Concept explainers
(a)
Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.
The following are the rules of debit and credit:
- 1. Increase in assets and expenses accounts are debited. Decrease in liabilities and
stockholders’ equity accounts are debited. - 2. Increase in liabilities, revenues, and stockholders’ equity accounts are credited. Decreases in all asset accounts are credited.
To Record: The journal entries in books of Company GH using periodic inventory system during April.
(a)
Explanation of Solution
Prepare the journal entries for Company GH during April:
Journal entries | |||
Date | Account Title and Explanation | Debit ($) | Credit ($) |
April 05 | Purchases | 1,500 | |
Accounts payable | 1,500 | ||
(To record purchase on account) | |||
April 07 | Freight-in | 80 | |
Cash | 80 | ||
(To record Freight-in on purchase) | |||
April 09 | Accounts payable | 200 | |
Purchase returns and allowances | 200 | ||
(To record the purchase returns) | |||
April 10 |
| 1,340 | |
Sales Revenue | 1,340 | ||
(To record sales on account) | |||
April 12 | Purchases | 830 | |
Accounts payable | 830 | ||
(To record purchase on account) | |||
April 14 | Accounts payable | 1,300 (1) | |
Purchase discounts | 39 (2) | ||
Cash | 1,261 (3) | ||
(To record payment on account in full) | |||
April 17 | Accounts payable | 30 | |
Purchase returns and allowances | 30 | ||
(To record purchase returns) | |||
April 20 | Accounts receivable | 810 | |
Sales revenue | 810 | ||
(To record sales on account) | |||
April 21 | Accounts payable | 800 | |
Purchase discounts | 8 | ||
Cash | 792 | ||
(To record payment on account in full) | |||
April 27 | Sales returns and allowances | 80 | |
Accounts receivable | 80 | ||
(To record sales returns) | |||
April 30 | Cash | 1,220 | |
Accounts receivable | 1,220 | ||
(To record payment received on account) |
Table (1)
Working notes:
Calculate the amount of net accounts payable.
Inventory = $1,500
Purchase returns = $200
Calculate the amount of purchase discount.
Net accounts payable = $1,300 (1)
Discount percentage = 3%
Calculate the amount of cash paid.
Net accounts payable = $1,300 (1)
Purchase discount = $39 (2)
Calculate the amount of net accounts payable.
Inventory = $830
Purchase returns = $30
Calculate the amount of purchase discount.
Net accounts payable = $800 (4)
Discount percentage = 1%
Calculate the amount of cash paid.
Net accounts payable = $800 (4)
Purchase discount = $8 (5)
(b)
T Accounts: T- accounts are prepared for all the business transactions. First, journal entries are passed and then transferred to the respective ledger accounts where, they are recorded and summarized in either side of the ‘T’ format. It is divided into two parts by a vertical line, that is, the left side and the right side. The left side of the T-account is known as the debit side and the right side of the T-account is known as the credit side. The account name appears on the top of the T-account.
To
(b)
Explanation of Solution
The following is the T-account.
