CHAPTER 7
ACCOUNTING FOR SALES, ACCOUNTS RECEIVABLE, AND CASH
RECEIPTS
Chapter Opener: Thinking Critically
Students should recognize that technology is an important factor in the success of a merchant like indi. As a direct
merchant, indi customers shop directly with them — from home or office, by phone, mail, fax, or Web. They ship
directly to their customers. Their direct merchant method of doing business makes shopping simpler, faster, and more
convenient.
Fast Facts
Once an order is generated, indi creates a customized garment and ships it to the customer for free within 4 weeks.
•
•
All orders come with a Perfect Fit Promise and Worry-Free Shopping Guarantee, which promises fit adjustments
until 100% satisfaction or customer’s money back.
•
•
The average price for a pair of indi jeans is $185.
indiTailored – sister company to indi– offers customers in search of the perfect dress shirt the same customization,
fit and delivery options as indi.
Discussion Questions
These questions are designed to check students’ understanding of new terms, concepts, and procedures presented
in the chapter.
1.
Retail: sell goods directly to consumers. Wholesale: sell goods to retailers.
2.
Prove balances, summarize receivables.
3.
Subtract balances of Sales Returns and Allowances from balance of Sales.
4.
Separate record of returns and allowances.
5.
Contra revenue account.
6.
Contra revenue account.
7.
Time of sale; Sales Tax Payable.
8.
Divide total of Sales account by 105 percent, multiply by sales tax rate.
9.
a. Debit Accounts Receivable, credit Sales, b. Debit Accounts Receivable from Credit Card Companies, credit
10. Summaries of credit card sales submitted to the credit card company for payment.
11. The credit card company.
12. Credit Card Expense account.
13. No responsibility for collecting cash from customer exists.
14. Purchase amount to be paid at a later date.
15. A reduction from the list price, offered by wholesalers; attracts customers.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.1
Cr Sales
Dr Sales Returns and Allowances
Dr Sales Discounts
Chapter 7
Dr Credit Card Expense
Cr Sales Tax Payable
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.2
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
Post
Ref.
1 2013
2 June 5 Accounts Receivable
3
Sales
4
Sold merchandise on account to Mahonga Company,
5
Sales Slip 1200, terms n/30
6
7
15 Cash
8
Sales
9
Recorded cash sales
10
11
30 Cash
12
Accounts Receivable
13
Received cash from Mahonga Company on account
14
DEBIT
8 7 5 00
1 8 4 0 00
8 7 5 00
1
CREDIT
1
2
8 7 5 00 3
4
5
6
7
1 8 4 0 00 8
9
10
11
8 7 5 00 12
13
14
EXERCISE 7.3
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 May 1 Accounts Receivable ($1,500 + $120)
3
Sales
4
Sales Tax Payable (8% × $1,500)
5
Sold merchandise on credit to Bill Walker,
6
Sales Slip 1015, terms n/30
7
8
15 Cash ($3,800 + $304)
9
Sales
10
Sales Tax Payable (8% x $3,800)
11
Recorded cash sales
12
13
31 Cash
14
Accounts Receivable
15
Received payment on account from Bill Walker
16
Chapter 7
Post
Ref.
DEBIT
1
CREDIT
1 6 2 0 00
1 5 0 0 00
1 2 0 00
4 1 0 4 00
3 8 0 0 00
3 0 4 00
1 6 2 0 00
1 6 2 0 00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.4
PAGE
GENERAL JOURNAL
DATE
1 2013
2 April 2
3
4
5
6
7
3
8
9
10
11
12
4
13
14
15
16
17
18
6
19
20
21
22
23
24
25
30
26
27
28
29
Chapter 7
DESCRIPTION
Post
Ref.
Cash ($1,000 + $80)
Sales
Sales Tax Payable (8% × $1,000)
Recorded cash sales
DEBIT
CREDIT
1 0 8 0 00
1 0 0 0 00
8 0 00
Sales Returns and Allowances
Sales Tax Payable (8% × $100)
Cash ($100 + $8)
Recorded sales return
1 0 0 00
8 00
Accounts Receivable ($550 + $44)
Sales
Sales Tax Payable ($550 × 8%)
Sold merchandise on credit to Tisha Lee,
Sales Slip 908, terms n/30
5 9 4 00
1 0 8 00
5 5 0 00
4 4 00
Sales Returns and Allowances
Sales Tax Payable (8% × $50)
Accounts Receivable ($50 + $4)
Accept a return of defective merchandise, Credit
Memorandum 302; original sale made on
Sales Slip 908 to Tisha Lee on April 4
Cash ($594 - $54)
Accounts Receivable
Received cash from Tisha Lee, after deducting
Credit Memorandum 302
1
5 0 00
4 00
5 4 00
5 4 0 00
5 4 0 00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.5
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
Post
Ref.
1 2013
2 Feb. 2 Credit Card Expense ($2,800 + $224) × 3%
3
Cash ($2,800 + $224 - $90.72)
4
Sales
5
Sales Tax Payable ($2,800 × 8%)
6
Record sales to customers using bank credit cards
7
8
15 Accounts Receivable ($1,600 + $128)
9
Sales
10
Sales Tax Payable ($1,600 × 8%)
11
Record sales to customers using American Express
12
13
20 Credit Card Expense ($1,728 × 4%)
14
Cash ($1,728 - $69.12)
15
Accounts Receivable
16
Record payment received from American Express
17
Chapter 7
DEBIT
1
CREDIT
9 0 72
2 9 3 3 28
2 8 0 0 00
2 2 4 00
1 7 2 8 00
1 6 0 0 00
1 2 8 00
6 9 12
1 6 5 8 88
1 7 2 8 00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.6
1.
2.
3.
$378 ($540 × 30% = $162; $540 - $162 = $378)
$512 ($640 × 20% = $128; $640 - $128 = $512)
$132 ($220 × 40% = $88; $220 - $88 = $132)
EXERCISE 7.7
1.
2.
3.
List price
Less first discount ($3,500 × 25%)
$3,500.00
875.00
Difference
Less second discount ($2,625×15%)
$2,625.00
393.75
Invoice price
$2,231.25
List price
Less first discount ($4,200 × 25%)
$4,200.00
1,050.00
Difference
Less second discount ($3,150× 15%)
$3,150.00
472.50
Invoice price
$2,677.50
List price
Less first discount $2,550 × 20%)
$2,550.00
510.00
Difference
Less second discount ($2,040 × 10%)
$2,040.00
204.00
Invoice price
$1,836.00
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.8
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
Post
Ref.
1 2013
2 April 1 Accounts Receivable
3
Sales
4
Sold merchandise on account to Fronke's
5
Franks, Invoice 1001, terms 2/10, n30.
6
7
10 Sales Discounts (2% × $2,000)
8
Cash ($2,000 - $40 discount)
9
Accounts Receivable
10
Received payment from Fronke's Franks for
11
Invoice 1001, dated April 1.
12
13
DEBIT
2 0 0 0 00
4 0 00
1 9 6 0 00
14
CREDIT
1
2
2 0 0 0 00 3
4
5
6
7
8
2 0 0 0 00 9
10
11
12
13
EXERCISE 7.9
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 Jan. 8 Cash
3
Accounts Receivable/John Gibrone
4
5
6
7
8
9
10
11
12
13
Chapter 7
Post
Ref.
DEBIT
✔
✔
4
5
6
7
8
1 0 8 00 9
Received partial payment on account from
John Gibrone
20 Sales Returns and Allowances
Sales Tax Payable
Accounts Receivable/Jim Garcia
Accept return of defective merchandise, Credit
Memorandum 121; original sale made on Sales
Slip 11102 of December 27, 2012
1 0 0 00
8 00
111
CREDIT
1
2
5 4 0 00 3
5 4 0 00
111
40
10
11
12
13
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.9 (continued)
GENERAL LEDGER
ACCOUNT NO. 111
ACCOUNT Accounts Receivable
DATE
DESCRIPTION
2013
Jan. 1 Balance
8
20
Post
Ref.
DEBIT
CREDIT
✔
J40
J40
5 4 0 00
1 0 8 00
BALANCE
DEBIT
CREDIT
8 6 4 0 00
8 1 0 0 00
7 9 9 2 00
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Jim Garcia
ADDRESS
DATE
DESCRIPTION
2013
Jan. 1 Balance
20
Post
Ref.
DEBIT
✔
J40
CREDIT
1 0 8 00
BALANCE
2 1 6 0 00
2 0 5 2 00
NAME John Gibrone
ADDRESS
DATE
DESCRIPTION
2013
Jan. 1 Balance
8
Post
Ref.
DEBIT
✔
J40
CREDIT
5 4 0 00
BALANCE
5 4 0 0 00
4 8 6 0 00
NAME June Lin
ADDRESS
DATE
2013
Jan. 1 Balance
Chapter 7
DESCRIPTION
Post
Ref.
✔
DEBIT
CREDIT
BALANCE
1 0 8 0 00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.10
1.
Calderone Company
Schedule of Accounts Receivable
January 31, 2013
Jim Garcia
John Gibrone
June Lin
Total
2
4
1
7
0
8
0
9
5
6
8
9
2
0
0
2
00
00
00
00
2. Yes, they should be equal. The balance of the Accounts Receivable control account is also $7,992.00.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.1A
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
Post
Ref.
