| Book Edition | 22nd Edition |
| Author(s) | Heintz, Parry |
| ISBN | 9781305666160 |
| Publisher | Cengage |
| Subject | Accounting |
During the month of May 20--, David's Specialty Shop engaged in the following transactions:
| May | 1 | Sold merchandise on account to Molly Mac, $2,000, plus tax of $100. Sale No. 533. |
| 2 | Issued Check No. 750 to Kari Co. in partial payment of May 1 balance, $800, less 2% discount. | |
| 3 | Purchased merchandise on account from Scanlan Wholesalers, $2,000. Invoice No. 621, dated May 3, terms 2/10, n/30. | |
| 4 | Purchased merchandise on account from Simpson Enterprises, $1,500. Invoice No. 767, dated May 4, terms 2/15, n/30. | |
| 4 | Issued Check No. 751 in payment of phone expense for the month of April, $200. | |
| 8 | Sold merchandise for cash, $3,600, plus tax of $180. | |
| 9 | Received payment from Cody Slaton in full settlement of account, $2,500. | |
| 10 | Issued Check No. 752 to Scanlan Wholesalers in payment of May 1 balance of $1,200. | |
| 12 | Sold merchandise on account to Cody Slaton, $3,000, plus tax of $150. Sale No. 534. | |
| 12 | Received payment from Kori Reynolds on account, $2,100. | |
| 13 | Issued Check No. 753 to Simpson Enterprises in payment of May 4 purchase. Invoice No. 767, less 2% discount. | |
| 13 | Cody Slaton returned merchandise for a credit, $1,000, plus sales tax of $50. | |
| 17 | Returned merchandise to Johnson Essentials for credit, $500. | |
| 22 | Received payment from Natalie Gabbert on account, $1,555. | |
| 27 | Sold merchandise on account to Natalie Gabbert, $2,000, plus tax of $100. Sale No. 535. | |
| 29 | Issued Check No. 754 in payment of wages (Wages Expense) for the four-week period ending May 30, $1,100. |
Selected account balances as of May 1 were as follows:
| Account | Account No. | Debit | Credit |
|---|---|---|---|
| Cash | 101 | $10,050 | |
| Accounts Receivable | 122 | 6,900 | |
| Accounts Payable | 202 | $4,550 |
David's also had the following subsidiary ledger balances as of May 1: Accounts Receivable:
| Customer | Accounts Receivable Balance |
|---|---|
| Natalie Gabbert | |
| 12 Jude Lane | |
| Hartford, CT 06117 | $1,821 |
| Molly Mac | |
| 52 Juniper Road | |
| Hartford, CT 06118 | 279 |
| Kori Reynolds | |
| 700 Hobbes Dr. | |
| Avon, CT 06108 | 2,300 |
| Cody Slaton | |
| 5200 Hamilton Ave. | |
| Hartford, CT 06111 | 2,500 |
Accounts Payable:
| Vendor | Accounts Payable Balance |
|---|---|
| Johnson Essentials | |
| 34 Harry Ave. | |
| East Hartford, CT 05234 | $2,350 |
| Kari Co. | |
| 1009 Drake Rd. | |
| Farmington, CT 06082 | 1,000 |
| Scanlan Wholesalers | |
| 43 Lucky Lane | |
| Bristol, CT 06007 | 1,200 |
| Simpson Enterprises | |
| 888 Anders Street | |
| Newington, CT 06789 | — |
Record the transactions in the sales journal, cash receipts journal, purchases journal, cash payments journal, and general journal. Total, verify, and rule the columns where appropriate at the end of the month.
Image 1:
The sales journal is a special journal in accounting used to track sales transactions on account. To setup a sales journal, enter the details of the journal:
a) date of the transaction
b) sale number
c) name of the customer
d) amount of the transaction
The following accounts are affected and charged: a) accounts receivable is debited; b) sales is credited; and sales tax payable (if any) is credited.
The entry to record the sales on account on May 1 is a debit to accounts receivable of $2,100; a credit to sales of $2,000; and a credit to sales tax payable of $100. The corresponding sale number is entered on the sale number column.