Cash Account:
Cash Account | ||||||
Date | Details |
Debit ($) | Date | Details |
Credit ($) | |
April 1 | Beginning Balance | 2,500 | April 7 | Inventory | 80 | |
April 30 | Accounts receivable | 1,220 | April 14 | Accounts payable | 1,261 | |
April 21 | Accounts payable | 792 | ||||
April 30 | Ending Balance | 1,587 | ||||
April 30 | Total | 3,720 | April 30 | Total | 3,720 |
Table (2)
Accounts Receivable Account:
Accounts Receivable Account | ||||||
Date | Details |
Debit ($) | Date | Details |
Credit ($) | |
April 10 | Sales revenue | 1,340 | April 27 | Cash | 80 | |
April 20 | Sales revenue | 810 | April 30 | Sales discount | 1,220 | |
April 30 | Ending Balance | 850 | ||||
April 30 | Total | 2,150 | April 30 | Total | 2,150 |
Table (3)
Inventory Account:
Inventory Account | ||||||
Date | Details | Debit ($) | Date | Details | Credit ($) | |
April 1 | Beginning balance | 3,500 | April 30 | Ending Balance | 3,500 | |
Total | 3,500 | Total | 3,500 |
Table (4)
Accounts Payable Account:
Accounts Payable Account | ||||||
Date | Details |
Debit ($) | Date | Details |
Credit ($) | |
April 9 | Inventory | 200 | April 5 | Inventory | 1,500 | |
April 14 | Inventory | 39 | April 12 | Inventory | 830 | |
April 14 | Cash | 1,261 | ||||
April 17 | Inventory | 30 | ||||
April 21 | Inventory | 8 | ||||
April 21 | Cash | 792 | ||||
April 30 | Total | 2,330 | April 30 | Total | 2,330 |
Table (5)
Common Stock Account:
Common Stock Account | ||||||
Date | Details |
Debit ($) | Date | Details |
Credit ($) | |
April 30 | Ending Balance | 6,000 | April 1 | Beginning Balance | 6,000 | |
April 30 | Total | 6,000 | April 30 | Total | 6,000 |
Table (6)
Sales Revenue Account:
Sales Revenue Account | ||||||
Date | Details |
Debit ($) | Date | Details |
Credit ($) | |
April 30 | Ending Balance | 2,150 | April 10 | Accounts receivable | 1,340 | |
April 20 | Accounts receivable | 810 | ||||
April 30 | Total | 2,150 | April 31 | Total | 2,150 |
Table (7)
Sales Return and Allowance Account:
Sales Return and Allowances Account | ||||||
Date | Details |
Debit ($) | Date | Details |
Credit ($) | |
April 27 | Accounts receivable | 80 | April 30 | Ending Balance | 80 | |
April 30 | Total | 80 | April 30 | Total | 80 |
Table (8)
Purchase Account:
Purchase Account | ||||||
Date | Details | Debit ($) | Date | Details | Credit ($) | |
April 05 | Accounts payable | 1,500 | April 30 | Ending Balance | 2,330 | |
April 12 | Accounts payable | 830 | ||||
April 30 | Total | 2,330 | April 30 | Total | 2,330 |
Table (9)
Purchases Return and Allowance Account:
Purchases Return and Allowance Account | ||||||
Date | Details | Debit ($) | Date | Details |
Credit ($) | |
April 30 |
Ending Balance | 230 | April 09 |
Accounts payable | 200 | |
April 17 |
Accounts payable | 30 | ||||
Total | 230 | Total | 230 |
Table (10)
Purchases Discount Account:
Purchases Discount Account | ||||||
Date | Details | Debit ($) | Date | Details | Credit ($) | |
April 30 |
Ending Balance | 47 | April 14 |
Accounts payable | 39 | |
April 21 |
Accounts payable | 8 | ||||
Total | 47 | Total | 47 |
Table (11)
Freight-in Account:
Freight-In Account | ||||||
Date | Details | Debit ($) | Date | Details |
Credit ($) | |
April 07 | Cash | 80 | April 30 | Ending Balance | 80 | |
Total | 80 | Total | 80 |
Table (12)
(c)
To determine: Prepare trial balance for Company GH on April 30, 2017.
(c)
Answer to Problem 5.9AP
The following table shows the trial balance of Company GH as on April 30, 2017.
COMPANY GH | ||
Trial Balance | ||
As on April 30, 2017 | ||
Account Title | Balance ($) | |
Debit | Credit | |
Cash | 1,587 | |
Accounts Receivable | 850 | |
Inventory | 3,500 | |
Common Stock | 6,000 | |
Sales Revenue | 2,150 | |
Sales Returns and Allowances | 80 | |
Purchases | 2,330 | |
Purchase Returns and Allowances | 230 | |
Purchase Discounts | 47 | |
Freight-in | 80 | |
TOTAL | 8,427 | 8,427 |
Table (13)
Explanation of Solution
The trial balance as shown in Table (13) is prepared after placing the journals to ledger account. It will show the ending balance of all the accounts. Here, the total debit balance is matched with the credit balance.
