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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

The 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. 2    Issued Ck. No. 6981 to Tri-County Management Company for monthly rent, $850.

2    L. Yang, the owner, invested an additional $4,500 in the business.

4    Bought merchandise on account from Valentine and Company, invoice no. A694, $2,830; terms 2/10, n/30; dated January 2.

4    Received check from Velez Appliance for $980 in payment of invoice for $1,000 less discount.

4    Sold merchandise on account to L. Parrish, invoice no. 6483, $755.

6    Received check from Peck, Inc., $637, in payment of $650 invoice less discount.

7    Issued Ck. No. 6982, $588, to Frost and Son, in payment of invoice no. C127 for $600 less discount.

7    Bought supplies on account from Dudley Office Supply, invoice no. 190B, $93.54; terms net 30 days.

7    Sold merchandise on account to Ewing and Charles, invoice no. 6484, $1,115.

9    Issued credit memo no. 43 to L. Parrish, $47, for merchandise returned.

11    Cash sales for January 1 through January 10, $4,454.87.

11    Issued Ck. No. 6983, $2,773.40, to Valentine and Company, in payment of $2,830 invoice less discount.

14    Sold merchandise on account to Velez Appliance, invoice no. 6485, $2,100.

14    Received check from L. Parrish, $693.84, in payment of $755 invoice, less return of $47 and less discount.

Jan. 19    Bought 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).

21    Issued Ck. No. 6984, $245, to A. Bautista for miscellaneous expenses not recorded previously.

21    Cash sales for January 11 through January 20, $3,689.

23    Received credit memo no. 163, $87, from Crawford Products for merchandise returned.

29    Sold merchandise on account to Bradford Supply, invoice no. 6486, $1,697.20.

29    Issued Ck. No. 6985 to Western Freight, $64, for freight charges on merchandise purchased January 4.

31    Cash sales for January 21 through January 31, $3,862.

31    Issued Ck. No. 6986, $65, to M. Pineda for miscellaneous expenses not recorded previously.

31    Recorded 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.

31    Recorded the payroll taxes: FICA Social Security tax, $365.80; FICA Medicare tax, $85.50; state unemployment tax, $318.60; federal unemployment tax, $35.40.

31    Issued Ck. No. 6987, $4,653.65, for salaries for the month.

31    L. Yang, the owner, withdrew $1,000 for personal use, Ck. No. 6988.

Required

  1. 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:

images

  1. 2. Post daily all entries involving customer accounts to the accounts receivable ledger.
  2. 3. Post daily all entries involving creditor accounts to the accounts payable ledger.
  3. 4. Post daily the general journal entries to the general ledger. Write the owner’s name in the Capital and Drawing accounts.
  4. 5. Prepare a trial balance.
  5. 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.

To determine

Journalize the transaction in the general journal using periodic inventory method.

Explanation

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 transaction in general journal:

General journal Page:1
Date Description Post ref. Debit ($) Credit($)
20___          
Jan. 2 Rent expense 627 850  
            Cash 111   850
    (Record rent paid by cash, Ck.no.6981)      
           
  2 Cash 111 4,500  
       Mr. L capital 311   4,500
    (Record additional capital invested      
    by owner)      
           
  4 Purchases 511 2,830  
       Accounts payable, V company 212   2,830
    (Record purchase of merchandise from      
    V company, invoice no: A694)      
           
  4 Cash 111 980  
    Sales discounts 413 20  
        Accounts receivable, V company 113   1,000
    (Record received check from V company      
    for $980 in payment of invoice)      
           
  4 Accounts receivable, L company 113 755  
         Sales 411   755
    (Record merchandise sold on account      
    to L company)      
           
  6 Cash 111 637  
    Sales discount 413 13  
       Accounts receivable, P company 113   650
    (Record received check from P company      
    for $637 in payment of invoice)      
           
  7 Accounts payable, F and S 600    
        Purchase discounts     12
        Cash     588
    (Record issued check to F and S in      
    payment of invoice no: C127)      
           
  7 Supplies 115 93.54  
        Accounts payable, D company 212   93.54
    (Record purchase of supplies on account      
    from D company)      
           
  7 Accounts receivable, E and C 113 1,115  
      Sales 411   1,115
    (Record merchandise sold to E and C)      

Table (1)

General journal Page:2
Date Description Post ref. Debit ($) Credit($)
20___ 9 Sales returns and allowances 111 47  
Jan.     Accounts receivable 311   47
    (Record issued credit memo to E and C for      
    return of merchandise)      
           
  11 Cash 111 4,454.87  
      Sales 411   4,454.87
    (record cash sales)      
           
  11 Accounts payable, V company 212 2,830  
      Cash 111   2,773.40
      Purchase discounts 513   56.6
    (Record issued check to V company for      
    $2,773.40 in payment of invoice)      
           
  14 Accounts receivable, V company 113 2,100  
       Sales 411   2,100
    (Record merchandise sold to V company)      
           
  14 Cash 11 693...

2.

To determine

Record the entries from customer accounts to the accounts receivable ledger.

3.

To determine

Record the entries from creditor accounts to the accounts payable ledger.

4.

To determine

Post the prepared journals and other accounts column to general ledger.

5.

To determine

Prepare a trail balance for Y Company.

6.

To determine

Prepare a schedule for accounts receivable and accounts payable.

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