1 2013
2 March 1 Accounts Receivable/Dave Allen ($550 + $33)
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
Chapter 7
111
Sales
Sales Tax Payable ($550 × 6%)
Sold merchandise on credit to Dave Allen,
Sales Slip 101
111
Sales
Sales Tax Payable ($900 × 6%)
Sold merchandise on credit to Castor Phan,
Sales Slip 102
25 Accounts Receivable/Brian Cooley ($850 + $51)
Sales
Sales Tax Payable ($850 × 6%)
Sold merchandise on credit to Brian Cooley,
Sales Slip 104
28 Cash
Accounts Receivable/Castor Phan
Received partial payment on account from
Castor Phan
1
2
9 5 4 00
5 5 0 00 3
3 3 00 4
5
6
7
8
1 1 5 5 40
9 0 0 00 9
5 4 00 10
11
12
13
14
401
221
12 Accounts Receivable/Chris Hughes ($1,090 + $65.40)
15 Cash ($6,600 + $396)
Sales
Sales Tax Payable ($6,600 × 6%)
Record cash sales, March 1-15
✔
111
✔
401
221
101
401
221
111
✔
6 9 9 6 00
9 0 1 00
401
221
101
111
✔
CREDIT
5 8 3 00
401
221
4 Accounts Receivable/Castor Phan ($900 + $54)
Sales
Sales Tax Payable ($1,090 × 6%)
Sold merchandise on credit to Chris Hughes,
Sales Slip 103
✔
DEBIT
1
1 2 0 00
1 0 9 0 00 15
6 5 40 16
17
18
19
20
6 6 0 0 00 21
3 9 6 00 22
23
24
25
8 5 0 00 26
5 1 00 27
28
29
30
31
1 2 0 00 32
33
34
35
36
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.1A (continued)
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
Post
Ref.
1 2013
2 March 31 Cash ($3,500 + $210)
3
Sales
4
Sales Tax Payable ($3,500 × 6%)
5
Record cash sales, March 16 - 31
6
7
31 Cash
8
Accounts Receivable/Dave Allen
9
10
Chapter 7
101
401
221
3 7 1 0 00
101
5 8 3 00
111
Received full payment on account from Dave Allen
DEBIT
✔
2
CREDIT
1
2
3 5 0 0 00 3
2 1 0 00 4
5
6
7
5 8 3 00 8
9
10
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.1A (continued)
GENERAL LEDGER
ACCOUNT NO. 101
ACCOUNT Cash
DATE
DESCRIPTION
2013
March 15
28
31
31
Post
Ref.
J1
J1
J2
J2
DEBIT
6 9
1
3 7
5
9
2
1
8
CREDIT
6
0
0
3
BALANCE
DEBIT
CREDIT
00
00
00
00
6
7
10
11
9
1
8
4
DESCRIPTION
2013
March 1
4
12
25
28
31
Post
Ref.
J1
J1
J1
J1
J1
J2
DEBIT
5
9
1 1
9
8
5
5
0
CREDIT
2013
March 1
4
12
15
25
31
Chapter 7
DESCRIPTION
00
00
00
00
3
4
5
1
BALANCE
DEBIT
CREDIT
00
00
40
00
1 2 0 00
5 8 3 00
1
2
3
3
2
5
5
6
5
4
8
8
3
9
9
7
9
3
7
2
3
3
0
00
00
40
40
40
40
ACCOUNT NO. 221
ACCOUNT Sales Tax Payable
DATE
6
6
6
9
ACCOUNT NO. 111
ACCOUNT Accounts Receivable
DATE
9
1
2
0
Post
Ref.
J1
J1
J1
J1
J1
J2
DEBIT
CREDIT
3
5
6
3 9
5
2 1
3
4
5
6
1
0
BALANCE
DEBIT
CREDIT
00
00
40
00
00
00
1
5
5
8
3
8
5
4
9
0
3
7
2
8
9
9
00
00
40
40
40
40
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.1A (continued)
ACCOUNT NO. 401
ACCOUNT Sales
DATE
2013
March 1
4
12
15
25
31
DESCRIPTION
Post
Ref.
DEBIT
J1
J1
J1
J1
J1
J2
CREDIT
5
9
1 0
6 6
8
3 5
5
0
9
0
5
0
0
0
0
0
0
0
BALANCE
DEBIT
CREDIT
00
00
00
00
00
00
1
2
9
9
13
5
4
5
1
9
4
5
5
4
4
9
9
0
0
0
0
0
0
00
00
00
00
00
00
Analyze: The total cash receipts during March were $11,409.00
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.2A
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 Sept. 1 Accounts Receivable/Candy Cho ($1,400 + $98)
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Chapter 7
Sales
Sales Tax Payable ($1,400 × 7%)
Sold TV on credit to Candy Cho,
Sales Slip 101
3 Accounts Receivable/Jim Peterson ($925 + $64.75)
Sales
Sales Tax Payable ($925 × 7%)
Sold stereo equip. on credit to Jim Peterson,
Sales Slip 102
7 Accounts Receivable/Bridgette Huffman ($320 + $22.40)
Sales
Sales Tax Payable ($320 × 7%)
Sold microwave oven on credit to Bridgette Huffman
Sales Slip 103
12 Sales Returns and Allowances
Sales Tax Payable ($125 × 7%)
Accounts Receivable/Jim Peterson
Post
Ref.
111
✔
DEBIT
✔
1
2
9 8 9 75
1 4 0 0 00 3
9 8 00 4
5
6
7
8
401
221
111
✔
3 4 2 40
401
221
421
221
111
1 2 5 00
8 75
✔
Accepted return of defective merchandise, Credit
Memorandum 101; original sale made on Sales
Slip 102 of September 3
15 Cash ($9,800 + $686)
Sales
Sales Tax Payable ($9,800 × 7%)
Record cash sales, Sept. 1-15
16 Accounts Receivable/Kathy Sundstrand ($650 + $45.50)
Sales
Sales Tax Payable ($650 × 7%)
Sold gas dryer on credit to Kathy Sundstrand,
Sales Slip 104
101
401
221
111
✔
401
221
CREDIT
1 4 9 8 00
401
221
111
1
10 4 8 6 00
6 9 5 50
9 2 5 00 9
6 4 75 10
11
12
13
14
3 2 0 00 15
2 2 40 16
17
18
19
20
21
1 3 3 75 22
23
24
25
26
27
9 8 0 0 00 28
6 8 6 00 29
30
31
32
6 5 0 00 33
4 5 50 34
35
36
37
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.2A (continued)
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 Sept. 17 Accounts Receivable/Mark Navalta ($1,550 + $108.50)
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
Sales
Sales Tax Payable ($1,550 × 7%)
Sold home entertainment system on credit to
Mark Navalta, Sales Slip 105
18 Cash
Accounts Receivable/Candy Cho
Post
Ref.
111
✔
DEBIT
1 6 5 8 50
401
221
101
111
6 0 0 00
✔
Received partial payment on account from
Candy Cho
20 Cash
Accounts Receivable/Jim Peterson
101
111
8 5 6 00
✔
Received payment on account from Jim Peterson
for sale of Sept.3 less return of Sept. 12.
25 Sales Returns and Allowances
Sales Tax Payable ($100 × 7%)
Accounts Receivable/Mark Navalta
421
221
111
1 0 0 00
7 00
✔
Issued Credit Memorandum 102 due to scratches
on home entertainment system
27 Cash
Accounts Receivable/Bridgette Huffman
Sales
Sales Tax Payable ($450 × 7%)
Sold dishwasher on credit to Mark Navalta,
Sales Slip 106
30 Cash
Sales
Sales Tax Payable ($10,250 × 7%)
Record cash sales, Sept. 16 – 30
111
1
2
1 5 5 0 00 3
1 0 8 50 4
5
6
7
8
6 0 0 00 9
10
11
12
13
8 5 6 00 14
15
16
17
18
19
1 0 7 00 20
✔
✔
26
27
28
3 4 2 40
Received payment from Bridgette Huffman
29 Accounts Receivable/Mark Navalta
CREDIT
21
22
23
24
3 4 2 40 25
101
111
2
4 8 1 50
221
101
401
221
10 9 6 7 50
4 5 0 00 29
3 1 50 30
31
32
33
34
10 2 5 0 00 35
7 1 7 50 36
37
38
Analyze: $3,650 /$25,120 = 14.5%; 14.5% of the sales in September were for entertainment items.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.3A
GENERAL LEDGER
ACCOUNT NO. 101
ACCOUNT Cash
DATE
DESCRIPTION
2013
Sept. 15
18
20
27
30
Post
Ref.
J1
J2
J2
J2
J2
DEBIT
10 4
6
8
3
10 9
8
0
5
4
6
CREDIT
6
0
6
2
7
BALANCE
DEBIT
CREDIT
00
00
00
40
50
10
11
11
12
23
4
0
9
2
2
2013
Sept. 1
3
7
12
16
17
18
20
25
27
29
Chapter 7
DESCRIPTION
6
6
2
4
1
00
00
00
40
90
ACCOUNT NO. 111
ACCOUNT Accounts Receivable
DATE
8
8
4
8
5
Post
Ref.
J1
J1
J1
J1
J1
J2
J2
J2
J2
J2
J2
DEBIT
CREDIT
BALANCE
DEBIT
CREDIT
1 4 9 8 00
9 8 9 75
3 4 2 40
1 3 3 75
6 9 5 50
1 6 5 8 50
6
8
1
3
4 8 1 50
0
5
0
4
0
6
7
2
00
00
00
40
1
2
2
2
3
5
4
3
3
3
3
4
4
8
6
3
0
4
5
4
1
6
9
8
3
9
9
5
5
9
8
4
2
8
7
0
6
1
0
0
4
7
5
6
00
75
15
40
90
40
40
40
40
00
50
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.3A (continued)
ACCOUNT NO. 221
ACCOUNT Sales Tax Payable
DATE
2013
Sept.
DESCRIPTION
1
3
7
12
15
16
17
25
29
30
Post
Ref.
DEBIT
J1
J1
J1
J1
J1
J1
J2
J2
J2
J2
CREDIT
BALANCE
DEBIT
CREDIT
9 8 00
6 4 75
2 2 40
8 75
6 8 6 00
4 5 50
1 0 8 50
1
1
1
1
7 00
3 1 50
7 1 7 50
1
1
1
8
9
0
0
0
7
9
6
8
7
6
0
1
0
4
5
8
2
5
6
2
7
6
9
0
8
00
75
15
40
40
90
40
40
90
40
GENERAL LEDGER
ACCOUNT NO. 401
ACCOUNT Sales
DATE
2013
Sept.
