Question

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These transactions need to be journalized in the following accounts: Cash, Accounts Receivable, Inventory, Store Supplies, Office Supplies, Office Equipment, Notes Payable, Accounts Payable, F. Stone, Capital, Sales, Sales Discounts, Costs of Goods Sold, and Sales Salaries Expense.

- Also need the following accounts receivable ledger accounts: Carl Cole, Dale Dent, and Gary Glen.

- Open the following accounts payable ledger accounts: Able Company, Best Company, More Company, and Old Company.

- Enter transactions in a Sales Journal, a Purchase Journal, a Cash Receipts Journal, a Cash Disbursements Journal, and a General Journal.

- Prepare trial balance and prove the subsidiary by preparing schedules of accounts receivable and payable.

Demonstration Problem Chapter 5 Bedrock Company completed these transactions during February of the current year: Owner, F. Stone invested $100,000 cash in the business. Feb 1 Sent Flint Company check No. 413 for a cash purchase of inventory $ 75,000. 1 2 Sold inventory costing $500 on credit to Dale Dent for $800, Invoice No. 711. (Terms of all credit sales are 2/10, n/60.) 3 Received inventory and an invoice dated January 30, terms 2/10, n/60, from Able Company, $1,750. Sold inventory costing $850 on credit to Gary Glen for $1,250, Invoice No. 712. 4 Purchased on credit from Best Company inventory, $1,855; store supplies, $75; and office supplies, $35. Invoice dated February 4, terms n/10, EOM. 5 7 Borrowed $5,000 by giving First National Bank a promissory 9 Purchased office equipment on credit from More Company, 9 Sent Able Company Check No. 414 in payment of its January 11 Sold inventory costing $1,000 on credit to Carl Cole for $1,650 12 Received payment from Dale Dent of the February 2 sale less 14 Received payment from Gary Glen of the February 4 sale less note payable. invoice dated February 6, terms n/10, EOM, $625. 30 invoice less the discount. Invoice No. 713. the discount. the discount. 14 Received inventory and an invoice dated February 11, terms 2/10, n/60, from Old Company, $1,985. Feb. 14 Issued Check No. 415, payable to Payroll, in payment of sales salaries for the first half of the month, $855. Cashed the check and paid the employees. 14 Cash sales for the first half of the month, $18,460. Cost of this merchandise was $9,500. (Normally, cash sales are recorded daily; they are recorded only twice in this problem to reduce the number of repetitive entries.) 14 Post to the customer and creditor accounts and also post any amounts that should be posted as individual amounts to the general ledger accounts. (Normally, such items are posted daily; but you are asked to post them only twice in this problem.) Purchased inventory on credit from Best Company, $410; store supplies, $45; and office supplies, $30. Invoice dated February 12, terms n/10, EOM. 16 Received a credit memorandum from Old Company for unsatisfactory inventory received on February 14 and returned for credit, $85. 17 Received a credit memorandum from More Company for office equipment received on February 9 and returned for credit, $130. 18 Received payment from Carl Cole for the sale of February 11 less the discount. 21 Issued Check No. 416 to Old Company in payment of its invoice of February 11 less the return and the discount 21 Sold inventory costing $475 on credit to Carl Cole for $835, Invoice No. 714. 24 Sold inventory costing $375 on credit to Gary Glen for $775, Invoice No. 715. 26 Issued Check No. 417, payable to Payroll, in payment of sales salaries for the last half of the month, $855. Cashed the check and paid the employees. 28 28 Cash sales for the last half of the month, $20,215. Cost of this merchandise was $ 11,500. Post to the customer and creditor accounts and post any amounts that should be posted as individual amounts to general ledger accounts. Foot and crossfoot the journals and make the month-end postings Feb 28 28 Required: 1. Open the following general ledger accounts: Cash, Accounts Receivable, Inventory, Store Supplies, Office Supplies, Office Equipment, Notes Payable, Accounts Payable, F. Stone, Capital, Sales, Sales Discounts, Cost of Goods Sold, and Sales Salaries Expense 2. Open the following accounts receivable ledger accounts: Carl Cole, 3. Open the following accounts payable ledger accounts: Able 4. Enter the transactions in a Sales Journal, a Purchases Journal, a Dale Dent, and Gary Glen. Company, Best Company, More Company, and Old Company. Cash Receipts Journal, a Cash Disbursements Journal, and a General Journal similar to the ones illustrated in this chapter. Post when instructed to do so. 5. Prepare a trial balance and prove the subsidiary ledgers by preparing schedules of accounts receivable and payable.

