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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

Abbott Florists sells flowers on a retail basis. Most of the sales are for cash; however, a few steady customers have credit accounts. Abbott’s sales staff fills out a sales slip for each sale. There is a state retail 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. Abbott Florists’ charge sales for March are as follows:

Mar. 4    Sold floral arrangement on account to R. Duarte, sales slip no. 236, $45, plus sales tax of $2.25, total $47.25.

7    Sold potted plant on account to C. Meadows, sales slip no. 272, $61, plus sales tax of $3.05, total $64.05.

12    Sold wreath on account to Anthony Realty, sales slip no. 294, $63, plus sales tax of $3.15, total $66.15.

17    Sold floral arrangements on account to Travis Dress Shop, sales slip no. 299, $170, plus sales tax of $8.50, total $178.50.

20    Travis Dress Shop returned a flower spray, complaining that there were dead blooms. Abbott Florists allowed a credit of $36, plus sales tax of $1.80, credit memo no. 27.

21    Sold flower arrangements on account to Porter Computers for its anniversary, sales slip no. 310, $236, plus sales tax of $11.80, total $247.80.

22    Allowed Porter Computers credit, $25, plus sales tax of $1.25, because of withered blossoms in floral arrangements, credit memo no. 28.

27    Sold corsage on account to B. Crosby, sales slip no. 332, $30, plus sales tax of $1.50, total $31.50.

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 47.25  
       Sales 411   45.00
       Sales tax payable 214   2.25
  (To record the sale of merchandise to Company D,  sales slip no.236)      
         
March 7 Accounts receivable 113 64.05  
       Sales 411   61.00
       Sales tax payable 214   3.05
  (To record the sale of merchandise to Company C, sales slip no.272)      
         
March 12 Accounts receivable 113 66.15  
       Sales 411   63.00
       Sales tax payable 214   3.15
  (To record the sale of merchandise to Company A, sales slip no.294)      
         
March 17 Accounts receivable 113 178.50  
       Sales 411   170.00
       Sales tax payable 214   8...

2.

To determine

Post the transaction to the general ledger.

3.

To determine

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

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