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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Bell Florists sells flowers on a retail basis. Most of the sales are for cash; however, a few steady customers have credit accounts. Bell’s sales staff fills out a sales slip for each sale. There is a state retail sales tax of 5 percent, which is collected by the retailer and submitted to the state. The balances of the accounts as of March 1 have been recorded in the general ledger in your Working Papers or in CengageNow. The following represent Bell Florists’ charge sales for March:

Mar. 4    Sold potted plant on account to C. Morales, sales slip no. 242, $27, plus sales tax of $1.35, total $28.35.

6    Sold floral arrangement on account to R. Dixon, sales slip no. 267, $54, plus sales tax of $2.70, total $56.70.

12    Sold corsage on account to B. Cox, sales slip no. 279, $16, plus sales tax of $0.80, total $16.80.

16    Sold wreath on account to All-Star Legion, sales slip no. 296, $104, plus sales tax of $5.20, total $109.20.

18    Sold floral arrangements on account to Tucker Funeral Home, sales slip no. 314, $260, plus sales tax of $13, total $273.

21    Tucker Funeral Home complained about a wrinkled ribbon on the floral arrangement. Bell Florists allowed a $30 credit plus sales tax of $1.50, credit memo no. 27.

23    Sold flower arrangements on account to Price Savings and Loan Association for its fifth anniversary, sales slip no. 337, $180, plus sales tax of $9, total $189.

24    Allowed Price Savings and Loan Association credit, $25, plus sales tax of $1.25, because of a few withered blossoms in floral arrangements, credit memo no. 28.

Required

  1. 1. Record these transactions in the general journal.*
  2. 2. Post the amounts from the general journal to the general ledger and accounts receivable ledger: Accounts Receivable 113, Sales Tax Payable 214, Sales 411, Sales Returns and Allowances 412.
  3. 3. Prepare a schedule of accounts receivable and compare its total with the balance of the Accounts Receivable controlling account.

1.

To determine

Prepare journal entry to record the given transaction.

Explanation

Merchandise Inventory:

Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a trader, to be sold within a year. Merchandise Inventory is a current asset account which includes all the costs incurred to acquire merchandise, and process it further for sale.

Date Account Titles and explanation Post.Ref Debit ($) Credit ($)
March 4 Accounts receivable 113 28.35  
      Sales 411   27.00
      Sales tax payable 214   1.35
  (To record the sale of merchandise to Company M, sales slip no.242)      
         
March 6 Accounts receivable 113 56.70  
      Sales 411   54.00
      Sales tax payable 214   2.70
  (To record the sale of merchandise to Company D, sales slip no.267)      
         
March 12 Accounts receivable 113 16.80  
      Sales 411   16.00
      Sales tax payable 214   0.80
  (To record the sale of merchandise to Company B, sales slip no.279)      
         
March 16 Accounts receivable 113 109.20  
      Sales 411   104.00
      Sales tax payable 214   5...

2.

To determine

Post the transaction to the general ledger.

3.

To determine

Prepare Company B’s schedule of accounts receivable and compare the total with accounts receivable controlling ledger.

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