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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

Saenz Company uses a voucher system in which it records invoices at the gross amount. The following vouchers were issued during February and were unpaid on March 1:

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The following transactions were completed during March:

Mar. 3    Issued voucher no. 1734 in favor of Larry Company for March rent, $1,220.

3    Issued Ck. No. 1829 in payment of voucher no. 1734, $1,220.

5    Bought merchandise on account from Lorenzo, Inc., $3,890; terms 2/10, n/30; FOB shipping point; freight prepaid and added to the invoice, $72 (total, $3,962). Issued voucher no. 1735.

5    Issued Ck. No. 1830 in payment of voucher no. 1729, $3,401.64 ($3,436 less 1 percent cash discount).

9    Issued voucher no. 1736 in favor of Mario Electric Company for electric bill, $216.

9    Issued Ck. No. 1831 in payment of voucher no. 1736, $216.

9    Issued Ck. No. 1832 in payment of voucher no. 1732, $4,615.80 ($4,710 less 2 percent cash discount).

13    Issued Ck. No. 1833 in payment of voucher no. 1735, less the cash discount, $3,884.20. Recall that the freight portion is not eligible for discount.

16    Bought merchandise on account from McGinnis Manufacturing Company, $6,260; terms 2/10 EOM; FOB destination. Issued voucher no. 1737.

25    Issued voucher no. 1738 for note payable previously recorded in the general journal: principal, $4,000, plus $30 interest. The note is payable to the Keller State Bank.

25    Issued Ck. No. 1834 in payment of voucher no. 1737, $6,134.80 ($6,260 less 2 percent cash discount).

31    Issued voucher no. 1739 for wages payable, $4,985, in favor of the payroll bank account. (Assume that the payroll entry was previously recorded in the general journal.)

31    Paid voucher no. 1739 by issuing Ck. No. 1835, $4,985, payable to Payroll Bank Account.

Required

  1. 1. Using the voucher issue date, enter the unpaid invoices in the voucher register (page 65) beginning with voucher no. 1729. Then draw double lines across all columns to separate the vouchers of February from those of March.
  2. 2. Record the transactions for March in the voucher register. Also record the appropriate transactions in the check register (page 71).
  3. 3. Total and rule the voucher register and the check register.
  4. 4. Prove the equality of the debits and credits in the voucher register and the check register.

1.

To determine

Prepare the voucher register for the February month.

Explanation

Voucher: A voucher is a pre-numbered document which indicates the authorized approval of payment for a particular acquisition.

Voucher register is a journal that records the voucher once they are approved. Voucher register is also known as book of original entry.

Prepare the voucher register for the February month.

images

Table (1)

2.

To determine

Prepare the voucher register and check register for the March month.

Explanation

Check register is the journal used to record all the checks, cash payment and outlay of cash during an accounting period. Check register is also known as cash disbursements journal.

Prepare the voucher register for the March month.

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Table (2)

Prepare the check register for the March month.

images

Table (3)

Working note: 1

Calculate the purchase discounts from K Company.

Purchase discount = (Purchase amount×Discount percentage)=$3436×1%=$34.36

Working note: 2

Calculate the purchase discounts from Mr.J. R S.

Purchase discount = (Purchase amount×Discount percentage)=$4,710×2%=$94.2

Working note: 3

Calculate the purchase discounts from L, Inc.

Purchase discount = ([Purchase amountFreight in]×Discount percentage)=([$3,962$72]×2%)=$3890×2%=$77.8

Working note: 4

Calculate the purchase discounts from M M Company.

Purchase discount = (Purchase amount×Discount percentage)=$6,260×2%=$125.2

3.

To determine

Total of the voucher register and check register for the March month.

Explanation

Total of the voucher register:

 Total credit of voucher register = Voucher payable=$20,673

Total debit of voucher register=(Purchase+ Freight in + wages payable+ Other accounts payable)=$10,150+$72+$4,985+$5,466=$20,673

Total of the check register:

 Total credit of check register = (Purchase discount+Cash)=$331.56+$24,457.44=$24,789

Total debit of check register=Voucher payable=$24,789

4.

To determine

Show the equality of credit and debit column of voucher register and check register.   

Explanation

Debit: The condensed form of a ledger is referred to as T-account. The left-hand side of this account is known as debit.

Credit: It refers to selling goods and services to the customers on account.

Equality of debits and credits in voucher register:

Equality of debits and credits
Particulars Debits($) Particulars Credits($)
Purchases 10,150 Vouchers payable 20,673
Freight in 72.00    
Wages payable $4,985    
other 5,466    
Total $20,673   $20,673

Table (4)

Equality of debits and credits in check register:

Equality of debits and credits
Particulars Debits($) Particulars Credits($)
Vouchers payable 24,789 Purchase discounts 331.56
    cash 24,457.44
Total $20,673   $20,673

Table (5)

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