DESCRIPTION
1
3
7
15
16
17
29
30
Post
Ref.
DEBIT
J1
J1
J1
J1
J1
J2
J2
J2
1 4
9
3
9 8
6
1 5
4
10 2
0
2
2
0
5
5
5
5
0
5
0
0
0
0
0
0
2013
Sept. 12
25
Chapter 7
DESCRIPTION
Post
Ref.
J1
J2
00
00
00
00
00
00
00
00
1
2
2
12
13
14
15
25
4
3
6
4
0
6
0
3
0
2
4
4
9
4
9
4
0
5
5
5
5
5
5
5
00
00
00
00
00
00
00
00
ACCOUNT NO. 421
ACCOUNT Sales Returns and Allowances
DATE
BALANCE
DEBIT
CREDIT
CREDIT
DEBIT
1 2 5 00
1 0 0 00
CREDIT
BALANCE
DEBIT
CREDIT
1 2 5 00
2 2 5 00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.3A (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Candy Cho
ADDRESS
DATE
DESCRIPTION
2013
Sept. 1 Sales Slip 101
18
Post
Ref.
J1
J2
DEBIT
CREDIT
1 4 9 8 00
6 0 0 00
BALANCE
1 4 9 8 00
8 9 8 00
NAME Bridgette Huffman
ADDRESS
DATE
DESCRIPTION
2013
Sept. 7 Sales Slip 103
27
Post
Ref.
J1
J2
DEBIT
CREDIT
3 4 2 40
3 4 2 40
BALANCE
3 4 2 40
- 0 -
NAME Mark Navalta
ADDRESS
DATE
DESCRIPTION
2013
Sept. 17 Sales Slip 105
25 Credit Memorandum 102
29 Sales Slip 106
Post
Ref.
J2
J2
J2
DEBIT
CREDIT
1 6 5 8 50
1 0 7 00
4 8 1 50
BALANCE
1 6 5 8 50
1 5 5 1 50
2 0 3 3 00
NAME Jim Peterson
ADDRESS
DATE
DESCRIPTION
2013
Sept. 3 Sales Slip 102
12 Credit Memorandum 101
20
Chapter 7
Post
Ref.
J1
J1
J2
DEBIT
CREDIT
9 8 9 75
1 3 3 75
8 5 6 00
BALANCE
9 8 9 75
8 5 6 00
- 0 -
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.3A (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Kathy Sundstrand
ADDRESS
DATE
2013
Sept. 16 Sales Slip 104
DESCRIPTION
Post
Ref.
J1
DEBIT
CREDIT
6 9 5 50
BALANCE
6 9 5 50
Eddie’s Electronics
Schedule of Accounts Receivable
October 1, 2013
Candy Cho
Bridgette Huffman
Mark Navalta
Jim Peterson
Kathy Sundstrand
Total
8 9 8
0
2 0 3 3
0
6 9 5
3 6 2 6
00
00
00
00
50
50
Compare the balance of the Accounts Receivable control account with the total of the schedule.
The balance of the Accounts Receivable control account is $3,626.50.
Analyze: The amount of sales tax owed at September 30, 2013 is $1,758.40
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.4A
PAGE
GENERAL JOURNAL
DATE
1 2013
2 April
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Chapter 7
DESCRIPTION
1 Accounts Receivable/Alto Music Center
Sales
Sold merchandise on credit to Alto Music Center,
Invoice 3912, 2/10, n/30
3 Sales Discounts
Cash
Accounts Receivable/Music Supply Store
Post
Ref.
111
✔
DEBIT
3 5 0 0 00
401
452
101
111
3 0 00
1 4 7 0 00
✔
Received payment on account from
Music Supply Store, Invoice 2718
5 Cash
Sales
Sold merchandise for cash to a new customer
101
401
1 4 7 5 00
7 Sales Returns and Allowances
Cash
Issued cash refund for merchandise sold on April 5
451
101
7 5 00
8 Accounts Receivable/Music Warehouse
Sales
Sold merchandise on credit to Music Warehouse,
Invoice 3913, 2/10, n/30
10 Sales Discounts
Cash
Accounts Receivable/Alto Music Center
111
✔
5 5 0 0 00
401
452
101
111
7 0 00
3 4 3 0 00
✔
Received payment on account from Alto Music
Center, Invoice 3912
15 Sales Returns and Allowances
Accounts Receivable/Music Warehouse
Accepted return of damaged merchandise, issued
Credit Memorandum 105 to Music Warehouse
Original sale made on Invoice 3913, April 8
451
111
✔
1 8 0 0 00
11
CREDIT
1
2
3 5 0 0 00 3
4
5
6
7
8
1 5 0 0 00 9
10
11
12
13
1 4 7 5 00 14
15
16
17
7 5 00 18
19
20
21
5 5 0 0 00 22
23
24
25
26
27
3 5 0 0 00 28
29
30
31
32
1 8 0 0 00 33
34
35
36
37
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.4A (continued)
DATE
GENERAL JOURNAL
DESCRIPTION
1 2013
2 April 17 Sales Discounts
3
Cash
4
Accounts Receivable/Music Warehouse
5
Received payment on account from
6
Music Warehouse, Invoice 3913
7
8
19 Cash
9
Accounts Receivable/Oldies Sounds
10
Received payment on account from Oldies Sounds
11
Invoice 3850
12
13
20 Accounts Receivable/Hawk Music Center
14
Sales
15
Sold merchandise on credit to Hawk Music Center,
16
Invoice 3914, 2/10, n/30
17
18
25 Accounts Receivable/Modern Sounds
19
Sales
20
Sold merchandise on credit to Modern Sounds,
21
Invoice 3915, 2/10, n/30
22
23
26 Accounts Receivable/Country Tunes
24
Sales
25
Sold merchandise on credit to Country Tunes,
26
Invoice 3916, 2/10, n/30
27
28
27 Sales Returns and Allowances
29
Accounts Receivable/Modern Sounds
30
Accepted return of damaged merchandise, issued
31
Credit Memorandum 106 to Modern Sounds.
32
Original sale made on Invoice 3915, April 25
33
34
29 Sales Discounts
35
Cash
36
Accounts Receivable/Hawk Music Center
37
38
39
Post
Ref.
452
101
111
111
7 4 00
3 6 2 6 00
3 7 0 0 00
✔
101
111
DEBIT
1 8 0 0 00
1 8 0 0 00
✔
✔
10 2 0 0 00
10 2 0 0 00
401
111
✔
9 8 0 0 00
401
111
✔
9 8 0 0 00
7 6 0 0 00
401
451
111
111
7 6 0 0 00
4 0 0 00
4 0 0 00
✔
452
101
2 0 4 00
9 9 9 6 00
10 2 0 0 00
✔
Received payment on account, Invoice 3914
30 Accounts Receivable/Oldies Sounds
111
✔
2 2 0 0 00
40
Sales
401
41
Sold merchandise on credit to Oldies Sounds,
42
Invoice 3917, 2/10, n/30
43
Analyze: The amount of the cash discount taken by Hawk Music Center on April 29 was $204.
Chapter 7
PAGE 12
CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
2 2 0 0 00 40
41
42
43
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.5A
GENERAL LEDGER
ACCOUNT NO. 101
ACCOUNT Cash
DATE
DESCRIPTION
2013
April 1 Balance
3
5
7
10
17
19
29
Post
Ref.
J11
J11
J11
J11
J12
J12
J13
DEBIT
CREDIT
BALANCE
DEBIT
CREDIT
1 4 7 0 00
1 4 7 5 00
7 5 00
3
3
1
9
4
6
8
9
3
2
0
9
0
6
0
6
00
00
00
00
26
27
29
29
32
36
38
48
4
8
3
2
7
3
1
1
DESCRIPTION
2013
April 1 Balance
1
3
8
10
15
17
19
20
25
26
27
29
30
Chapter 7
0
0
5
0
0
6
6
2
00
00
00
00
00
00
00
00
ACCOUNT NO. 111
ACCOUNT Accounts Receivable
DATE
0
7
4
7
0
2
2
2
Post
Ref.
J11
J11
J11
J11
J11
J12
J12
J12
J12
J12
J12
J13
J13
DEBIT
CREDIT
DEBIT
3 5 0 0 00
1 5 0 0 00
5 5 0 0 00
3
1
3
1
5
8
7
8
0
0
0
0
0
0
0
0
00
00
00
00
10 2 0 0 00
9 8 0 0 00
7 6 0 0 00
4 0 0 00
10 2 0 0 00
2 2 0 0 00
3
6
5
10
7
5
1
10
20
27
27
17
19
3
8
3
8
3
5
8
2
0
6
2
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
BALANCE
CREDIT
0
0
0
0
0
0
0
0
0
0
0
0
0
00
00
00
00
00
00
00
00
00
00
00
00
00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.5A (continued)
GENERAL LEDGER
ACCOUNT NO. 401
ACCOUNT Sales
DATE
DESCRIPTION
2013
April 1
5
8
20
25
26
30
Post
Ref.
DEBIT
CREDIT
J11
J11
J11
J12
J12
J12
J13
3
1
5
10
9
7
2
5
4
5
2
8
6
2
0
7
0
0
0
0
0
0
5
0
0
0
0
0
DESCRIPTION
2013
April 7
15
27
Post
Ref.
J11
J11
J12
DEBIT
CREDIT
7 5 00
1 8 0 0 00
4 0 0 00
DESCRIPTION
2013
April 3 Balance
10
17
29
Chapter 7
3
4
10
20
30
38
40
5
9
4
6
4
0
2
0
7
7
7
7
7
7
0
5
5
5
5
5
5
00
00
00
00
00
00
00
BALANCE
DEBIT
CREDIT
7 5 00
1 8 7 5 00
2 2 7 5 00
ACCOUNT NO. 452
ACCOUNT Sales Discounts
DATE
00
00
00
00
00
00
00
ACCOUNT NO. 451
ACCOUNT Sales Returns and Allowances
DATE
BALANCE
CREDIT
DEBIT
Post
Ref.