Therefore, the total debit balance and credit balance of Company GH is $8,427.
(d)
The income statement: This is a financial statement that shows the net income earned, or net loss suffered by a company, through reporting all the revenues earned, and expenses incurred, by the company over a specific period of time. An income statement is also known as an operations statement, an earnings statement, a revenue statement, or a
To Prepare: The income statement through gross profit for the month ended April 30, 2017 assuming the merchandise inventory on hand at April 30 is $4,263.
(d)
Explanation of Solution
Following is the income statement of Company GH.
COMPANY GH | ||||
Income Statement (partial) | ||||
For the Month Ended April 30, 2017 | ||||
Particulars | Amount ($) | Amount ($) | Amount ($) | Amount ($) |
Sales Revenues: | 2,150 | |||
Less: Sales returns and allowances | (80) | |||
Net Sales | 2,070 | |||
Less: Cost of goods sold | ||||
Beginning inventory | 3,500 | |||
Add: Purchases | 2,330 | |||
Less: Purchase returns and allowances | 230 | |||
Purchase discounts | 47 | (277) | ||
Net purchases | 2,053 | |||
Add: Freight-in | 80 | |||
Cost of goods purchased | 2,133 | |||
Cost of goods available for sale | 5,633 | |||
Less: Ending inventory | (4,263) | |||
Cost of goods sold | (1,370) | |||
Gross profit | 700 |
Table (14)
Therefore, the gross profit of Company GH is $700.
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Chapter 5 Solutions
FINANCIAL ACCT.:TOOLS...(LL)-W/ACCESS
- The following transactions were completed by Hammond Auto Supply during January, which is 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. Hammond Auto Supply does not track cash sales by customer. Jan. 2Issued Ck. No. 6981 to JSS Management Company for monthly rent, 775. 2J. Hammond, the owner, invested an additional 3,500 in the business. 4Bought merchandise on account from Valencia and Company, invoice no. A691, 2,930; terms 2/10, n/30; dated January 2. 4Received check from Vega Appliance for 980 in payment of 1,000 invoice less discount. 4Sold merchandise on account to L. Paul, invoice no. 6483, 850. 6Received check from Petty, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Fischer and Son, in payment of invoice no. C1272 for 600 less discount. 7Bought supplies on account from Doyle Office Supply, invoice no. 1906B, 108; terms net 30 days. 7Sold merchandise on account to Ellison and Clay, invoice no. 6484, 787. 9Issued credit memo no. 43 to L. Paul, 54, for merchandise returned. 11Cash sales for January 1 through January 10, 4,863.20. 11Issued Ck. No. 6983, 2,871.40, to Valencia and Company, in payment of 2,930 invoice less discount. 14Sold merchandise on account to Vega Appliance, invoice no. 6485, 2,050. Jan. 18Bought merchandise on account from Costa Products, invoice no. 7281D, 4,854; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to the invoice, 147 (total 5,001). 21Issued Ck. No. 6984, 194, to M. Miller for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 4,591. 23Issued Ck. No. 6985 to Forbes Freight, 96, for freight charges on merchandise purchased on January 4. 23Received credit memo no. 163, 376, from Costa Products for merchandise returned. 29Sold merchandise on account to Bruce Supply, invoice no. 6486, 1,835. 31Cash sales for January 21 through January 31, 4,428. 31Issued Ck. No. 6986, 53, to M. Miller for miscellaneous expenses not recorded previously. 31Recorded payroll entry from the payroll register: total salaries, 6,200; employees federal income tax withheld, 872; FICA Social Security tax withheld, 384.40, FICA Medicare tax withheld, 89.90. 31Recorded the payroll taxes: Social Security tax, 384.40, FICA Medicare tax, 89.90; state unemployment tax, 334.80; federal unemployment tax, 37.20. 31Issued Ck. No. 6987, 4,853.70, for salaries for the month. 31J. Hammond, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 1. Record the transactions for January using a sales journal, page 73; a purchases journal, page 56; a cash receipts journal, page 38; a cash payments journal, page 45; and a general journal, page 100. