Concept explainers
1 and 2
Prepare the general ledger for Company TUF.
1 and 2
Explanation of Solution
General ledger: General ledger is a record of all accounts of assets, liabilities, and
GENERAL LEDGER | ||||||
ACCOUNT: Cash | Account No.: 101 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
May 1 | ✔ | $ 25,800.00 | ||||
May 4 | J12 | $ 1,176.00 | $ 26,976.00 | |||
May 6 | J13 | $ 925.00 | $ 27,901.00 | |||
May 7 | J13 | $ 25.00 | $ 27,876.00 | |||
May 10 | J13 | $ 441.00 | $ 28,317.00 | |||
May 17 | J13 | $ 1,274.00 | $ 29,591.00 | |||
May 19 | J13 | $ 2,900.00 | $ 32,491.00 | |||
May 29 | J14 | $ 568.40 | $ 33,059.40 |
Table (1)
GENERAL LEDGER | ||||||
ACCOUNT: |
Account No.: 111 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
May 1 | Balance | J12 | $ 4,100.00 | |||
May 1 | J12 | $ 450.00 | $ 4,550.00 | |||
May 4 | J12 | $ 1,200.00 | $ 3,350.00 | |||
May 8 | J13 | $ 1,500.00 | $ 4,850.00 | |||
May 10 | J13 | $ 450.00 | $ 4,400.00 | |||
May 14 | J13 | $ 200.00 | $ 4,200.00 | |||
May 17 | J13 | $ 1,300.00 | $ 2,900.00 | |||
May 19 | J13 | $ 2,900.00 | $ 0.00 | |||
May 20 | J14 | $ 580.00 | $ 580.00 | |||
May 24 | J14 | $ 480.00 | $ 1,060.00 | |||
May 26 | J14 | $ 850.00 | $ 1,910.00 | |||
May 27 | J14 | $ 48.00 | $ 1,862.00 | |||
May 29 | J14 | $ 580.00 | $ 1,282.00 | |||
May 30 | J14 | $ 1,200.00 | $ 2,482.00 | |||
ACCOUNT: Sales | Account No.: 401 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
May 1 | J12 | $ 450.00 | $ 450.00 | |||
May 6 | J13 | $ 925.00 | $ 1,375.00 | |||
May 8 | J13 | $ 1,500.00 | $ 2,875.00 | |||
May 20 | J14 | $ 580.00 | $ 3,455.00 | |||
May 24 | J14 | $ 480.00 | $ 3,935.00 | |||
May 26 | J14 | $ 850.00 | $ 4,785.00 | |||
May 30 | J14 | $ 1,200.00 | $ 5,985.00 | |||
ACCOUNT: Sales Returns and Allowances | Account No.: 451 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
May 7 | J13 | $ 25.00 | $ 25.00 | |||
May 14 | J13 | $ 200.00 | $ 225.00 | |||
May 27 | J14 | $ 48.00 | $ 273.00 |
Table (2)
GENERAL LEDGER | ||||||
ACCOUNT: Sales Discount | Account No.: 452 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
May 4 | J12 | $ 24.00 | $ 24.00 | |||
May 10 | J13 | $ 9.00 | $ 33.00 | |||
May 17 | J13 | $ 26.00 | $ 59.00 | |||
May 29 | J14 | $ 11.60 | $ 70.60 |
Table (3)
Reference Notes:
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all the increase in the assets, the expenses and the dividends, all the decrease in liabilities, revenues and the stockholders’ equities.
- Credit, all the increase in the liabilities, the revenues, and the stockholders’ equities, and all decreases in the assets, and the expenses.