DEBIT
J11
J11
J12
J13
3
7
7
2 0
CREDIT
0
0
4
4
00
00
00
00
BALANCE
CREDIT
DEBIT
3
1 0
1 7
3 7
0
0
4
8
00
00
00
00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
EXERCISE 7.5A (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Alto Music Center
ADDRESS
DATE
DESCRIPTION
2013
April 1 Invoice 3912
10
Post
Ref.
J11
J11
DEBIT
CREDIT
3 5 0 0 00
3 5 0 0 00
BALANCE
3 5 0 0 00
- 0 -
NAME Country Tunes
ADDRESS
DATE
DESCRIPTION
2013
April 26 Invoice 3916
Post
Ref.
J12
DEBIT
CREDIT
7 6 0 0 00
BALANCE
7 6 0 0 00
NAME Hawk Music Center
ADDRESS
DATE
DESCRIPTION
2013
April 20 Invoice 3914
29
Post
Ref.
J12
J13
DEBIT
CREDIT
10 2 0 0 00
10 2 0 0 00
BALANCE
10 2 0 0 00
- 0 -
NAME Modern Sounds
ADDRESS
DATE
DESCRIPTION
2013
April 25 Invoice 3915
27 Credit Memorandum 106
Chapter 7
Post
Ref.
J12
J12
DEBIT
CREDIT
9 8 0 0 00
4 0 0 00
BALANCE
9 8 0 0 00
9 4 0 0 00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.5A (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Music Supply Store
ADDRESS
DATE
DESCRIPTION
2013
April 1 Balance
3
Post
Ref.
DEBIT
✔
J11
CREDIT
1 5 0 0 00
BALANCE
1 5 0 0 00
- 0 -
NAME Music Warehouse
ADDRESS
DATE
DESCRIPTION
2013
April 8 Invoice 3913
15 Credit Memorandum 105
17
Post
Ref.
J11
J11
J12
DEBIT
CREDIT
5 5 0 0 00
1 8 0 0 00
3 7 0 0 00
BALANCE
5 5 0 0 00
3 7 0 0 00
- 0 -
NAME Oldies Sounds
ADDRESS
DATE
2013
April 1 Balance
19
30 Invoice 3917
Chapter 7
DESCRIPTION
Post
Ref.
✔
J12
J13
DEBIT
CREDIT
1 8 0 0 00
2 2 0 0 00
BALANCE
1 8 0 0 00
- 0 2 2 0 0 00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.5A (continued)
Best Sounds
Schedule of Accounts Receivable
May 1, 2013
Alto Music Center
Country Tunes
Hawk Music Center
Modern Sounds
Music Supply Store
Music Warehouse
Oldies Sounds
Total
7
9
2
19
6
4
2
2
0
0
0
0
0
0
0
0
0
0
0
0
00
00
00
00
Compare the balance of the Accounts Receivable control account with the total of the schedule.
The balance of the Accounts Receivable control account is $19,200.00.
Analyze: The total sales on account in April, prior to any returns, allowances, or discounts were $38,800
($40,275 - $1,475).
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.6A
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
Post
Ref.
1 2013
2 Feb. 1 Accounts Receivable/Beautiful Kitchens
3
Sales [$4,000 – ($4,000 × 25%)]
4
Sold crystal goods on credit to Beautiful Kitchens,
5
a wholesale customer, Invoice 5950, n/15
6
7
15 Cash ($8,500 + $680)
8
Sales
9
Sales Tax Payable ($8,500 × 8%)
10
Record cash sales, February 1 – 15
11
12
15 Credit Card Expense ($12,000 + $960) × 2%
13
Cash ($12,000 + $960 - $259.20)
14
Sales
15
Sales Tax Payable ($12,000 × 8%)
16
Record credit card sales, February 1 – 15
17
18
16 Cash
19
Accounts Receivable/Beautiful Kitchens
20
Received payment on account, Invoice 5950
21
22
16 Accounts Receivable/American Express
23
Sales
24
Sales Tax Payable ($8,000 × 8%)
25
Sold merchandise to customers using
26
American Express
27
28
17 Accounts Receivable/Incredible Bedrooms
29
Sales [$8,000 – ($8,000 × 30%)]
30
Sold a set of Roman statues on credit to
31
Incredible Bedrooms, a wholesale customer,
32
Invoice 5951, n/15
33
Chapter 7
DEBIT
121
401
3 0 0 0 00
101
401
222
9 1 8 0 00
521
101
401
222
2 5 9 20
12 7 0 0 80
101
121
3 0 0 0 00
121
401
222
8 6 4 0 00
121
401
5 6 0 0 00
10
CREDIT
3 0 0 0 00
8 5 0 0 00
6 8 0 00
12 0 0 0 00
9 6 0 00
3 0 0 0 00
8 0 0 0 00
6 4 0 00
5 6 0 0 00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.6A (continued)
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 Feb. 20 Credit Card Expense ($8,640 × 3%)
3
Cash ($8,640 - $259.20)
4
Accounts Receivable/American Express
5
Received payment from American Express for
6
amount billed on February 16
7
8
27 Cash
9
Accounts Receivable/Incredible Bedrooms
10
Received payment on account, Invoice 5951
11
12
28 Cash ($7,250 + $580)
13
Sales
14
Sales Tax Payable ($7,250 × 8%)
15
Record cash sales, February 16 – 28
16
17
28 Credit Card Expense ($10,000 + $800) × 2%
18
Cash ($10,000 + $800 - $216)
19
Sales
20
Sales Tax Payable ($10,000 × 8%)
21
Record credit card sales, February 16 – 28
22
23
28 Accounts Receivable/American Express
24
Sales
25
Sales Tax Payable ($9,200 × 8%)
26
Sold merchandise to customers using
27
American Express
28
Chapter 7
Post
Ref.
DEBIT
521
101
121
2 5 9 20
8 3 8 0 80
101
121
5 6 0 0 00
101
401
222
7 8 3 0 00
521
101
401
222
2 1 6 00
10 5 8 4 00
121
401
222
9 9 3 6 00
11
CREDIT
8 6 4 0 00
5 6 0 0 00
7 2 5 0 00
5 8 0 00
10 0 0 0 00
8 0 0 00
9 2 0 0 00
7 3 6 00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.6A (continued)
GENERAL LEDGER
ACCOUNT NO. 101
ACCOUNT Cash
DATE
DESCRIPTION
2013
Feb. 1 Balance
15
15
16
20
27
28
28
Post
Ref.
✔
J10
J10
J10
J11
J11
J11
J11
DEBIT
9
12
3
8
5
7
10
1
7
0
3
6
8
5
8
0
0
8
0
3
8
CREDIT
0
0
0
0
0
0
4
BALANCE
DEBIT
CREDIT
22
31
44
47
55
61
68
79
00
80
00
80
00
00
00
2
4
1
1
4
0
9
5
DESCRIPTION
2013
Feb. 1
16
16
17
20
27
28
Post
Ref.
J10
J10
J10
J10
J11
J11
J11
DEBIT
CREDIT
2013
Feb. 15
15
16
28
28
28
Chapter 7
DESCRIPTION
00
00
80
80
60
60
60
60
BALANCE
DEBIT
CREDIT
3 0 0 0 00
3 0 0 0 00
8 6 4 0 00
5 6 0 0 00
8 6 4 0 00
5 6 0 0 00
9 9 3 6 00
3 0
8 6
14 2
5 6
9 9
0
0
4
4
0
0
3
0
0
0
0
6
00
00
00
00
00
ACCOUNT NO. 222
ACCOUNT Sales Tax Payable
DATE
0
0
0
0
1
1
1
5
ACCOUNT NO. 121
ACCOUNT Accounts Receivable
DATE
3
1
1
1
9
9
2
0
Post
Ref.
J10
J10
J10
J11
J11
J11
DEBIT
CREDIT
6
9
6
5
8
7
8
6
4
8
0
3
0
0
0
0
0
6
BALANCE
DEBIT
CREDIT
00
00
00
00
00
00
1
2
2
3
4
6
6
2
8
6
3
8
4
8
6
6
9
0
0
0
0
0
6
00
00
00
00
00
00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.6A (continued)
GENERAL LEDGER
ACCOUNT NO. 401
ACCOUNT Sales
DATE
DESCRIPTION
2013
Feb. 1
15
15
16
17
28
28
28
Post
Ref.
DEBIT
J10
J10
J10
J10
J10
J11
J11
J11
CREDIT
3
8
12
8
5
7
10
9
0
5
0
0
6
2
0
2
0
0
0
0
0
5
0
0
0
0
0
0
0
0
0
0
2013
Feb. 15
20
28
DESCRIPTION
00
00
00
00
00
00
00
00
3
11
23
31
37
44
54
63
0
5
5
5
1
3
3
5
0
0
0
0
0
5
5
5
0
0
0
0
0
0
0
0
00
00
00
00
00
00
00
00
ACCOUNT NO. 521
ACCOUNT Credit Card Expense
DATE
BALANCE
DEBIT
CREDIT
Post
Ref.
J10
J10
J11
DEBIT
CREDIT
2 5 9 20
2 5 9 20
2 1 6 00
BALANCE
DEBIT
CREDIT
2 5 9 20
5 1 8 40
7 3 4 40
Analyze: The total credit card expense incurred in February is $734.40.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.1B
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
Post
Ref.