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forwardThe following transactions were completed by Hammond Auto Supply during January, which is 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. Hammond Auto Supply does not track cash sales by customer. Jan. 2Issued Ck. No. 6981 to JSS Management Company for monthly rent, 775. 2J. Hammond, the owner, invested an additional 3,500 in the business. 4Bought merchandise on account from Valencia and Company, invoice no. A691, 2,930; terms 2/10, n/30; dated January 2. 4Received check from Vega Appliance for 980 in payment of 1,000 invoice less discount. 4Sold merchandise on account to L. Paul, invoice no. 6483, 850. 6Received check from Petty, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Fischer and Son, in payment of invoice no. C1272 for 600 less discount. 7Bought supplies on account from Doyle Office Supply, invoice no. 1906B, 108; terms net 30 days. 7Sold merchandise on account to Ellison and Clay, invoice no. 6484, 787. 9Issued credit memo no. 43 to L. Paul, 54, for merchandise returned. 11Cash sales for January 1 through January 10, 4,863.20. 11Issued Ck. No. 6983, 2,871.40, to Valencia and Company, in payment of 2,930 invoice less discount. 14Sold merchandise on account to Vega Appliance, invoice no. 6485, 2,050. Jan. 18Bought merchandise on account from Costa Products, invoice no. 7281D, 4,854; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to the invoice, 147 (total 5,001). 21Issued Ck. No. 6984, 194, to M. Miller for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 4,591. 23Issued Ck. No. 6985 to Forbes Freight, 96, for freight charges on merchandise purchased on January 4. 23Received credit memo no. 163, 376, from Costa Products for merchandise returned. 29Sold merchandise on account to Bruce Supply, invoice no. 6486, 1,835. 31Cash sales for January 21 through January 31, 4,428. 31Issued Ck. No. 6986, 53, to M. Miller for miscellaneous expenses not recorded previously. 31Recorded payroll entry from the payroll register: total salaries, 6,200; employees federal income tax withheld, 872; FICA Social Security tax withheld, 384.40, FICA Medicare tax withheld, 89.90. 31Recorded the payroll taxes: Social Security tax, 384.40, FICA Medicare tax, 89.90; state unemployment tax, 334.80; federal unemployment tax, 37.20. 31Issued Ck. No. 6987, 4,853.70, for salaries for the month. 31J. Hammond, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 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: 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily the general journal entries to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Prepare a trial balance. 6. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forwardThe accounts and their balances in the ledger of Markeys Mountain Shop as of December 31, the end of its fiscal year, are as follows: Data for the adjustments are as follows. Assume that Markeys Mountain Shop uses the perpetual inventory system. a. Merchandise Inventory at December 31, 140,357. b. Store supplies inventory (on hand) at December 31, 540. c. Depreciation of building, 3,400. d. Depreciation of store equipment, 3,800. e. Salaries accrued at December 31, 1,250. f. Insurance expired during the year, 1,480. Required 1. Complete the work sheet after entering the account names and balances onto the work sheet. Ignore this step if using CLGL. 2. Journalize the adjusting entries. If using manual working papers, record adjusting entries on journal page 63.arrow_forward
- Post the following November transactions to T-accounts for Accounts Payable, Inventory, and Cash, indicating the ending balance. Assume no beginning balances in Accounts Payable and Inventory, and a beginning Cash balance of $36,500. A. purchased merchandise inventory on account, $16,000 B. paid vendors for part of inventory purchased earlier in month, $12,000 C. purchased merchandise inventory for cash, $10,500arrow_forwardPost the following November transactions to T-accounts for Accounts Payable and Inventory, indicating the ending balance (assume no beginning balances in these accounts). A. purchased merchandise