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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 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.

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  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 those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owner’s name in the Capital and Drawing accounts.
  4. 5. Add the columns of the special journals and prove the equality of the debit and credit totals.
  5. 6. Post the appropriate totals of the special journals to the general ledger.
  6. 7. Prepare a trial balance.
  7. 8. 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 transactions using types of journals.

Explanation

Sales Journal: Sales journal is one form of special journal book, which records all the sales transactions that are sold to customers on credit. In a single column sales journal, debit aspect of accounts receivable and credit aspect of inventory are recorded, and then posted to individual subsidiary customer account.

Purchase Journal: Purchase journal records all the merchandise purchase on credit. In a single column purchase journal, debit aspect of inventory and credit aspect of accounts payable are recorded, and then posted to individual subsidiary supplier account.

Cash Receipts Journal:  It is a special book where only cash receipts transactions that are received from customers, merchandise sales and service made in cash and collection of accounts receivable are recorded.

Cash payments journal: Cash payments journal refers to the journal that is used to record the all transaction which is involve the cash payments. For example, the business paid cash to employees (salary paid to employees). Cash payments journal is used to record merchandise purchases made in cash and payments of accounts payable. It also records all other cash payments to various purposes. To include all these transactions, companies use multi-column cash payments journal.

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.

Journalize the transactions using the types of journals.

  • Sales Journal
Sales Journal                Page no: 91
Date Invoice No. Customer Name Post Ref. Accounts Receivable Dr.
          Sales Cr.($)
20__          
Jan. 4 6483 Mr. P 755
  7 6484 Mr. E&C 1,115
  14 6485 Mr. V 2,100
  29 6486 Mr. B 1,697
  31   Total   $5,667
          (113) (411)

Table (1)

  • Purchase Journal
Purchase Journal                Page no:74
Date Customer name Invoice no. Invoice date Terms. Post Ref. Accounts Payable Freight in Purchases
              Credit ($) Debit ($) Debit ($)
20__                  
Jan. 4 V Company A691 2-Jan 2/10,n/30 2,830   2,830
  18 C Company 7281D 16-Jan 2/10,n/60 3,842 142 3,700
  31 Totals         6,672 142 6,530
              (212) (514) (511)

Table (2)

  • Cash receipts journal
Cash Receipts Journal Page:56
Date Accounts Credited Post ref. Cash Sales Discount Accounts Receivable Sales Other Accounts
        debit($) debit($) credit($)  credit($) Credit($)
20__                
Jan 2 Mr. Y, Capital 311 4,500       4,500
  4 V company   980 20 1,000    
  6 P company   637 13 650    
  11     4,455     4,455  
  14 Mr. P   693 14.16 708    
  21     3,689     3,689  
  31     3,862     3,862  
  31 Totals   18,816.71 47.16 2,358 12,005.87 4,500
        (111) (413) (113) (411) (X)

Table (3)

  • Cash payment journal
Cash payments journal Page:63
Date   CK no Account Debited Post ref. Other accounts Accounts payable Purchases discounts Cash
          debit($) debit($) credit($) credit($)
20__                
Jan 2 6981 Rent expense 627 850     850
  7 6982 F company   600 12 588
  11 6983 V Company   2,830 57 2,773...

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

Report the equality of debit and credit totals in special journal column.

2, 3, 4, and 6.

To determine

Post the appropriate special journal to the general ledger.

7.

To determine

Prepare a trail balance of Y Company.

8.

To determine

Prepare a schedule for accounts receivable and accounts payable.

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