1 2013
2 Oct. 1 Accounts Receivable/Luis Beltazar, CPA ($600 + $30)
3
Sales
4
Sales Tax Payable ($600 × 5%)
5
Sold merchandise on credit to Luis Beltazar, CPA
6
Sales Slip 101
7
8
4 Accounts Receivable/Cervantes Consulting ($360 + $18)
9
Sales
10
Sales Tax Payable ($360 × 5%)
11
Sold merchandise on credit to Cervantes Consulting
12
Sales Slip 102
13
14
12 Accounts Receivable/Andrew Mitchell ($450 + $22.50)
15
Sales
16
Sales Tax Payable ($450 × 5%)
17
Sold merchandise on credit to Andrew Mitchell,
18
Attorney at Law, Sales Slip 103
19
20
15 Cash ($3,825 + $191.25)
21
Sales
22
Sales Tax Payable ($3,825 × 5%)
23
Record cash sales, October 1 – 15
24
25
25 Accounts Receivable/A.D. & M. Escrow ($980 + $49)
26
Sales
27
Sales Tax Payable ($980 × 5%)
28
Sold merchandise on credit to A.D. & M. Escrow,
29
Sales Slip 104
30
31
28 Cash
32
Accounts Receivable/Cervantes Consulting
33
Received partial payment on account from
34
Cervantes Consulting
35
Chapter 7
DEBIT
111
401
221
6 3 0 00
101
401
221
3 7 8 00
111
401
221
4 7 2 50
101
401
221
4 0 1 6 25
111
401
221
1 0 2 9 00
101
111
1 7 5 00
1
CREDIT
6 0 0 00
3 0 00
3 6 0 00
1 8 00
4 5 0 00
2 2 50
3 8 2 5 00
1 9 1 25
9 8 0 00
4 9 00
1 7 5 00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.1B (continued)
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 Oct. 31 Cash ($4,350 + $217.50)
3
Sales
4
Sales Tax Payable ($4,350 × 5%)
5
Record cash sales, October 16 – 31
6
7
31 Cash
8
Accounts Receivable/Luis Beltazar, CPA
9
Received full payment on account from
10
Luis Beltazar, CPA
11
Chapter 7
Post
Ref.
DEBIT
101
401
221
4 5 6 7 50
101
111
6 3 0 00
2
CREDIT
1
2
4 3 5 0 00 3
2 1 7 50 4
5
6
7
6 3 0 00 8
9
10
11
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.1B (continued)
GENERAL LEDGER
ACCOUNT NO. 101
ACCOUNT Cash
DATE
DESCRIPTION
2013
Oct. 15
28
31
31
Post
Ref.
J1
J1
J2
J2
DEBIT
4 0
1
4 5
6
1
7
6
3
CREDIT
6
5
7
0
BALANCE
DEBIT
CREDIT
25
00
50
00
4
4
8
9
0
1
7
3
DESCRIPTION
2013
Oct. 1
4
12
25
28
31
Post
Ref.
J1
J1
J1
J1
J1
J2
DEBIT
6
3
4
1 0
3
7
7
2
CREDIT
2013
Oct. 1
4
12
15
25
31
Chapter 7
DESCRIPTION
25
25
75
75
0
8
2
9
BALANCE
DEBIT
CREDIT
00
00
50
00
1 7 5 00
6 3 0 00
1
1
2
2
1
6
0
4
5
3
7
3
0
8
0
3
0
0
8
0
9
4
4
00
00
50
50
50
50
ACCOUNT NO. 221
ACCOUNT Sales Tax Payable
DATE
6
1
8
8
ACCOUNT NO. 111
ACCOUNT Accounts Receivable
DATE
1
9
5
8
Post
Ref.
J1
J1
J1
J1
J1
J2
DEBIT
CREDIT
3
1
2
1 9
4
2 1
0
8
2
1
9
7
BALANCE
DEBIT
CREDIT
00
00
50
25
00
50
3
4
7
2 6
3 1
5 2
0
8
0
1
0
8
00
00
50
75
75
25
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.1B (continued)
GENERAL LEDGER
ACCOUNT NO. 401
ACCOUNT Sales
DATE
2013
Oct. 1
4
12
15
25
31
DESCRIPTION
Post
Ref.
J1
J1
J1
J1
J1
J2
DEBIT
CREDIT
6
3
4
3 8
9
4 3
0
6
5
2
8
5
0
0
0
5
0
0
BALANCE
DEBIT
CREDIT
00
00
00
00
00
00
1
5
6
10
6
9
4
2
2
5
0
6
1
3
1
6
0
0
0
5
5
5
00
00
00
00
00
00
Analyze: $528.25 is owed for sales taxes collected on October 31.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.2B
PAGE
GENERAL JOURNAL
DATE
1 2013
2 Nov.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Chapter 7
DESCRIPTION
1 Accounts Receivable/Andy Chin ($650 + $39)
Sales
Sales Tax Payable ($650 × 6%)
Sold a dishwasher on credit to Andy Chin,
Sales Slip 101
Post
Ref.
111
6 8 9 00
401
221
2 Accounts Receivable/Jane Peters ($825 + $49.50)
Sales
Sales Tax Payable ($825 × 6%)
Sold stereo equipment on credit to Jane Peters,
Sales Slip 102
111
7 Accounts Receivable/Bob Huffington ($410 + $24.60)
Sales
Sales Tax Payable ($410 × 6%)
Sold trash compactor on credit to Bob Huffington,
Sales Slip 103
111
12 Sales Returns and Allowances
Sales Tax Payable ($95 × 6%)
Accounts Receivable/Jane Peters
✔
DEBIT
✔
8 7 4 50
401
221
✔
4 3 4 60
401
221
421
221
111
9 5 00
5 70
✔
Accept return of defective merchandise, Credit
Memorandum 101; original sales made on Sales
Slip 102 of November 2
15 Cash ($8,900 + $534)
Sales
Sales Tax Payable ($8,900 × 6%)
Record cash sales, November 1 – 15
101
401
221
16 Accounts Receivable/Gina Silvestri ($550 + $33)
111
Sales
Sales Tax Payable ($550 × 6%)
Sold microwave oven on credit to Gina Silvestri,
Sales Slip 104
✔
401
221
9 4 3 4 00
5 8 3 00
1
CREDIT
1
2
6 5 0 00 3
3 9 00 4
5
6
7
8
8 2 5 00 9
4 9 50 10
11
12
13
14
4 1 0 00 15
2 4 60 16
17
18
19
20
21
1 0 0 70 22
23
24
25
26
27
8 9 0 0 00 28
5 3 4 00 29
30
31
32
5 5 0 00 33
3 3 00 34
35
36
37
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.2B (continued)
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 Nov. 17 Accounts Receivable/Dennis Newcombe ($1,375 + $82.50)
3
4
5
6
7
8
9
Sales
Sales Tax Payable ($1,375 × 6%)
Sold home entertainment system on credit to
Dennis Newcombe, Sales Slip 105
18 Cash
Accounts Receivable/Andy Chin
10
11
12
13
14
111
✔
DEBIT
1 4 5 7 50
401
221
101
111
3 0 0 00
✔
Received partial payment on account from
Andy Chin
20 Cash
Accounts Receivable/Jane Peters
15
16
17
18
19
20
101
111
7 7 3 80
✔
Received full payment on account from
Jane Peters less return on November 12
24 Sales Returns and Allowances
Sales Tax Payable ($125 × 6%)
Accounts Receivable/Dennis Newcombe
21
22
23
24
25
421
221
111
1 2 5 00
7 50
✔
Issued allowance due to scratches on home
entertainment system, Credit Memorandum 102
28 Cash
Accounts Receivable/Bob Huffington
26
27
28
29
30
31
32
33
34
35
36
37
Post
Ref.
Sales
Sales Tax Payable ($675 × 6%)
Sold gas stove on credit to Bob Huffington,
Sales Slip 106
111
1 3 7 5 00 3
8 2 50 4
5
6
7
8
3 0 0 00 9
10
11
12
13
7 7 3 80 14
15
16
17
18
19
1 3 2 50 20
✔
26
27
28
7 1 5 50
401
221
101
10 8 6 5 00
30 Cash
Sales
401
Sales Tax Payable ($10,250 × 6%)
221
Record cash sales, November 16 – 30
Analyze: The total amount due from Bob Huffington for the November 29 sale is $715.50.
Chapter 7
1
2
✔
4 3 4 60
Received full payment on acct from Bob Huffington
29 Accounts Receivable/Bob Huffington
CREDIT
21
22
23
24
4 3 4 60 25
101
111
2
6 7 5 00 29
4 0 50 30
31
32
33
34
10 2 5 0 00 35
6 1 5 00 36
37
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.3B
GENERAL LEDGER
ACCOUNT NO. 101
ACCOUNT Cash
DATE
DESCRIPTION
2013
Nov. 15
18
20
28
30
Post
Ref.
J1
J2
J2
J2
J2
DEBIT
9 4
3
7
4
10 8
3
0
7
3
6
CREDIT
4
0
3
4
5
BALANCE
CREDIT
DEBIT
00
00
80
60
00
9
9
10
10
21
4
7
5
9
8
2013
Nov.
Chapter 7
1
2
7
12
16
17
18
20
24
28
29
4
4
7
2
7
00
00
80
40
40
ACCOUNT NO. 111
ACCOUNT Accounts Receivable
DESCRIPTION
3
3
0
4
0
Post
Ref.
J1
J1
J1
J1
J1
J2
J2
J2
J2
J2
J2
DEBIT
CREDIT
BALANCE
DEBIT
CREDIT
6 8 9 00
8 7 4 50
4 3 4 60
1 0 0 70
5 8 3 00
1 4 5 7 50
3
7
1
4
7 1 5 50
0
7
3
3
0
3
2
4
00
80
50
60
1
1
1
2
3
3
2
2
2
3
6
5
9
8
4
9
6
8
7
2
0
8
6
9
9
8
3
3
6
3
9
1
9
3
8
7
0
7
7
4
1
7
2
00
50
10
40
40
90
90
10
60
00
50
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.3B (continued)
ACCOUNT NO. 221
ACCOUNT Sales Tax Payable
DATE
2013
Nov.
DESCRIPTION
1
2
7
12
15
16
17
24
29
30
Post
Ref.