The entry to record the sales on account on May 12 is a debit to accounts receivable of $3,150; a credit to sales of $3,000; and a credit to sales tax payable of $150.The corresponding sale number is entered on the sale number column.
The entry to record the sales on account on May 27 is a debit to accounts receivable of $2,100; a credit to sales of $2,000; and a credit to sales tax payable of $100. The corresponding sale number is entered on the sale number column.
The posting reference is marked with a check mark (✔) to indicate it has been posted.
The balances of the accounts are as follows:
Image 2:
The purchases journal is a special journal in accounting used to track purchases transactions on account. To setup a purchases journal, enter the details of the journal:
a) date of the transaction
b) invoice number
c) name of the vendor
d) amount of the transaction
The following accounts are affected and charged: a) purchases account is debited; and b) accounts payable is credited.
The entry to record the purchases on account on May 3 is a debit to purchases of $2,000 and a credit of accounts payable of $2,000.
The entry to record the purchases on account on May 4 is a debit to purchases of $1,500 and a credit of accounts payable of $1,500.
The posting reference is marked with a check mark (✔) to indicate it has been posted.
The balances of the accounts are as follows:
Image 3:
The cash payments journal is a special journal in accounting used to record cash payment transactions.. To setup a cash payments journal, enter the details of the journal:
a) date of the transaction
b) the account debited
The following accounts are affected and charged:
a) general account is debited
b) accounts payable is debited
c) purchases account is debited
d) purchases discount is credited
e) cash is credited
The entry to record the cash payment transaction on account on May 2 is a debit to accounts payable of $800; a credit to purchases discount of $16; and a credit to cash of $784. The corresponding check number is entered on the check number column.
The entry to record the cash payment transaction on account on May 4 is a debit to general account (phone expense) of $200; and a credit to cash of $200. The corresponding check number is entered on the check number column.
The entry to record the cash payment transaction on account on May 10 is a debit to accounts payable of $1,200; and a credit to cash of $1,200. The corresponding check number is entered on the check number column.
The entry to record the cash payment transaction on account on May 13 is a debit to accounts payable of $1,500; a credit to purchases discount of $30; and a credit to cash of $1,470. The corresponding check number is entered on the check number column.
The entry to record the cash payment transaction on account on May 29 is a debit to general account (wages expense) of $1,100; and a credit to cash of $1,100. The corresponding check number is entered on the check number column.
The posting reference is marked with a check mark (✔) for the vendor account indicate it has been posted.
The balances of the accounts are as follows:
( phone expense - $200 and wages expense - $1,100)
Image 4:
The cash receipts journal is a special journal in accounting used to record cash receipts from collections of sales on account and cash sales . To setup a cash receipts journal, enter the details of the journal:
a) date of the transaction
b) the account charged
c) amount of the transaction
The following accounts are affected and charged:
a) general account is credited
b) accounts receivable is credited
c) sales is credited
d) sales tax payable is credited
e) cash is debited
The entry to record the receipt of cash on account on May 8 is a debit to cash of $3,780; credit to sales of $3,600; and a credit to sales tax payable of $180.
The entry to record the receipt of cash on account on May 9 is a debit to cash of $2,500 and credit to accounts receivable of $2500.
The entry to record the receipt of cash on account on May 12 is a debit to cash of $2,100 and a credit to accounts receivable of $2,100.
The entry to record the receipt of cash on account on May 22 is a debit to cash of $1,555 and a credit to accounts receivable of $1,555.
The posting reference is marked with a check mark (✔) for the customer account to indicate it has been posted.
The balances of the accounts are as follows:
Image 5:
On the general journal, enter the following details:
a) date of the transaction
b) description
c) amount of the transaction
The entry to record the transaction on May 13 is debit to sales returns and allowances of $1,000; sales tax payable of $500; and credit to accounts receivable - customer CS of $1,500.
The entry to record the transaction on May 17 is a debit to accounts payable - vendor JE of $500 and a credit to purchases returns and allowances of $500
The posting reference is marked with a check mark (✔) for the vendor account and the corresponding account number for the account titles to indicate it has been posted.