Answer 1

1 Cash Account Cr Dr Date Feb Amount Particulars Amount Date Particulars 75000 1715 855 1862 855 1 Inventory A/C 100000 5000 784 1250 18460 1650 20215 1 To Capital A/C 7 To Notes Payable A/C 12 To Dale Dent A/C 14 To Gary Glen A/C 14 To Sales A/C 21 TO Carl Cole A/C 28 To Sales A/C Able Company A/C 14 Sales Salaries Exp A/C 21 Old Company 28 Sales Salaries Exp A/C 67072 Balance 147359 147359 Capital Account Amount Particulars Amount Date Particulars Date Feb Feb 100000 1 Cash A/C 100000 Balance 100000 100000 Inventory Account Amount Particulars Amount Date Particulars Date Feb 81000 Balance To Cash A/C 3 To Able Company S To Best Company A/C 14 To Old Company A/C 16 To Best Company A/C 75000 1750 1855 1985 410 81000 81000

1 Cash Account Cr Dr Date Feb Amount Particulars Amount Date Particulars 75000 1715 855 1862 855 1 Inventory A/C 100000 5000 784 1250 18460 1650 20215 1 To Capital A/C 7 To Notes Payable A/C 12 To Dale Dent A/C 14 To Gary Glen A/C 14 To Sales A/C 21 TO Carl Cole A/C 28 To Sales A/C Able Company A/C 14 Sales Salaries Exp A/C 21 Old Company 28 Sales Salaries Exp A/C 67072 Balance 147359 147359 Capital Account Amount Particulars Amount Date Particulars Date Feb Feb 100000 1 Cash A/C 100000 Balance 100000 100000 Inventory Account Amount Particulars Amount Date Particulars Date Feb 81000 Balance To Cash A/C 3 To Able Company S To Best Company A/C 14 To Old Company A/C 16 To Best Company A/C 75000 1750 1855 1985 410 81000 81000

Inventory Return Account Amount Particulars Amount Date Particulars Date 17 Old Company A/C 85 85 Balance 85 85 Store Supplies Account Dr Date Feb Particulars Amount Amount Date Particulars 120 75 45 Balance 5 To Best Company A/C 16 To Best Company A/C 120 120 Office Supplies Account Cr Dr Date Feb Particulars Amount Amount Date Particulars 65 35 30 Balance 5 To Best Company A/C 16 To Best Company A/C 65 65 Office Equipment Account Particulars Amount Particulars Amount Date Date Feb 130 495 18 More Company A/C 9 To More Company A/C 625 Balance 625 625

Notes Payable Account Dr. Date Feb Particulars Amount Particulars Amount Date 7 Cash A/C 5000 5000 Balance 5000 5000 Accounts Payable Account Dr Date Feb Particulars Amount Date Amount Particulars Best Compan More Company 2450 495 2945 Balance 2945 2945 les Account Dr. Particulars Amount Amount Date Particulars Date 800 1250 1650 18460 835 775 20215 43985 43985 2 Dale Dent AC Balance 4 Gary Glen A/C 11 Carl Cole A/C 14 Cash A/C 24 Carl Cole A/C 26 Gary Glen A/C 28 Cash A/C 43985 Sales Discounts Account Dr Date Feb Particulars Amount Particulars Amount Date 12 Dale Dent Balance 16 16 16 16 Sales Salaries Account Dr. Date Feb.: Particulars Amount Particulars Amount Date 14 To Cash A/C 28 To Cash A/C 855 855 Balance 1710 1710 1710 Accounts Receivable Account Dr Date Fcb Particulars Amount Particulars Amount Date Carl Cole Gary Glen 1610 835 775 Balance 1610 1610