DEBIT
J1
J1
J1
J1
J1
J1
J2
J2
J2
J2
CREDIT
BALANCE
DEBIT
CREDIT
3 9 00
4 9 50
2 4 60
1
1
6
6
7
7
7
1 4
5 70
5 3 4 00
3 3 00
8 2 50
7 50
4 0 50
6 1 5 00
3
8
1
0
4
7
5
4
8
0
9
8
3
7
1
4
6
9
9
4
00
50
10
40
40
40
90
40
90
90
GENERAL LEDGER
ACCOUNT NO. 401
ACCOUNT Sales
DATE
2013
Nov.
DESCRIPTION
1
2
7
15
16
17
29
30
Post
Ref.
DEBIT
J1
J1
J1
J1
J1
J2
J2
J2
CREDIT
6
8
4
8 9
5
1 3
6
10 2
5
2
1
0
5
7
7
5
0
5
0
0
0
5
5
0
2013
Nov. 12
24
Chapter 7
DESCRIPTION
Post
Ref.
J1
J2
00
00
00
00
00
00
00
00
1
1
10
11
12
13
23
6
4
8
7
3
7
3
6
5
7
8
8
3
1
8
3
0
5
5
5
5
0
5
5
00
00
00
00
00
00
00
00
ACCOUNT NO. 421
ACCOUNT Sales Returns and Allowances
DATE
BALANCE
DEBIT
CREDIT
DEBIT
9 5 00
1 2 5 00
CREDIT
BALANCE
DEBIT
CREDIT
9 5 00
2 2 0 00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.3B (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Andy Chin
ADDRESS
DATE
DESCRIPTION
2013
Nov. 1 Sales Slip 101
18
Post
Ref.
J1
J2
DEBIT
CREDIT
6 8 9 00
3 0 0 00
BALANCE
6 8 9 00
3 8 9 00
NAME Bob Huffington
ADDRESS
DATE
DESCRIPTION
2013
Nov. 7 Sales Slip 103
28
29 Sales Slip 106
Post
Ref.
J1
J2
J2
DEBIT
CREDIT
4 3 4 60
4 3 4 60
7 1 5 50
BALANCE
4 3 4 60
- 0 7 1 5 50
NAME Dennis Newcombe
ADDRESS
DATE
DESCRIPTION
2013
Nov. 17 Sales Slip 105
24 Credit Memorandum 102
Post
Ref.
J2
J2
DEBIT
CREDIT
1 4 5 7 50
1 3 2 50
BALANCE
1 4 5 7 50
1 3 2 5 00
NAME Jane Peters
ADDRESS
DATE
DESCRIPTION
2013
Nov. 2 Sales Slip 102
12 Credit Memorandum 101
20
Chapter 7
Post
Ref.
J1
J1
J2
DEBIT
CREDIT
8 7 4 50
1 0 0 70
7 7 3 80
BALANCE
8 7 4 50
7 7 3 80
- 0 -
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.2B (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Gina Silvestri
ADDRESS
DATE
2013
Nov. 16 Sales Slip 104
DESCRIPTION
Post
Ref.
DEBIT
CREDIT
5 8 3 00
BALANCE
5 8 3 00
The Appliance Discounter
Schedule of Accounts Receivable
November 30, 2013
Andy Chin
Bob Huffington
Dennis Newcombe
Jane Peters
Gina Silvestri
Total
3
7
1 3
5
3 0
8
1
2
0
8
1
9
5
5
3
2
00
50
00
00
50
The balance of the Accounts Receivable control account equals the total of the schedule in the amount
of $3,012.50.
Analyze: Damaged or defective goods decreased sales by $220. This is 0.9% of sales ($220/$23,635).
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.4B
PAGE
GENERAL JOURNAL
DATE
1 2013
2 May
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Chapter 7
DESCRIPTION
1 Accounts Receivable/Annie’s Flowers
Sales
Sold floral arrangements on credit to Annie’s
Flowers, Invoice 9312, 2/10, n/30
4 Sales Discounts
Cash
Accounts Receivable/Orange County Florist
Post
Ref.
111
✔
DEBIT
4 5 0 00
401
452
101
111
2 4 00
1 1 7 6 00
✔
Received payment on account from
Orange County Florist, Invoice 9299
6 Cash
Sales
Sold merchandise for cash to a new customer
101
401
9 2 5 00
7 Sales Returns and Allowances
Cash
Issued cash refund for merchandise sold on May 6
451
101
2 5 00
8 Accounts Receivable/Rosa’s Flowers and Gifts
Sales
Sold floral arrangements on credit to Rosa’s
Flowers and Gifts, Invoice 9313, 2/10, n/30
10 Sales Discounts
Cash
Accounts Receivable/Annie’s Flowers
111
✔
1 5 0 0 00
401
452
101
111
9 00
4 4 1 00
✔
Received payment on account from Annie’s
Flowers, Invoice 9312
14 Sales Returns and Allowances
Accounts Receivable/Rosa’s Flowers and Gifts
Issued allowance due to withered flowers,
Credit Memorandum 109; original sale made on
Invoice 9313, May 8, to Rosa’s Flowers and Gifts
451
111
✔
2 0 0 00
12
CREDIT
1
2
4 5 0 00 3
4
5
6
7
8
1 2 0 0 00 9
10
11
12
13
9 2 5 00 14
15
16
17
2 5 00 18
19
20
21
1 5 0 0 00 22
23
24
25
26
27
4 5 0 00 28
29
30
31
32
2 0 0 00 33
34
35
36
37
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.4B (continued)
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 May 17 Sales Discounts
3
Cash
4
Accounts Receivable/Rosa’s Flowers and Gifts
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Chapter 7
Post
Ref.
452
101
111
DEBIT
2 6 00
1 2 7 4 00
✔
Received payment on account from
Rosa’s Flowers and Gifts, Invoice 9313
19 Cash
Accounts Receivable/White Lily Florists, Inc
Sales
Sold table arrangements on credit to Grand Party
Supply, Invoice 9314, 2/10, n/30
24 Accounts Receivable/Miyata Floral Designs
Sales
Sold roses on credit to Miyata Floral Designs,
Invoice 9315, 2/10, n/30
26 Accounts Receivable/Cancino’s Flower Shop
Sales
Sold potted plants on credit to Cancino’s Flower
Shop, Invoice 9316, 2/10, n/30
27 Sales Returns and Allowances
Accounts Receivable/Miyata Floral Designs
Accept a return of damaged roses and issued
Credit Memorandum 110 to Miyata Floral Designs.
Original sale made on Invoice 9315, May 24
111
✔
5 8 0 00
10
11
12
13
4 8 0 00
5 8 0 00 14
15
16
17
18
8 5 0 00
4 8 0 00 19
20
21
22
23
401
111
✔
401
111
✔
401
451
111
1
2
3
1 3 0 0 00 4
✔
2 9 0 0 00
Received payment on account from White Lily
Florists, Inc. Invoice 9279
20 Accounts Receivable/Grand Party Supply
CREDIT
5
6
7
8
2 9 0 0 00 9
101
111
13
✔
4 8 00
8 5 0 00 24
25
26
27
28
4 8 00 29
30
31
32
33
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.4B (continued)
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 May 29 Sales Discounts
3
Cash
4
Accounts Receivable/Grand Party Supply
5
6
7
8
9
10
11
Post
Ref.
✔
✔
5
6
7
1 1 60
5 6 8 40
Received payments on account, Invoice 9314
30 Accounts Receivable/White Lily Flowers, Inc.
Sales
Sold plants on credit to White Lily Flowers, Inc.,
Invoice 9317, 2/10, n/30
111
CREDIT
1
2
3
5 8 0 00 4
452
101
111
DEBIT
14
401
1 2 0 0 00
1 2 0 0 00 8
9
10
11
Analyze: The amount of the discount taken by Annie's Flowers on May 10 was $9.00.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.5B
GENERAL LEDGER
ACCOUNT NO. 101
ACCOUNT Cash
DATE
DESCRIPTION
2013
May 1 Balance
4
6
7
10
17
19
29
Post
Ref.
✔
J12
J12
J12
J12
J13
J13
J14
DEBIT
CREDIT
BALANCE
DEBIT
CREDIT
1 1 7 6 00
9 2 5 00
2 5 00
4
1 2
2 9
5
4
7
0
6
1
4
0
8
00
00
00
40
25
26
27
27
28
29
32
33
8
9
9
8
3
5
4
0
2013
May 1 Balance
1
4
8
10
14
17
19
20
24
26
27
29
30
Chapter 7
DESCRIPTION
0
6
1
6
7
1
1
9
00
00
00
00
00
00
00
40
ACCOUNT NO. 111
ACCOUNT Accounts Receivable
DATE
0
7
0
7
1
9
9
5
Post
Ref.
J12
J12
J12
J12
J12
J13
J13
J13
J13
J13
J13
J14
J14
DEBIT
CREDIT
BALANCE
DEBIT
CREDIT
4 5 0 00
1 2 0 0 00
1 5 0 0 00
4
2
1 3
2 9
5
0
0
0
0
0
0
0
00
00
00
00
5 8 0 00
4 8 0 00
8 5 0 00
4 8 00
5 8 0 00
1 2 0 0 00
4
4
3
4
4
4
2
1
1
1
1
2
1
5
3
8
4
2
9
5
0
9
8
2
4
0
5
5
5
0
0
0
0
8
6
1
6
8
8
0
0
0
0
0
0
0
0
0
0
2
2
2
00
00
00
00
00
00
00
00
00
00
00
00
00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.5B (continued)
GENERAL LEDGER
ACCOUNT NO. 401
ACCOUNT Sales
DATE
DESCRIPTION
2013
May 1
6
8
20
24
26
30
Post
Ref.
DEBIT
CREDIT
J12
J12
J12
J13
J13
J13
J14
4
9
1 5
5
4
8
1 2
5
2
0
8
8
5
0
0
5
0
0
0
0
0
DESCRIPTION
2013
May 7
14
27
Post
Ref.
