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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

SALES JOURNAL, CASH RECEIPTS JOURNAL, AND GENERAL JOURNAL Owens Distributors is a retail business. The following sales, returns, and cash receipts occurred during March 20--. There is an 8% sales tax. Beginning general ledger account balances were Cash, $9,741; and Accounts Receivable, $1,058.25. Beginning customer account balances were Thompson Group, $1,058.25.

Mar. 1    Sold merchandise to Able & Co., $1,800, plus sales tax. Sale No. 33C.

3    Sold merchandise to R. J. Kalas, Inc., $2,240, plus sales tax. Sale No. 33D.

5    Able & Co. returned merchandise from Sale No. 33C for a credit (Credit Memo No. 66), $30, plus sales tax.

7    Made cash sales for the week, $3,160, plus sales tax.

10    Received payment from Able & Co. for Sale No. 33C less Credit Memo No. 66.

11    Sold merchandise to Blevins Bakery, $1,210, plus sales tax. Sale No. 33E.

13    Received payment from R. J. Kalas for Sale No. 33D.

14    Made cash sales for the week, $4,200, plus sales tax.

16    Blevins Bakery returned merchandise from Sale No. 33E for a credit (Credit Memo No. 67), $44, plus sales tax.

18    Sold merchandise to R. J. Kalas, Inc., $2,620, plus sales tax. Sale No. 33F.

20    Received payment from Blevins Bakery for Sale No. 33E less Credit Memo No. 67.

Mar. 21    Made cash sales for the week, $2,400, plus sales tax.

25    Sold merchandise to Blevins Bakery, $1,915, plus sales tax. Sale No. 33G.

27    Sold merchandise to Thompson Group, $2,016, plus sales tax. Sale No. 33H.

28    Made cash sales for the week, $3,500, plus sales tax.

Required

  1. 1. Record the transactions in the sales journal, cash receipts journal, and general journal. Total, verify, and rule the columns where appropriate at the end of the month.
  2. 2. Post from the journals to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.

1.

To determine

Prepare the transaction in the sales journal, cash receipts 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)

Working note 1:

Calculate the amount of accounts receivable (debit) on dated 1st March:

Accounts receivable (debit) on dated 1stMarch}=(Sales + 8% on sales tax)=[$1,800+(8%×$1,800)]=[$1,800+$144]=$1,944

Working note 2:

Calculate the amount of accounts receivable (debit) on dated 3rd March:

Accounts receivable (debit) on dated 3rdMarch}=(Sales + 8% on sales tax)=[$2,240+(8%×$2,240)]=[$2,240+$179.20]=$2,419.20

Working note 3:

Calculate the amount of accounts receivable (debit) on dated 11th March:

Accounts receivable (debit) on dated 11thMarch}=(Sales + 8% on sales tax)=[$1,210+(8%×$1,210)]=[$1,210+$96.80]=$1,306.80

Working note 4:

Calculate the amount of accounts receivable (debit) on dated 18th March:

Accounts receivable (debit) on dated 18thMarch}=(Sales + 8% on sales tax)=[$2,620+(8%×$2,620)]=[$2,620+$209.60]=$2,829.60

Working note 5:

Calculate the amount of accounts receivable (debit) on dated 25th March:

Accounts receivable (debit) on dated 25thMarch}=(Sales + 8% on sales tax)=[$1,915+(8%×$1,915)]=[$1,915+$153.20]=$2,068.20

Working note 6:

Calculate the amount of accounts receivable (debit) on dated 27th March:

Accounts receivable (debit) on dated 27thMarch}=(Sales + 8% on sales tax)=[$2,016+(8%×$2,016)]=[$2,016+$161.28]=$2,177.28

Verification of total debit and credit column:

Total Debit = Total Credit$12,745.08=($11,801.00+$944.08)

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)

Working note 1:

Calculate the amount of cash on dated 7th March:

Cash(debit)on dated 1stMarch}=(Cash sales + 8% on sales tax)=[$3,160+(8%×$3,160)]=[$3,160+$252

2.

To determine

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

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