CE 2CE 3CE 4CE Identify the major documents commonly used in the purchasing process.2RQ What is a voucher system?4RQ Describe how each of the following accounts is used: (1) Purchases, (2) Purchases Returns and Allowances, (3) Purchases Discounts, and (4) Freight-In.How are cost of goods sold and gross profit computed?7RQ 8RQ What steps are followed in posting purchases returns and allowances from the general journal to the general ledger and accounts payable ledger?What steps are followed in posting cash payments from the general journal to the general ledger?11RQ If the total of the schedule of accounts payable does not agree with the Accounts Payable balance, what procedures should be used to search for the error?1SEA 2SEA 3SEA 4SEA JOURNALIZING PURCHASES TRANSACTIONS Journalize the following transactions in a general journal: May 3Purchased merchandise from Reed, 6,100. Invoice No. 321, dated May 1, terms n/30. 9Purchased merchandise from Omana, 2,500. Invoice No. 614, dated May 8, terms 2/10, n/30. 18Purchased merchandise from Yao Distributors, 2,200. Invoice No. 180, dated May 15, terms 1/15, n/30. 23Purchased merchandise from Brown, 5,300. Invoice No. 913, dated May 22, terms 1/10, n/30.JOURNALIZING PURCHASES RETURNS AND ALLOWANCES AND POSTING TO GENERAL LEDGER AND ACCOUNTS PAYABLE LEDGER Using page 3 of a general journal and the following general ledger and accounts payable ledger accounts, journalize and post the following transactions: July 7Returned merchandise to Starcraft Industries, 700. 15Returned merchandise to XYZ, Inc., 450. 27Returned merchandise to Datamagic, 900.7SEA SCHEDULE OF ACCOUNTS PAYABLE Ryans Express, a retail business, had the following beginning balances and purchases and payments activity in its accounts payable ledger during October. Prepare a schedule of accounts payable for Ryans Express as of October 31, 20--.PURCHASES TRANSACTIONS J. B. Speck, owner of Specks Galleria, made the following purchases of merchandise on account during the month of September: Sept. 3Purchase Invoice No. 415, 2,650, from Smith Distributors. 8Purchase Invoice No. 132, 3,830, from Michaels Wholesaler. 11Purchase Invoice No. 614, 3,140, from J. B. Sanders Co. 18Purchase Invoice No. 329, 2,250, from Bateman Jones, Inc. Sept. 23Purchase Invoice No. 767, 4,160, from Smith Distributors. 27Purchase Invoice No. 744, 1,980, from Anderson Company. 30Purchase Invoice No. 652, 2,780, from Michaels Wholesaler. Required 1. Record the transactions starting with page 16 of a general journal. 2. Post from the general journal to the general ledger accounts and to the accounts payable ledger accounts. Use general ledger account numbers as shown in the chapter.CASH PAYMENTS TR ANS ACTIONS Sam Santiago operates a retail variety store. The books include a general journal and an accounts payable ledger. Selected account balances on May 1 are as follows: The following are the transactions related to cash payments for the month of May: May 1Issued Check No. 426 in payment of May rent (Rent Expense), 2,400. 3Issued Check No. 427 to Muellers Distributors in payment of merchandise purchased on account, 3,600, less a 3% discount. Check was written for 3,492. 7Issued Check No. 428 to Van Kooning in partial payment of merchandise purchased on account, 5,500. A cash discount was not allowed. 12Issued Check No. 429 to Fantastic Toys for merchandise purchased on account, 5,200, less a 1% discount. Check was written for 5,148. 15Issued Check No. 430 to City Power and Light (Utilities Expense), 1,720. 18Issued Check No. 431 to A-1 Warehouse for a cash purchase of merchandise, 4,800. 26Issued Check No. 432 to Goya Outlet for merchandise purchased on account, 3,800, less a 2% discount. Check was written for 3,724. 30Issued Check No. 433 to Mercury Transit Company for freight charges on merchandise purchased (Freight-In), 1,200. 31Issued Check No. 434 to Town Merchants for a cash purchase of merchandise, 3,000. Required 1. Enter the transactions starting with page 9 of a general journal. 2. Post from the general journal to the general ledger and the accounts payable ledger. Use general ledger account numbers as shown in the chapter.PURCHASES AND CASH PAYMENTS TRANSACTIONS Emily Frank owns a small retail business called Franks Fantasy. The cash account has a balance of 21,000 on July 1. The following transactions occurred during July: July 1Issued Check No. 414 in payment of July rent, 2,500. 1Purchased merchandise on account from Tillys Toys, Invoice No. 311, 2,800, terms 2/10, n/30. 3Purchased merchandise on account from Scheer Company, Invoice No. 812, 3,300, terms 1/10, n/30. 5Returned merchandise purchased from Tillys Toys, receiving a credit memo on the amount owed, 300. 8Purchased merchandise on account from Donnas Dolls, Invoice No. 139, 2,900, terms 2/10, n/30. 11Issued Check No. 415 to Tillys Toys for merchandise purchased on account, less return of July 5 and less 2% discount. 13Issued Check No. 416 to Scheer Company for merchandise purchased on account, less 1% discount. 15Returned merchandise purchased from Donnas Dolls, receiving a credit memo on the amount owed, 350. 18Issued Check No. 417 to Donnas Dolls for merchandise purchased on account, less return of July 15 and less 2% discount. 25Purchased merchandise on account from Applied Business, Invoice No. 489, 2,650, terms n/30. 26Purchased merchandise on account from Tillys Toys, Invoice No. 375, 2,180, terms 2/10, n/30. 29Purchased merchandise on account from Scheer Company, Invoice No. 883, 3,560, terms 1/10, n/30. Required 1. Enter the transactions starting with page 16 of a general journal. 2. Post from the journal to the general ledger and accounts payable ledger accounts. Use general ledger account numbers as shown in the chapter.SCHEDULE OF ACCOUNTS PAYABLE Based on the information provided in Problem 11-11A, prepare a schedule of accounts payable for Franks Fantasy as of July 31, 20--. Verify that the accounts payable account balance in the general ledger agrees with the schedule of accounts payable total.1SEB TRADE DISCOUNT AND CASH DISCOUNTS Merchandise was purchased on account from Grants Distributors on June 12. The purchase price was 5,000, less a 10% trade discount and credit terms of 3/10, n/30. 1. Calculate the net amount to record the invoice, less the 10% trade discount. 2. Calculate the amount to be paid on this invoice within the discount period. 3. Journalize the purchase of the merchandise on June 12 and the payment on June 22 (within the discount period) in a general journal.PURCHASE TRANSACTIONS AND T ACCOUNTS Using T accounts for Cash, Accounts Payable, Purchases, Purchases Returns and Allowances, Purchases Discounts, and Freight-In, enter the following purchase transactions. Identify each transaction with its corresponding letter. Use a new set of T accounts for each set of transactions, 14. 1. Purchase of merchandise with cash. (a) Merchandise is purchased for cash, 2,300. (b) Merchandise listed at 4,000, less a trade discount of 10%, is purchased for cash. 2. Purchase of merchandise on account with credit terms. (a) Merchandise is purchased on account, credit terms 2/10, n/30, 4,000. (b) Merchandise is purchased on account, credit terms 3/10, n/30, 2,800. (c) Payment is made on invoice (a) within the discount period. (d) Payment is made on invoice (b) too late to receive the cash discount. 3. Purchase of merchandise on account with return of merchandise. (a) Merchandise is purchased on account, credit terms 2/10, n/30, 5,600. (b) Merchandise is returned for credit before payment is made, 600. (c) Payment is made within the discount period. 4. Purchase of merchandise with freight-in. (a) Merchandise is purchased on account, 3,800 plus freight charges of 200. Terms of the sale were FOB shipping point. (b) Payment is made for the cost of merchandise and the freight charge.COMPUTING GROSS PROFIT The following data were taken from the accounts of Burnside Bedknobs, a retail business. Determine the gross profit.JOURNALIZING PURCHASES TRANSACTIONS Journalize the following transactions in a general journal: Jan. 3Purchased merchandise from Feng, 6,000. Invoice No. 416, dated January 1, terms 2/10, n/30. 12Purchased merchandise from Miranda, 9,000. Invoice No. 624, dated January 10, terms n/30. Jan. 19Purchased merchandise from J. B. Barba, 6,400. Invoice No. 190, dated January 18, terms 1/10, n/30. 26Purchased merchandise from Ramirez, 3,700. Invoice No. 923, dated January 25, terms 1/15, n/30.JOURNALIZING PURCHASES RETURNS AND ALLOWANCES AND POSTING TO GENERAL LEDGER AND ACCOUNTS PAYABLE LEDGER Using page 3 of a general journal and the following general ledger accounts and accounts payable ledger accounts, journalize and post the following transactions: Mar. 5Returned merchandise to Tower Industries, 500. 11Returned merchandise to A D Arms, 625. 23Returned merchandise to Mighty Mansion, 275.7SEB SCHEDULE OF ACCOUNTS PAYABLE Crystals Candles, a retail business, had the following balances and purchases and payments activity in its accounts payable ledger during November. Prepare a schedule of accounts payable for Crystals Candles as of November 30, 20--.PURCHASES TRANSACTIONS Ann Benton, owner of Bentons Galleria, made the following purchases of merchandise on account during the month of October: Oct. 2Purchase Invoice No. 321, 1,950, from Boggs Distributors. 7Purchase Invoice No. 152, 2,915, from Wolfs Wholesaler. 10Purchase Invoice No. 634, 3,565, from Komuro Co. 16Purchase Invoice No. 349, 2,845, from Fritz McCord, Inc. 24Purchase Invoice No. 587, 3,370, from Boggs Distributors. 26Purchase Invoice No. 764, 2,240, from Sanderson Company. 31Purchase Invoice No. 672, 1,630, from Wolfs Wholesaler. Required 1. Record the transactions starting with page 16 of a general journal. 2. Post from the general journal to the general ledger accounts and to the accounts payable ledger accounts. Use general ledger account numbers as shown in the chapter.CASH PAYMENTS TRANSACTIONS Kay Zembrowski operates a retail variety store. The books include a general journal and an accounts payable ledger. Selected account balances on May 1 are as follows: The following transactions are related to cash payments for the month of May: May 1Issued Check No. 326 in payment of May rent (Rent Expense), 2,600. 4Issued Check No. 327 to Cortez Distributors in payment of merchandise purchased on account, 4,200, less a 3% discount. Check was written for 4,074. 7Issued Check No. 328 to Indra Velga in partial payment of merchandise purchased on account, 6,200. A cash discount was not allowed. 11Issued Check No. 329 to Toy Corner for merchandise purchased on account, 4,600, less a 1% discount. Check was written for 4,554. 15Issued Check No. 330 to County Power and Light (Utilities Expense), 1,500. 19Issued Check No. 331 to Builders Warehouse for a cash purchase of merchandise, 3,500. 25Issued Check No. 332 to Troutman Outlet for merchandise purchased on account, 4,400, less a 2% discount. Check was written for 4,312. May 30Issued Check No. 333 to Rapid Transit Company for freight charges on merchandise purchased (Freight-In), 800. 31Issued Check No. 334 to City Merchants for a cash purchase of merchandise, 2,350. Required 1. Enter the transactions starting with page 9 of a general journal. 2. Post from the general journal to the general ledger and the accounts payable ledger. Use general ledger account numbers as shown in the chapter.PURCHASES AND CASH PAYMENTS TRANSACTIONS Debbie Mueller owns a small retail business called Debbies Doll House. The cash account has a balance of 20,000 on July 1. The following transactions occurred during July: July 1Issued Check No. 314 for July rent, 1,400. 1Purchased merchandise on account from Toppers Toys, Invoice No. 211, 2,500, terms 2/10, n/30. 