J12
J12
J13
DEBIT
CREDIT
2 5 00
2 0 0 00
4 8 00
2013
May 4
10
17
29
Chapter 7
DESCRIPTION
1
2
3
3
4
5
4
3
8
4
9
7
9
5
7
7
5
3
8
8
0
5
5
5
5
5
5
00
00
00
00
00
00
00
BALANCE
DEBIT
CREDIT
2 5 00
2 2 5 00
2 7 3 00
ACCOUNT NO. 452
ACCOUNT Sales Discounts
DATE
00
00
00
00
00
00
00
ACCOUNT NO. 451
ACCOUNT Sales Returns and Allowances
DATE
BALANCE
DEBIT
CREDIT
Post
Ref.
J12
J12
J13
J14
DEBIT
2 4
9
2 6
1 1
CREDIT
00
00
00
60
BALANCE
DEBIT
CREDIT
2
3
5
7
4
3
9
0
00
00
00
60
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.5B (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Annie’s FLowers
ADDRESS
DATE
DESCRIPTION
2013
May 1 Invoice 9312
10
Post
Ref.
J12
J12
DEBIT
CREDIT
4 5 0 00
4 5 0 00
BALANCE
4 5 0 00
- 0 -
NAME Cancino’s Flower Shop
ADDRESS
DATE
DESCRIPTION
2013
May 26 Invoice 9316
Post
Ref.
J13
DEBIT
CREDIT
8 5 0 00
BALANCE
8 5 0 00
NAME Grand Party Supply
ADDRESS
DATE
2013
May 20 Invoice 9314
29
Chapter 7
DESCRIPTION
Post
Ref.
J13
J14
DEBIT
CREDIT
5 8 0 00
5 8 0 00
BALANCE
5 8 0 00
- 0 -
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.5B (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Miyata Floral Designs
ADDRESS
DATE
DESCRIPTION
2013
May 24 Invoice 9315
27 Credit Memorandum 110
Post
Ref.
J13
J13
DEBIT
CREDIT
4 8 0 00
4 8 00
BALANCE
4 8 0 00
4 3 2 00
NAME Orange County Florist
ADDRESS
DATE
DESCRIPTION
2013
May 1 Balance
4
Post
Ref.
DEBIT
✔
J12
CREDIT
1 2 0 0 00
BALANCE
1 2 0 0 00
- 0 -
NAME Rosa’s Flowers and Gifts
ADDRESS
DATE
DESCRIPTION
2013
May 8 Invoice 9313
14 Credit Memorandum 109
17
Chapter 7
Post
Ref.
J12
J12
J13
DEBIT
CREDIT
1 5 0 0 00
2 0 0 00
1 3 0 0 00
BALANCE
1 5 0 0 00
1 3 0 0 00
- 0 -
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.5B (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME White Lily Florists, Inc.
ADDRESS
DATE
2013
May 1 Balance
19
30 Invoice 9317
DESCRIPTION
Post
Ref.
J13
J14
DEBIT
CREDIT
2 9 0 0 00
1 2 0 0 00
BALANCE
2 9 0 0 00
- 0 1 2 0 0 00
The Urban Florist
Schedule of Accounts Receivable
May 31, 2013
Annie’s Flowers
Cancino’s Flower Shop
Grand Party Supply
Miyata Floral Designs
Orange County Florist
Rosa’s Flowers and Gifts
White Lily Florists, Inc.
Total
8
4
1 2
2 4
0
5
0
3
0
0
0
8
0
2
0
2
00
00
00
00
The balance of the Accounts Receivable control account is $2,482.00.
Analyze: The total sales on account in May, prior to any returns, allowances, or discounts is $5,060.00 ($5,985.00 –
$925.00).
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.6B
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 June 1 Accounts Receivable/Wine Country Kitchens
3
Sales [$6,000 - ($6,000 × 30%)]
4
Sold crystal goods on credit to Wine Country
5
Kitchens, a wholesale customer, Invoice 6920, n/15
6
7
15 Cash ($10,200 + $816)
8
Sales
9
Sales Tax Payable ($10,200 × 8%)
10
Record cash sales, June 1 - 15
11
12
15 Credit Card Expense ($14,200 + $1,136) × 3%
13
Cash ($14,200 + $1,136 - $460.08)
14
Sales
15
Sales Tax Payable ($14,200 × 8%)
16
Record credit card sales, June 1 - 15
17
18
16 Cash
19
Accounts Receivable/Wine Country Kitchens
20
Received payment on account, Invoice 6920
21
22
16 Accounts Receivable/American Express
23
Sales
24
Sales Tax Payable ($9,000 × 8%)
25
Sold merchandise to customers using
26
American Express
27
28
17 Accounts Receivable/Victorian Decadence
29
Sales [$18,000 - ($18,000 × 40%)]
30
Sold a set of brass serving trays on credit to
31
Victorian Decadence, a wholesale customer,
32
Invoice 6921, n/15
33
Chapter 7
Post
Ref.
DEBIT
121
401
4 2 0 0 00
101
401
222
11 0 1 6 00
521
101
401
222
4 6 0 08
14 8 7 5 92
101
121
4 2 0 0 00
121
401
222
9 7 2 0 00
121
401
10 8 0 0 00
15
CREDIT
4 2 0 0 00
10 2 0 0 00
8 1 6 00
14 2 0 0 00
1 1 3 6 00
4 2 0 0 00
9 0 0 0 00
7 2 0 00
10 8 0 0 00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.6B (continued)
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
1 2013
2 June 19 Credit Card Expense ($9,720 × 4%)
3
Cash ($9,720 - $388.80)
4
Accounts Receivable from American Express
5
Received payment from American Express for
6
amount billed on June 16
7
8
29 Cash
9
Accounts Receivable/Victorian Decadence
10
Received payment on account, Invoice 6921
11
12
30 Cash ($9,550 + $764)
13
Sales
14
Sales Tax Payable ($9,550 × 8%)
15
Record cash sales, June 16 - 30
16
17
30 Credit Card Expense ($11,700 + $936) × 3%
18
Cash ($11,700 + $936 - $379.08)
19
Sales
20
Sales Tax Payable ($11,700 × 8%)
21
Record credit card sales, June 16 - 30
22
23
30 Accounts Receivable/American Express
24
Sales
25
Sales Tax Payable ($8,200 × 8%)
26
Sold merchandise to customers using
27
American Express
28
Chapter 7
Post
Ref.
DEBIT
521
101
121
3 8 8 80
9 3 3 1 20
101
121
10 8 0 0 00
101
401
222
10 3 1 4 00
521
101
401
222
3 7 9 08
12 2 5 6 92
121
401
222
8 8 5 6 00
16
CREDIT
9 7 2 0 00
10 8 0 0 00
9 5 5 0 00
7 6 4 00
11 7 0 0 00
9 3 6 00
8 2 0 0 00
6 5 6 00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.6B (continued)
GENERAL LEDGER
ACCOUNT NO. 101
ACCOUNT Cash
DATE
2013
June
DESCRIPTION
1 Balance
15
15
16
19
29
30
30
Post
Ref.
✔
J15
J15
J15
J16
J16
J16
J16
DEBIT
11
14
4
9
10
10
12
0
8
2
3
8
3
2
1
7
0
3
0
1
5
CREDIT
6
5
0
1
0
4
6
BALANCE
DEBIT
CREDIT
30
41
56
60
69
80
90
102
00
92
00
20
00
00
92
1
1
0
2
5
3
6
9
2013
June
DESCRIPTION
1
16
16
17
19
29
30
Post
Ref.
J15
J15
J15
J15
J16
J16
J16
DEBIT
CREDIT
2013
June 15
15
16
30
30
30
Chapter 7
DESCRIPTION
00
00
92
92
12
12
12
04
BALANCE
DEBIT
CREDIT
4 2 0 0 00
4 2 0 0 00
9 7 2 0 00
10 8 0 0 00
9 7 2 0 00
10 8 0 0 00
8 8 5 6 00
4 2
9 7
20 5
10 8
8 8
0
0
2
2
0
0
5
0
0
0
0
6
00
00
00
00
00
ACCOUNT NO. 222
ACCOUNT Sales Tax Payable
DATE
5
1
6
6
8
8
2
9
ACCOUNT NO. 121
ACCOUNT Accounts Receivable
DATE
5
7
4
4
7
7
9
4
Post
Ref.
J15
J15
J15
J16
J16
J16
DEBIT
CREDIT
8
1 1
7
7
9
6
1
3
2
6
3
5
6
6
0
4
6
6
BALANCE
DEBIT
CREDIT
00
00
00
00
00
00
1
2
3
4
5
8
9
6
4
3
0
1
5
7
3
7
2
6
2
2
6
2
8
00
00
00
00
00
00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
PROBLEM 7.6B (continued)
GENERAL LEDGER
ACCOUNT NO. 401
ACCOUNT Sales
DATE
2013
June
DESCRIPTION
1
15
15
16
17
30
30
30
Post
Ref.
DEBIT
J15
J15
J15
J15
J15
J16
J16
J16
CREDIT
4
10
14
9
10
9
11
8
2
2
2
0
8
5
7
2
0
0
0
0
0
5
0
0
0
0
0
0
0
0
0
0
2013
June 15
19
30
DESCRIPTION
00
00
00
00
00
00
00
00
4
14
28
37
48
57
69
77
2
4
6
6
4
9
6
8
0
0
0
0
0
5
5
5
0
0
0
0
0
0
0
0
00
00
00
00
00
00
00
00
ACCOUNT NO. 521
ACCOUNT Credit Card Expense
DATE
BALANCE
DEBIT
CREDIT
Post
Ref.
J15
J16
J16
DEBIT
4 6 0 08
3 8 8 80
3 7 9 08
CREDIT
BALANCE
DEBIT
CREDIT
4 6 0 08
8 4 8 88
1 2 2 7 96
Analyze: The total credit card expense incurred in June is $1,227.96.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
CRITICAL THINKING PROBLEM 7.1
PAGE
GENERAL JOURNAL
DATE
1 2013
2 March
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Chapter 7
DESCRIPTION
1 Accounts Receivable/Mark Everest ($700 + $56)
Post
Ref.