Pass the journal entries for the given transactions:
General Journal | Page - 12 | |||
Date | Description | Post Ref | Debit | Credit |
2019 | ||||
May 1 | Accounts receivable | 111 | $450 | |
Sales | 401 | $450 | ||
(To record the sale on account to AF; Invoice 9312, 2/10, n/10) | ||||
May 4 | Sales Discount (1) | 452 | $24 | |
Cash (2) | 101 | $1,176 | ||
Accounts receivable | 111 | $1,200 | ||
(To record the receipt of payment from OCF, Invoice 9299) |
Table (4)
General Journal | Page - 13 | |||
Date | Description | Post Ref | Debit | Credit |
2019 | ||||
May 6 | Cash | 101 | $925 | |
Sales | 401 | $925 | ||
(To record the sale for cash) | ||||
May 7 | Sales Returns and Allowances | 451 | $25 | |
Cash | 101 | $25 | ||
(To record the sales returns for goods sold on May 6) | ||||
May 8 | Accounts receivable | 111 | $1,500 | |
Sales | 401 | $1,500 | ||
(To record the sale on account to RF; Invoice 9313, 2/10, n/10) | ||||
May 10 | Sales Discount (3) | 452 | $9 | |
Cash (4) | 101 | $441 | ||
Accounts receivable | 111 | $450 | ||
(To record the receipt of payment from AF, Invoice 9312) | ||||
May 14 | Sales Returns and Allowances | 451 | $200 | |
Cash | 101 | $200 | ||
(To record the sales returns from RF for the sales made on May 8 using invoice 9313, the credit memorandum is 109) | ||||
May 17 | Sales Discount (6) | 452 | $26 | |
Cash (7) | 101 | $1,274 | ||
Accounts receivable (5) | 111 | $1,300 | ||
(To record the receipt of payment from RF, Invoice 9313) | ||||
May 19 | Cash | 101 | $2,900 | |
Accounts receivable | 111 | $2,900 | ||
(To record the receipt of payment from WLF, Invoice 9279) |
Table (5)
General Journal | Page - 14 | |||
Date | Description | Post Ref | Debit | Credit |
2019 | ||||
May 20 | Accounts receivable | 111 | $580 | |
Sales | 401 | $580 | ||
(To record the sale on account to GPS; Invoice 9314, 2/10, n/10) | ||||
May 24 | Accounts receivable | 111 | $480 | |
Sales | 401 | $480 | ||
(To record the sale on account to MFD; Invoice 9315, 2/10, n/10) | ||||
May 26 | Accounts receivable | 111 | $850 | |
Sales | 401 | $850 | ||
(To record the sale on account to CFS; Invoice 9316, 2/10, n/10) | ||||
May 27 | Sales Returns and Allowances | 451 | $48 | |
Cash | 101 | $48 | ||
(To record the sales returns from MFD for the sales made on May 24 using invoice 9315, the credit memorandum is 110) | ||||
May 29 | Sales Discount (8) | 452 | $11.60 | |
Cash (9) | 101 | $568.40 | ||
Accounts receivable | 111 | $580.00 | ||
(To record the receipt of payment from GPS, Invoice 9314) | ||||
May 30 | Accounts receivable | 111 | $1,200 | |
Sales | 401 | $1,200 | ||
(To record the sale on account to WLF; Invoice 9317, 2/10, n/10) |
Table (6)
Working Notes (1):
Calculate the value of Sales Discount on May 4.
Working Notes (2):
Calculate the value of Cash on May 4.
Working Notes (3):
Calculate the value of Sales Discount on May 10.
Working Notes (4):
Calculate the value of Cash on May 10.
Working Notes (5):
Calculate the value of Accounts receivable on May 17.
Working Notes (6):
Calculate the value of Sales Discount on May 17.
Working Notes (7):
Calculate the value of Cash on May 17.
Working Notes (8):
Calculate the value of Sales Discount on May 29.
Working Notes (9):
Calculate the value of Cash on May 29.
3
Using the Schedule of Accounts Receivable compare the Accounts receivable balances with the total and identify the total amount of sales before allowances, returns or discounts.
3
Explanation of Solution
Schedule of accounts receivable: This is the schedule which reports all the debtors of a company during the given period and the balances to be recovered from them.
Prepare the Accounts receivable Subsidiary Ledger:
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER | |||||
NAME: AF | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
May 1 | Invoice 9312 | J12 | $ 450.00 | $ 450.00 | |
May 10 | J13 | $ 450.00 | $ 0.00 | ||
NAME: CFS | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
May 26 | Invoice 9316 | J14 | $ 850.00 | $ 850.00 | |
NAME: GPS | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
May 20 | Invoice 9314 | J14 | $ 580.00 | $ 580.00 | |
May 29 | J14 | $ 580.00 | $ 0.00 | ||
NAME: MFD | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
May 24 | Invoice 9315 | J14 | $ 480.00 | $ 480.00 | |
May 27 | Credit Memorandum 101 | J14 | $ 48.00 | $ 432.00 | |
NAME: OCF | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
May 1 | Balance | ✔ | $ 1,200.00 | ||
May 4 | J12 | $ 1,200.00 | $ 0.00 |
Table (7)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER | |||||
NAME: RF | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
May 8 | Invoice 9313 | J13 | $ 1,500.00 | $ 1,500.00 | |
May 14 | Credit Memorandum 109 | J13 | $ 200.00 | $ 1,300.00 | |
May 17 | J13 | $ 1,300.00 | $ 0.00 | ||
NAME: WLF | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
May 1 | Balance | $ 2,900.00 | |||
May 19 | J13 | $ 2,900.00 | $ 0.00 | ||
May 30 | Invoice 9317 | J14 | $ 1,200.00 | $ 1,200.00 |
Table (8)
Prepare the Schedule of Accounts Receivable:
Company TUF | |
Schedule of Accounts Receivable | |
May 31, 2019 | |
Particulars | Amount ($) |
AF | $ 0.00 |
CFS | $ 850.00 |
GPS | $ 0.00 |
MFD | $ 432.00 |
OCF | $ 0.00 |
RF | $ 0.00 |
WLF | $ 1,200.00 |
Total accounts receivable | $ 2,482.00 |
Table (9)
The total amount of sales before allowances, returns or discounts is $5,060.
Working notes (10):
Calculate the total sales:
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