inventory on account, $22,000 B. paid vendors for part of inventory purchased earlier in month, $14,000 C. purchased merchandise inventory for cash, $6,500arrow_forwardRecording Sale and Purchase Transactions Jordan Footwear sells athletic shoes and uses the perpetual inventory system. During June, Jordan engaged in the following transactions its first month of operations: a. On June1, Jordan purchased, on credit, 100 pairs of basketball shoes and 210 pairs of running shoes with credit terms of 2/10, n/30. The basketball shoes were purchased at a cost of $85 per pair, and the running shoes were purchased at a cost of $60 per pair. Jordan paid Mole Trucking $310 cash to transport the shoes from the manufacturer to Jordans warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on June 1 and arrived on June 4. b. On June 2, Jordan purchased 88 pairs of cross-training shoes for cash. The shoes cost Jordan $65 per pair. c. On June 6, Jordan purchased 125 pairs of tennis shoes on credit. Credit terms were 2/10, n/25. The shoes were purchased at a cost of $45 per pair. d. On June 10, Jordan paid for the purchase of the basketball shoes and the running shoes in Transaction a. e. On June 12, Jordan determined that $585 of the tennis shoes were defective. Jordan returned the defective merchandise to the manufacturer. f. On June 18, Jordan sold 50 pairs of basketball shoes at $116 per pair, 92 pairs of running shoes for S85 per pair, 21 pairs of cross-training shoes for $100 per pair, and 48 pairs of tennis shoes for $68 per pair. All sales were for cash. The cost of the merchandise sold was $13,295. No sales returns are expected. g. On June 21, customers returned 10 pairs of the basketball shoes purchased on June 18. The cost of the merchandise returned was $850. h. On June 23, Jordan sold another 20 pairs of basketball shoes, on credit, for $116 per pair and 15 pairs of cross-training shoes for $100 cash per pair. The cost of the merchandise sold was $2,675. i. On June 30, Jordan paid for the June 6 purchase of tennis shoes minus the return on June 12. j. On June 30, Jordan purchased 60 pairs of basketball shoes, on credit, for S85 each. The shoes were shipped F.O.B. destination and arrived at Jordan on July 3. Required: 1. Prepare the journal entries to record the sale and purchase transactions for Jordan during June 2019. 2. Assuming operating expenses of $5,300 and income taxes of $365, prepare Jordans income statement for June 2019.arrow_forward
- The transactions completed by Revere Courier Company during December 2016, the first month of the fiscal year, were as follows: Instructions 1. Enter the following account balances in the general ledger as of December 1: 2. Journalize the transactions for December 2016, using the following journals similar to those illustrated in this chapter: cash receipts journal (p. 31), purchases journal (p. 37, with columns for Accounts Payable, Maintenance Supplies, Office Supplies, and Other Accounts), single-column revenue journal (p. 35), cash payments journal (p. 34), and two-column general journal (p. 1). Assume that the daily postings to the individual accounts in the accounts payable subsidiary ledger and the accounts receivable subsidiary ledger have been made. 3. Post the appropriate individual entries to the general ledger. 4. Total each of the columns of the special journals, and post the appropriate totals to the general ledger; insert the account balances. 5. Prepare a trial balance.arrow_forwardThe 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. 2Issued Ck. No. 6981 to Tri-County Management Company for monthly rent, 850. 2L. Yang, the owner, invested an additional 4,500 in the business. 4Bought merchandise on account from Valentine and Company, invoice no. A694, 2,830; terms 2/10, n/30; dated January 2. 4Received check from Velez Appliance for 980 in payment of invoice for 1,000 less discount. 4Sold merchandise on account to L. Parrish, invoice no. 6483, 755. 6Received check from Peck, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Frost and Son, in payment of invoice no. C127 for 600 less discount. 