111
✔
DEBIT
111
✔
1
2
3 2 4 00
7 0 0 00 3
5 6 00 4
5
6
7
8
Sales
Sales Tax Payable ($300 × 8%)
Sold merchandise on credit to Emily Ancheta,
Sales Slip 102
8 Sales Returns and Allowances
Sales Tax Payable
Accounts Receivable/Mark Everest
✔
3 0 0 00 9
2 4 00 10
11
12
13
14
15
1 0 8 00 16
✔
17
18
19
20
21
6 4 8 00 22
✔
23
24
25
1 0 0 00
8 00
111
Accept return of defective merchandise, Credit
Memorandum 1; original sales made on Sales
Slip 101 of March 1
10 Cash ($756 - $108)
Accounts Receivable/Mark Everest
6 4 8 00
111
Received cash from Mark Everest on account
12 Accounts Receivable/Annie Han ($450 + $36)
111
4 8 6 00
Sales
Sales Tax Payable ($450 × 8%)
Sold merchandise on credit to Annie Han,
Sales Slip 103
15 Cash ($5,000 + $400)
Sales
Sales Tax Payable ($5,000 × 8%)
Record cash sales, March 1 - 15
CREDIT
7 5 6 00
Sales
Sales Tax Payable ($700 × 8%)
Sold merchandise on credit to Mark Everest,
Sales Slip 101
3 Accounts Receivable/Emily Ancheta ($300 + $24)
1
5 4 0 0 00
4 5 0 00 26
3 6 00 27
28
29
30
31
5 0 0 0 00 32
4 0 0 00 33
34
35
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
CRITICAL THINKING PROBLEM 7.1 (continued)
PAGE
GENERAL JOURNAL
DATE
DESCRIPTION
Post
Ref.
1 2013
2 March 15 Credit Card Expense ($7,000 + $560) × 3%
3
Cash ($7,000 + $560 - $226.80)
4
Sales
5
Sales Tax Payable ($7,000 × 8%)
6
Record sales to customers using bank credit cards,
7
March 1 -15
8
9
25 Accounts Receivable / Jason Cataldo ($300 + $24)
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
3 2 4 00
3 2 4 0 00
3 0 0 00 10
2 4 00 11
12
13
14
2 2 6 80
7 3 3 3 20
111
✔
26 Accounts Receivable / American Express ($3,000 + $240)
111
✔
Sales
Sales Tax Payable ($3,000 × 8%)
Record sales to customers using American Express
28 Cash
Accounts Receivable / Annie Han
✔
3 0 0 0 00 15
2 4 0 00 16
17
18
19
1 0 0 00 20
✔
21
22
23
5 5 0 0 00 24
4 4 0 00 25
26
27
28
29
3 2 4 0 00 30
1 0 0 00
111
Received partial payment on account from Annie Han
31 Cash ($5,500 + $440)
Sales
Sales Tax Payable ($5,500 × 8%)
Record cash sales, March 16 - 31
5 9 4 0 00
31 Credit Card Expense ($3,240 × 4%)
Cash ($3,240 - $129.60)
Accounts Receivable / American Express
1 2 9 60
3 1 1 0 40
Received payment from American Express
32
33
34
35
36
37
38
31 Credit Card Expense ($4,000 + $320) × 3%
Cash ($4,000 + $320 - $129.60)
Sales
Sales Tax Payable ($4,000 × 8%)
Record sales to customers using bank credit cards,
March 16 – 31
111
CREDIT
1
2
3
7 0 0 0 00 4
5 6 0 00 5
6
7
8
9
Sales
Sales Tax Payable ($300 × 8%)
Sold merchandise on credit to Jason Cataldo, Sales Slip 104
31
Chapter 7
DEBIT
2
31
1 2 9 60
4 1 9 0 40
32
33
34
4 0 0 0 00 35
3 2 0 00 36
37
38
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
CRITICAL THINKING PROBLEM 7.1 (continued)
GENERAL LEDGER
ACCOUNT NO. 111
ACCOUNT Accounts Receivable
DATE
DESCRIPTION
2013
March 1
3
8
10
12
25
26
28
31
Post
Ref.
J1
J1
J1
J1
J1
J2
J2
J2
J2
DEBIT
CREDIT
7 5 6 00
3 2 4 00
BALANCE
DEBIT
CREDIT
1
1 0 8 00
6 4 8 00
4 8 6 00
3 2 4 00
3 2 4 0 00
1 0 0 00
3 2 4 0 00
1
4
4
1
7
0
9
3
8
1
3
2
0
5
8
7
2
1
3
7
7
3
6
0
2
4
0
4
4
4
4
00
00
00
00
00
00
00
00
00
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Emily Ancheta
ADDRESS
DATE
2013
March
DESCRIPTION
Sales Slip 102
Post
Ref.
J1
DEBIT
CREDIT
3 2 4 00
BALANCE
3 2 4 00
NAME American Express
ADDRESS
DATE
2013
March 26
31
Chapter 7
DESCRIPTION
Post
Ref.
J2
J2
DEBIT
CREDIT
3 2 4 0 00
3 2 4 0 00
BALANCE
3 2 4 0 00
- 0 -
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
CRITICAL THINKING PROBLEM 7.1 (continued)
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
NAME Jason Cataldo
ADDRESS
DATE
DESCRIPTION
2013
March 25 Sales Slip 104
NAME Mark Everest
ADDRESS
DATE
DESCRIPTION
2013
March 1 Sales Slip 101
8 CM 1
10
NAME Annie Han
ADDRESS
DATE
DESCRIPTION
2013
March 12 Sales Slip 103
28
Post
Ref.
J2
Post
Ref.
J1
J1
J1
Post
Ref.
J1
J2
DEBIT
CREDIT
3 2 4 00
DEBIT
3 2 4 00
CREDIT
7 5 6 00
1 0 8 00
6 4 8 00
DEBIT
BALANCE
CREDIT
4 8 6 00
1 0 0 00
BALANCE
7 5 6 00
6 4 8 00
- 0 -
BALANCE
4 8 6 00
3 8 6 00
Athletic X-Press Sporting Goods
Schedule of Accounts Receivable
March 31, 2013
Emily Ancheta
American Express
Jason Cataldo
Mark Everest
Annie Han
Total
Chapter 7
3
3
3
1 0
2
0
2
0
8
3
4
4
6
4
00
00
00
00
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
CRITICAL THINKING PROBLEM 7.2
1.
An electronic system would prevent this mistake because the computer would automatically post and update the
customer’s subsidiary ledger account. This mistake would not be identified in a manual system until the
Accounts Receivable general ledger account was reconciled to the schedule of accounts receivable.
2.
The use of an electronic scanner should reduce unrecorded sales. Each item has to be passed over the scanner,
which automatically records the price. This process reduces the chance that an item is overlooked; but with
either system, it is possible for the salesclerk to deliberately not charge a customer for a purchase. The owner
and supervisors must be alert to this possibility and need to check the salesclerk’s work on a regular basis
Discrepancies in the inventory may identify extensive abuses of this nature.
3.
The computer can be programmed to alert the salesclerk by means of a code number or flashing sign on the
register/terminal display screen that a particular credit card number has been reported stolen. The register/
terminal will halt processing the transaction or instruct the salesclerk to check with a supervisor before
proceeding with the transaction. With a manual system, the salesclerk would have to consult a separate list of
stolen numbers before processing a credit card transaction. Provided the stolen credit card numbers are entered
promptly in the computer files, the electronic system would prevent charging a sale on a stolen credit card.
4.
An electronic scanner would prevent customers from being charged an incorrect price. Because the computer
would be programmed with the sale prices, the scanner would automatically record the correct price. A manual
system depends on the salesclerk’s memory of price changes or requires new price tags to be placed on sale
items. An electronic system would be more dependable and efficient in this situation.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
Solutions to Business Connections
Managerial Focus:
1. Measures damaged or poor quality goods or late deliveries.
2. Advantages: minimized risk of receivable losses; reduced staffing costs. Disadvantages: discount fees; loss of
sales if customers do not have credit cards
3. Credit policies, customer account documentation.
4. The actual filing of a tax return is procedural, but expert advice is needed to comply with tax laws and minimize
taxes.
5. Increase sales volume.
6. Losses from uncollectible accounts.
7. Accurate and complete records.
8. Aid in extending credit, identify slow-paying customers.
Ethical Dilemma:
Watch when a customer pays a bill to see if Margarita puts the money in the cash register or just puts it in her pocket
and writes a credit memo to remove it from the Accounts Receivable Ledger.
Financial Statement Analysis:
1. Feb. 1 through Jan. 31.
2. Sales Returns and Allowances.
3. 14.4% ($77,349 - $66,176) ÷ $77,349 = 14.4%
Analyze Online:
Answers will vary depending on the year.
Teamwork:
Sales associate would not record a transaction. Louisa’s A/P clerk would process a purchase order for $50,000 and
record a debit to purchases and a credit to A/P. The A/R clerk would create a sales invoice and record a debit to A/R
and credit to Sales.
Internet Connection:
Auto creation of P.O. from Sales Order, create A/P and A/R Credit memos, quick conversion to other programs, invoice
customers, track payments and sales taxes, print checks and create purchase orders from estimates.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.
SOLUTIONS TO PRACTICE TEST
Part A True-False
1.
FALSE
2.
TRUE
3.
TRUE
4.
FALSE
5.
FALSE
6.
FALSE
7.
FALSE
8.
9.
10.
11.
12.
13.
14.
FALSE
TRUE
TRUE
TRUE
TRUE
FALSE
FALSE
15.
16.
17.
18.
19.
20.
TRUE
FALSE
TRUE
FALSE
FALSE
FALSE
Part B Matching
1.
g
2.
c
3.
e
4.
a
5.
b
6.
d
7.
f
Part C Exercises
1.
The balance was carried over from December 2012.
2.
By referring to a copy of Sales Slip 101.
3.
It was most likely a sales return or allowance. Refer to the January 17 entry on page 1 of the general journal.
Chapter 7
Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved.