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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

During the month of October 20--, The Pink Petal flower shop engaged in the following transactions:

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Selected account balances as of October 1 were as follows:

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The Pink Petal also had the following subsidiary ledger balances as of October 1:

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REQUIRED

  1. 1. Record the transactions in a sales journal (page 7), cash receipts journal (page 10), purchases journal (page 6), cash payments journal (page 11), and general journal (page 5). Total, verify, and rule the columns where appropriate at the end of the month.
  2. 2. Post from the journals to the general ledger, accounts receivable ledger, and accounts payable ledger accounts. Use account numbers as shown in the chapter.

1.

To determine

Prepare the given transaction in the sales journal, cash receipts journal, purchase journal, cash payment journal, and general journal and verify the total column and rule the column.

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.

Prepare the given transaction in a sales journal and verify the total column and rule the column:

Table (1)

Verification of total debit and credit column:

Total Debit = Total Credit$6,300.00=($6,000.00+$300.00)

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.

The following are the some examples of transactions that would be recorded in the Other Accounts credit column of the cash receipts journal:

  • • Cash received as interest on notes payable
  • • Interest revenue received from debtors
  • • Cash receipts from bank loans
  • • Cash receipts for capital investments

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column:

Table (2)

Verification of total debit and credit column:

Total Debit = Total Credit$10,910.00=($7,235.00+$3,500.00+$175.00)

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.

Prepare the transactions in the purchase journal:

Table (3)

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

2.

To determine

Post the prepared journals to the general ledger, accounts receivable ledger and accounts payable ledger accounts.

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