Carl Cole Account Dr Date Feb Particulars Amount Particulars Amount Date 21 Cash A/C 1650 1650 11 To Sales A/C 24 To Sales A/C 835 835 Accounts Receivable 2485 2485 Dale Dent Account Dr. Date Feb Particulars Amount Particulars Amount Date /84 16 2 To Sales A/C 12 Cash AC 12 Sales Discount 800 800 800 Gary Glen Account Dr Date Feb Particulars Amount Date Amount Particulars 1250 775 14 Cash A/C 1250 4 To Sales A/C 26 To Sales A/C Accounts Receivable 775 2025 2025 Able Company Account Dr Date Feb. Particulars Amount Particulars Amount Date 9 To Cash A/C 3 Inventory A/C 1750 1715 35 Purchase Discount 1750 1750

Best Company Account Particulars Amount Particulars Amount Date Date 5 Inventory A/C 1855 75 35 110 45 30 2450 Accounts Payable 2450 5 Stores Supplies A/C Office Supplies A/C 16 Inventory A/C 16 Stores Supplies A/C 16 Office Supplies A/C 2450 More Company Account Dr Date Feb Particulars Amount Particulars Amount Date 9 Office Equipment A/C 18 TO Office Equipment 625 130 495 Accounts Payable 625 625 ld Company Account Dr Date Feb Particulars Particulars Amount Date Amount 14 Inventory A/C 17 To Inventory Return A/ 21 To Cash A/C 85 1862 38 1985 Purchase Discount 1985 1985

Trial Balance Cr. 67072 Cash Capital Inventory Inventory Return Store Supplies Office Supplies Office Equipment Notes Payable Accounts Payable Sales Sales Discount Purchase Discount Sales Salaries Account Receivable 100000 81000 85 120 65 495 5000 2945 43985 16 73 1710 1610 152088 152088 Accounts Receivable: 835 775 1610 Carl Cole Gary Glen Total Accounts Payable: 2450 49 2945 Best Compan More Company Total

Feb 100000 1 Cash A/C Dr To Capital A/C 100000 1 nventory A/C To Cash A/C Dr 75000 75000 2 Dale Dent A/C To Sales A/C Dr 800 800 3 Inventory A/C 1750 To Able Company 1750 4 Gary Glen A/C To Sales A/C 1250 1250 5 Inventory A/C 1855 75 35 Stores Supplies A/C Office Supplies A/C To Best Company A/C Dr 1965 7 Cash A/C 5000 To Notes Payable A/C 5000 9 Office Equipment A/C To More Company A/C 625 625 9 Able Company A/C Dr 1715 To Cash A/C 1715 11 Carl Cole A/C To Sales A/C 1650 1650 12 Cash A/C Dr 784 To Dale Dent A/C 784 14 Cash A/C Dr 1250 To Gary Glen A/C 1250 14 Inventory A/C Dr 1985 To Old Company A/C 1985 Sales Salaries Expenses A/C To Cash A/C 855 14 Dr 855

14 Cash A/C Dr 18460 18460 To Sales A/C 410 45 30 16 Inventory A/C IDr Stores Supplies A/C Office Supplies A/C To Best Company A/C Dr 485 85 17 Old Company A/C To Inventory Return A/C Dr 85 18 More Company A/C TO Office Equipment A/C Dr 130 130 21 Cash A/C Dr 1650 TO Carl Cole A/C 1650 21 Old Company A/OC Dr 1862 To Cash A/C 1862 24 Carl Cole A/C To Sales A/C Dr 835 835 26 Gary Glen A/C To Sales A/C Dr 775 775 28 Sales Salaries Expenses A/C To Cash A/C Dr 855 855 28 Cash A/C Dr 20215 20215 To Sales A/C

14 Cash A/C Dr 18460 18460 To Sales A/C 410 45 30 16 Inventory A/C IDr Stores Supplies A/C Office Supplies A/C To Best Company A/C Dr 485 85 17 Old Company A/C To Inventory Return A/C Dr 85 18 More Company A/C TO Office Equipment A/C Dr 130 130 21 Cash A/C Dr 1650 TO Carl Cole A/C 1650 21 Old Company A/OC Dr 1862 To Cash A/C 1862 24 Carl Cole A/C To Sales A/C Dr 835 835 26 Gary Glen A/C To Sales A/C Dr 775 775 28 Sales Salaries Expenses A/C To Cash A/C Dr 855 855 28 Cash A/C Dr 20215 20215 To Sales A/C