3Purchased merchandise on account from Jones Company, Invoice No. 812, 2,800, terms 1/10, n/30. 5Returned merchandise purchased from Toppers Toys receiving a credit memo on the amount owed, 400. 8Purchased merchandise on account from Downtown Merchants, Invoice No. 159, 1,600, terms 2/10, n/30. 11Issued Check No. 315 to Toppers Toys for merchandise purchased on account, less return of July 5 and less 2% discount. 13Issued Check No. 316 to Jones Company for merchandise purchased on account, less 1% discount. 15Returned merchandise purchased from Downtown Merchants receiving a credit memo on the amount owed, 600. 18Issued Check No. 317 to Downtown Merchants for merchandise purchased on account, less return of July 15 and less 2% discount. 25Purchased merchandise on account from Columbia Products, Invoice No. 468, 3,200, terms n/30. 26Purchased merchandise on account from Toppers Toys, Invoice No. 395, 1,430, terms 2/10, n/30. 29Purchased merchandise on account from Jones Company, Invoice No. 853, 2,970, terms 1/10, n/30. Required 1. Enter the transactions starting with page 16 of a general journal. 2. Post from the journal to the general ledger and accounts payable ledger accounts. Use general ledger account numbers as shown in the chapter.SCHEDULE OF ACCOUNTS PAYABLE Based on the information provided in Problem 11-11B, prepare a schedule of accounts payable for Debbies Doll House as of July 31, 20--. Verify that the accounts payable account balance in the general ledger agrees with the schedule of accounts payable total.You are working as a summer intern at a rapidly growing organic food distributor. Part of your responsibility is to assist in the accounts payable department. You notice that most bills from suppliers are not paid within the discount period. The manager of accounts payable says the bills are organized by vendor, like the accounts payable ledger, and she is too busy to keep track of the discount periods. Besides, the owner has told her that the 1% and 2% discounts available are not worth worrying about. Write a memo to the owner explaining why it is expensive not to take advantage of cash discounts on credit purchases. In addition, suggest a way to file (organize) supplier invoices so that they are paid within the discount period.1EC Michelle French owns and operates Books and More, a retail book store. Selected account balances on June 1 are as follows: The following purchases and cash payments transactions took place during the month of June: June 1 Purchased books on account from Irving Publishing Company, 2,100. Invoice No. 101, terms 2/10, n/30, FOB destination. 2 Issued Cheek No. 300 to Northeastern Publishing Co. for goods purchased on May 23, terms 2/10, n/30, 1,960 (the 2,000 invoice amount less the 2% discount). 3 Purchased books on account from Broadway Publishing, Inc., 2,880. Invoice No. 711, less a 20% trade discount, and invoice terms of 3/10, n/30, FOB shipping point. 3 Issued Cheek No. 301 to Mayday Shipping for delivery from Broadway Publishing, Inc., 250. 4 Issued Cheek No. 302 for June rent, 625. 8 Purchased books on account from Northeastern Publishing Co., 5,825. Invoice No. 268, terms 2/com, n/60, FOB destination. 10 Received a credit memo from Irving Publishing Company, 550. Books had been returned because the covers were on upside down. 13 Issued Check No. 304 to Broadway Publishing, Inc., for the purchase made on June 3. (Check No. 303 was voided because an error was made in preparing it.) 28 Made the following purchases: 30 Issued Cheek No. 305 to Taylor County Utility Co. for June utilities, 325. 30 French withdrew cash for personal use, 4,500. Issued Check No. 306. 30 Issued Cheek No. 307 to Irving Publishing Company for purchase made on June 1 less returns made on June 10. 30 Issued Check No. 308 to Northeastern Publishing Co. for purchase made on June 8. 