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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

August Journal Entries

Ms. Valli has provided the transactions for the month of August to be entered in the system. All About You Spa does not track cash sales by customer.

Checkbook Register

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Purchases Invoices for Merchandise Bought on Account During August

All About You Spa will pay all freight costs associated with purchases of merchandise to the supplier. Invoice 616 was paid within the discount period on 8/10. The remaining August purchases were not paid until September.

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Sales Invoices for Gift Certificates Sold on Account During August

All About You Spa is responsible for collecting and paying the sales tax on merchandise that it sells. The sales tax rate where All About You Spa does business is 8 percent of each sale (for example, $560.00 × 0.08 = $44.80). Invoice 25 was received within the discount period on 8/23. (Apply the discount to the invoice amount. Disregard the sales tax when calculating the discount.) The remaining August sales were not received until September.

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Other August Transactions

There were two other transactions in August. Neither involved cash.

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Required

  1. 1. Journalize the transactions for August. Ask your instructor whether you should use the special journals or the general journal.
    • If you are preparing the journal entries manually, enter your transactions beginning on page 11.
  2. 2. Post the entries to the accounts receivable, accounts payable, and general ledger.
    • Ignore this step if you are using CLGL.
  3. 3. Prepare a trial balance as of August 31, 20--.
  4. 4. Prepare a schedule of accounts receivable as of August 31, 20--.
  5. 5. Prepare a schedule of accounts payable as of August 31, 20--.

1.

To determine

Journalize the transactions using special journals for August.

Explanation

Special journal: It is a book which records some specific kinds of transactions such as cash receipts, cash payments, credit sales, and credit purchases. Special journal is created for any kind of transaction. A business uses special journals depending on the types of transactions that occur most repeatedly. If a specific type of transactions occur often, it is more likely a special journal of that type would be beneficial for the business.

Journalize the transactions using special journals.

  • Cash Receipts Journal

Table (1)

Equality of debits and credits for cash receipts journal.

EQUALITY OF DEBITS AND CREDITS
DEBITS ($)CREDITS ($)
24,282.63,848.5
17.4610,926
8,820.00
705.6
24,300.0624,300.06

Table (2)

  • Cash Payments Journal

Table (3)

Equality of debits and credits for cash payments journal:

EQUALITY OF DEBITS AND CREDITS
DEBITS ($)CREDITS ($)
16,649.6633,867.7
17,30082.00
33,949.6633,949.66

Table (4)

  • Purchase Journal

Table (5)

Equality of debits and credits for purchase journal:

      EQUALITY OF DEBITS AND CREDITS
DEBITS ($)CREDITS ($)
58911,065
10,476 
11,06511,065

Table (6)

  • Sales Journal

2.

To determine

Post the entries to the accounts receivable, accounts payable and general ledger.

3.

To determine

Prepare trial balance for 31st August.

4.

To determine

Prepare a schedule of accounts receivable for 31st August.

5.

To determine

Prepare a schedule of accounts payable for 31st August.

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