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Sales and Purchases Ms. Valli of All About You Spa has decided to expand her business by adding two lines of merchandise—a selection of products used in the salon for the body, the feet, and the face, as well as logo mugs, T-shirts, and baseball caps that can provide advertising benefits. She believes she will be able to increase her profits significantly. July Journal Entries So that you can complete the journal entries for the month of July, Ms. Valli has also left the information you will need and directions on how to proceed. Note that with the expansion of the business into merchandising, new accounts have been added to the chart of accounts. For example, an additional revenue account, Merchandise Sales, is needed. Because All About You Spa now needs a Purchases account, the chart of accounts needs to be modified as follows: The 500–599 range is used for the purchase-related accounts (for example, Purchases 511 and Freight In 515). Your new chart of accounts is as follows: CHART OF ACCOUNTS FOR ALL ABOUT YOU SPA Also note that because you will be making purchases on account and sales on account, subsidiary ledgers will be needed to track what is due from individual customers and owed to individual vendors. A listing of customers and vendors with current balances are as follows: Checkbook Register Purchases Invoices for Merchandise Bought on Account During July All About You Spa will pay all freight costs associated with purchases of merchandise to the supplier. Use the new accounts Purchases 511 and Freight In 515. Sales Invoices for Gift Certificates Sold on Account During July All About You Spa is responsible for collecting and paying the sales tax on merchandise that it sells. The sales tax rate where All About You Spa does business is 8 percent of each sale (for example, $340.00 × 0.08 = $27.20). Note: All gift certificates were redeemed for merchandise by the end of the month. Other July Transactions There were five other transactions in July. None involved cash. Required 1. Journalize the transactions for July (in date order). Ask your instructor whether you should use the special journals or the general journal for this problem. If you are preparing the journal entries using Working Papers, enter your transactions beginning on page 6. 2. Post the entries to the accounts receivable, accounts payable, and general ledgers. Ignore this step if you are using CLGL. 3. Prepare a trial balance as of July 31, 20--. 4. Prepare a schedule of accounts receivable as of July 31, 20--. 5. Prepare a schedule of accounts payable as of July 31, 20--.

BuyFind

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
Publisher: South-Western College Pub
ISBN: 9781337280570
BuyFind

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
Publisher: South-Western College Pub
ISBN: 9781337280570

Solutions

Chapter
Section
Chapter 9, Problem 1CP
Textbook Problem

Sales and Purchases

Ms. Valli of All About You Spa has decided to expand her business by adding two lines of merchandise—a selection of products used in the salon for the body, the feet, and the face, as well as logo mugs, T-shirts, and baseball caps that can provide advertising benefits. She believes she will be able to increase her profits significantly.

July Journal Entries

So that you can complete the journal entries for the month of July, Ms. Valli has also left the information you will need and directions on how to proceed.

Note that with the expansion of the business into merchandising, new accounts have been added to the chart of accounts. For example, an additional revenue account, Merchandise Sales, is needed. Because All About You Spa now needs a Purchases account, the chart of accounts needs to be modified as follows: The 500–599 range is used for the purchase-related accounts (for example, Purchases 511 and Freight In 515). Your new chart of accounts is as follows:

CHART OF ACCOUNTS FOR ALL ABOUT YOU SPA

Chapter 9, Problem 1CP, Sales and Purchases Ms. Valli of All About You Spa has decided to expand her business by adding two , example  1

Also note that because you will be making purchases on account and sales on account, subsidiary ledgers will be needed to track what is due from individual customers and owed to individual vendors. A listing of customers and vendors with current balances are as follows:

Chapter 9, Problem 1CP, Sales and Purchases Ms. Valli of All About You Spa has decided to expand her business by adding two , example  2

Checkbook Register

Chapter 9, Problem 1CP, Sales and Purchases Ms. Valli of All About You Spa has decided to expand her business by adding two , example  3

Chapter 9, Problem 1CP, Sales and Purchases Ms. Valli of All About You Spa has decided to expand her business by adding two , example  4

Purchases Invoices for Merchandise Bought on Account During July

All About You Spa will pay all freight costs associated with purchases of merchandise to the supplier. Use the new accounts Purchases 511 and Freight In 515.