30 Issued Check No. 309 for books purchased at an auction, 1,328. REQUIRED 1. Enter the transactions in a general journal (start with page 16). 2. Post from the journal to the general ledger accounts and the accounts payable ledger. Use general ledger account numbers as indicated in the chapter. 3. Prepare a schedule of accounts payable. 4. If merchandise inventory was 35,523 on January 1 and 42,100 as of June 30, prepare the cost of goods sold section of the income statement for the six months ended June 30,20--.1CP At what amount are purchases recorded under the net-price method?2RQ 3RQ PURCHASES TRANSACTIONSGROS-PRICE AND NET-PRICE METHODS Romeros Heating and Cooling had the following transactions during April: Apr. 2Purchased merchandise on account from Alanon Valve for 1,000, terms 2/10, n/30. 5Purchased merchandise on account from Leons Garage for 1,400, terms 1/10, n/30. 11Paid the amount due to Alanon Valve for the purchase on April 2. 25Paid the amount due to Leons Garage for the purchase on April 5. 1. Prepare general journal entries for these transactions using the gross-price method. 2. Prepare general journal entries for these transactions using the net-price method.PURCHASES TRANSACTIONSGROS-PRICE AND NET-PRICE METHODS Glorias Repair Shop had the following transactions during May: May 2Purchased merchandise on account from Delgados Supply for 900, terms 2/10, n/30. 6Purchased merchandise on account from Goros Auto Care for 1,200, terms 1/10, n/30. 11Paid the amount due to Delgados Supply for the purchase on May 2. 27Paid the amount due to Goros Auto Care for the purchase on May 6. 1. Prepare general journal entries for these transactions using the gross-price method. 2. Prepare general journal entries for these transactions using the net-price method.LO1 The types of special journals a business uses should depend on the types of transactions it has most frequently.2TF 3TF 4TF LO4 Purchases returns and allowances are recorded in the general journal.The first step in posting the sales journal to the general ledger is to total and verify the equality of the amount columns. enter the date in the Date column of the ledger account. enter the new balance in the Balance columns of the ledger account. enter the ledger account number below the column totals in the journal. LO3 In the cash receipts journal, each amount in the General Credit column is posted (a) daily. (b) weekly. (c) at the end of the month. (d) at the end of the year.The journal that should be used to record the return of merchandise for credit is the (a) purchases journal. (b) cash payments journal. (c) general journal. (d) accounts payable journal.A purchases journal usually is used to record all (a) purchases. (b) cash purchases. (c) purchases of merchandise on account. (d) purchases returns and allowances.In the cash payments journal, each amount in the General Debit column is posted (a) daily. (b) weekly. (c) at the end of the month. (d) at the end of the year.1CE LO3 Enter the following transactions in a cash receipts journal like the one illustrated in the chapter: June 7 Received cash on account from Erin Lucas, 882. 30 Made cash sales for the month of 2,150, plus sales tax of 107.50. 30 Received cash for rent revenue, 750.LO4 Enter the following transaction in a purchases journal like the one illustrated in the chapter: Apr. 6 Purchased merchandise from Clever, 1,680. Invoice No. 131, dated April 6, terms n/30.Enter the following transactions in a cash payments journal like the one illustrated in the chapter: Aug. 2 Issued Check No. 193 in payment of August rent (Rent Expense), 2,200. 6 Issued Check No. 194 to Mason Hardware in payment of merchandise purchased on account, 1,700, less 2% discount. The check was written for 1,666. 10 Issued Check No. 195 to Augies Wholesale for cash purchase of merchandise, 2,730.1RQ List four items of information about each sale entered in the sales journal.3RQ 4RQ 5RQ 6RQ

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