7Bought supplies on account from Dudley Office Supply, invoice no. 190B, 93.54; terms net 30 days. 7Sold merchandise on account to Ewing and Charles, invoice no. 6484, 1,115. 9Issued credit memo no. 43 to L. Parrish, 47, for merchandise returned. 11Cash sales for January 1 through January 10, 4,454.87. 11Issued Ck. No. 6983, 2,773.40, to Valentine and Company, in payment of 2,830 invoice less discount. 14Sold merchandise on account to Velez Appliance, invoice no. 6485, 2,100. 14Received check from L. Parrish, 693.84, in payment of 755 invoice, less return of 47 and less discount. Jan. 19Bought 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). 21Issued Ck. No. 6984, 245, to A. Bautista for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 3,689. 23Received credit memo no. 163, 87, from Crawford Products for merchandise returned. 29Sold merchandise on account to Bradford Supply, invoice no. 6486, 1,697.20. 29Issued Ck. No. 6985 to Western Freight, 64, for freight charges on merchandise purchased January 4. 31Cash sales for January 21 through January 31, 3,862. 31Issued Ck. No. 6986, 65, to M. Pineda for miscellaneous expenses not recorded previously. 31Recorded 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. 31Recorded the payroll taxes: FICA Social Security tax, 365.80; FICA Medicare tax, 85.50; state unemployment tax, 318.60; federal unemployment tax, 35.40. 31Issued Ck. No. 6987, 4,653.65, for salaries for the month. 31L. Yang, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 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: 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily the general journal entries to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Prepare a trial balance. 6. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forwardThe 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. 2Issued Ck. No. 6981 to Tri-County Management Company for monthly rent, 850. 2L. Yang, the owner, invested an additional 4,500 in the business. 4Bought merchandise on account from Valentine and Company, invoice no. A694, 2,830; terms 2/10, n/30; dated January 2. 4Received check from Velez Appliance for 980 in payment of invoice for 1,000 less discount. 4Sold merchandise on account to L. Parrish, invoice no. 6483, 755. 6Received check from Peck, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Frost and Son, in payment of invoice no. C127 for 600 less discount. 7Bought supplies on account from Dudley Office Supply, invoice no. 190B, 93.54; terms net 30 days. 7Sold merchandise on account to Ewing and Charles, invoice no. 6484, 1,115. 9Issued credit memo no. 43 to L. Parrish, 47, for merchandise returned. 11Cash sales for January 1 through January 10, 4,454.87. 11Issued Ck. No. 6983, 2,773.40, to Valentine and Company, in payment of 2,830 invoice less discount. 14Sold merchandise on account to Velez Appliance, invoice no. 6485, 2,100. 14Received check from L. Parrish, 693.84, in payment of 755 invoice, less return of 47 and less discount. Jan. 19Bought 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). 21Issued Ck. No. 6984, 245, to A. Bautista for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 3,689. 23Received credit memo no. 163, 87, from Crawford Products for merchandise returned. 29Sold merchandise on account to Bradford Supply, invoice no. 6486, 1,697.20. 29Issued Ck. No. 6985 to Western Freight, 64, for freight charges on merchandise purchased January 4. 31Cash sales for January 21 through January 31, 3,862. 31Issued Ck. No. 6986, 65, to M. Pineda for miscellaneous expenses not recorded previously. 31Recorded 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. 31Recorded the payroll taxes: FICA Social Security tax, 365.80; FICA Medicare tax, 85.50; state unemployment tax, 318.60; federal unemployment tax, 35.40. 31Issued Ck. No. 6987, 4,653.65, for salaries for the month. 31L. Yang, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 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. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forward
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