Chapter 9, Problem 1CP, Sales and Purchases Ms. Valli of All About You Spa has decided to expand her business by adding two , example  5

Sales Invoices for Gift Certificates Sold on Account During July

All About You Spa is responsible for collecting and paying the sales tax on merchandise that it sells. The sales tax rate where All About You Spa does business is 8 percent of each sale (for example, $340.00 × 0.08 = $27.20).

Chapter 9, Problem 1CP, Sales and Purchases Ms. Valli of All About You Spa has decided to expand her business by adding two , example  6

Note: All gift certificates were redeemed for merchandise by the end of the month.

Other July Transactions

There were five other transactions in July. None involved cash.

Chapter 9, Problem 1CP, Sales and Purchases Ms. Valli of All About You Spa has decided to expand her business by adding two , example  7

Required

  1. 1. Journalize the transactions for July (in date order). Ask your instructor whether you should use the special journals or the general journal for this problem.
    • If you are preparing the journal entries using Working Papers, enter your transactions beginning on page 6.
  2. 2. Post the entries to the accounts receivable, accounts payable, and general ledgers.
    • Ignore this step if you are using CLGL.
  3. 3. Prepare a trial balance as of July 31, 20--.
  4. 4. Prepare a schedule of accounts receivable as of July 31, 20--.
  5. 5. Prepare a schedule of accounts payable as of July 31, 20--.

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Chapter 9 Solutions

College Accounting (Book Only): A Career Approach
Show all chapter solutions
Ch. 9 - What is the difference between a wholesale...Ch. 9 - For each of the following accounts, identify...Ch. 9 - What is the purpose of each of the following? a....Ch. 9 - Why is an accounts receivable ledger or an...Ch. 9 - Why is it a good practice to post daily to the...Ch. 9 - With regard to goods sold and purchased, explain...Ch. 9 - Explain the meaning and importance of the shipping...Ch. 9 - Describe the four procedures that most companies...Ch. 9 - Describe the posting procedures to the general...Ch. 9 - Describe the procedure for posting each of the...Ch. 9 - Who issues a credit memorandum and why?Ch. 9 - What is the difference between a periodic...Ch. 9 - Record the following transactions in general...Ch. 9 - Post the following entry to the general ledger and...Ch. 9 - Record the following transactions in general...Ch. 9 - Journalize the following transactions in general...Ch. 9 - Post the following entry to the general ledger and...Ch. 9 - Record the following transactions in general...Ch. 9 - Record the following transactions for a perpetual...Ch. 9 - Toby Company had the following sales transactions...Ch. 9 - Williams Corporation had the following purchases...Ch. 9 - Kelley Company has completed the following October...Ch. 9 - Bell Florists sells flowers on a retail basis....Ch. 9 - Berrys Pet Store records purchase transactions in...Ch. 9 - Shirleys Beauty Store records sales and purchase...Ch. 9 - The following transactions relate to Hawkins,...Ch. 9 - Gomez Company sells electrical supplies on a...Ch. 9 - Patterson Appliance uses a three-column purchases...Ch. 9 - Abbott Florists sells flowers on a retail basis....Ch. 9 - Lowerys Pet Depot records purchase transactions in...Ch. 9 - Mays Beauty Store records sales and purchase...Ch. 9 - The following transactions relate to Khan, Inc., a...Ch. 9 - R. J. Hinton Company sells electrical supplies on...Ch. 9 - West Bicycle Shop uses a three-column purchases...Ch. 9 - Jax Mercantile Co. has been northern Colorados...Ch. 9 - You are the bookkeeper at a small merchandising...Ch. 9 - Following is a trial balance prepared just before...Ch. 9 - Sales and Purchases Ms. Valli of All About You Spa...

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