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Chapter 8 Accounting Information Systems

Questions

1. As a purchasing agent, Greg Timko will make daily use of the purchases journal and the inventory and accounts payable subledgers. He might discuss with personnel from other areas of the store the other journals and subledgers as his area impacts them or vice versa: sales journal, cash disbursements journal, and cash receipts journal along with the accounts receivable subledger.

2. Four types of transactions recorded in separate special journals are: (a) sales on credit, (b) purchases on credit, (c) cash receipts, and (d) cash disbursements.

3. Daily recording and posting of credit sales and cash receipts from customers provides up-to-date information used in decisions about granting credit to customers. Also, up-to-date account balances are needed if customers inquire about the amount of their balances.

4. Both kinds of credits should not be placed in the same column because the sum of the credits to the customer accounts must be posted to the Accounts Receivable controlling account. Placing these credits in a separate column makes it possible to post the column total to the controlling account.

5. The double posting does not cause the trial balance to be out of balance because only one credit is posted to the General Ledger.

6. The initial and page number of the journal from which the amount was posted is entered in the Posting Reference column of the ledger account.

Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 636

QUICK STUDY

Quick Study 8-11. P2. AR3. AR4. AP

Quick Study 8-2Input (I)

orOutput

(O)1. I2. I3. O4. O5. I6. O7. O8. I

Quick Study 8-3

a. Sales Journalb. Purchases Journalc. Cash Disbursements Journald. Cash Disbursements Journale. Purchases Journalf. Cash Receipts Journalg. Cash Receipts Journal

Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.637 Fundamental Accounting Principles, Twelfth Canadian Edition

Quick Study 8-4Nov.12 Automobiles ...................... 15,000

Capital, Jesse Cooke ...... 15,000The owner contributed an automobile to the business.

19 Sales Returns and Allowances 150Accounts Receivable—R. Wyder

150Customer returned merchandise.

19 Merchandise Inventory....... 95Cost of goods sold......... 95

Merchandise returned to inventory.

28 Accounts Payable—The Ringdol Company 170Merchandise Inventory . . 170

Returned defective merchandise.

Quick Study 8-5Debit (DR),Credit (CR), or No Effect (NE)

1. DR2. NE3. NE4. CR5. NE6. CR7. NE

Quick Study 8-6Debit (DR),Credit (CR), or No Effect (NE)

1. CR2. NE3. CR


4. NE5. DR6. DR7. NE


Quick Study 8-7

Sales Journal Page 1

DateAccount Debited

Invoice Numbe

r PRAccounts

Receivable Dr. Sales Cr.

Cost of Goods Sold Dr.

Merchandise Inventory Cr.

2011Mar.

3T. Edson 1103 3,000 2,040

10 Willis Company

1104 10,800 7,34425 Ellton

Kingston1105 7,400 5,032

Quick Study 8-8

Cash Receipts Journal Page 1

DateAccount Credited PR

Explanation

Cash Dr.

Sales Discount Dr.

Accounts

Receivable Cr.

Sales

Cr.Other Accounts Cr.

Cost of Goods

Sold Dr.Merchand

ise Inventory

Cr.2011

Mar. 18

T. Edson Invoice #1103

2,940

60 3,00030 Willis

CompanyInvoice #1104

10,800

10,80031 ABC Cash sale 6,20 6,2 4,216

Copyright © 2007 by M

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ited. All rights reserved.Solutions M

anual for Chapter 8639

Company 0 00

Quick Study 8-9Purchases Journal Page 1

Date Account CreditedDate of Invoice Terms PR

Accounts

Payable Cr.

Merchandise Inventory Dr.

Office Supplies

Dr.

Other Account

s Dr.2011Mar. 2 Tex Company Mar 2 3/10,

n204,800 4,800

12 Littleton 12

2/15, n30

14,000 14,000

13 Worsley 13

2/15, n45

9,400 9,400

Quick Study 8-10Cash Disbursements Journal Page 1

Date

Ch.

No. Payee

Account Debited

PR

Cash Cr.

Merchandise

Inventory Cr.

Other Accounts

Dr.Accounts Payable

Dr.2011Mar.

14101

Tex Company

Tex Company

4,800 4,80027 10

2Littleton Littleton 13,720 280 14,000

31 103

Thorn Real Estate

Rent Expense

6,500 6,500


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Fundamental Accounting Principles, Tw

elfth Canadian Edition

EXERCISES

Exercise 8-1 (15 minutes)Sales Journal Page 1

DateAccount Debited

Invoice Number PR

Accounts Receivable Dr.

Sales Cr.



2011Feb. 7 J. Eason 5704 1,150 700

12 P. Lathan 5705 320 17025 S. Summers 5706 550 300

*Exercise 8-2 (15 minutes)

SALES JOURNAL Page 2Invoic

eA/R Dr.

Date Account Debited Number

PR Sales Cr.

2011Feb.

7 J. Eason 5704 1,150

12 P. Lathan 5705 32025 S. Summers 5706 550

Exercise 8-3 (20 minutes)Cash Receipts Journal Page 1

Date Account Credited

PR Explanation Cash Dr.

Sales Discount Dr.

Accounts

Receivable Cr.

Sales Cr.

Other Accounts Cr.

Cost of Goods

Sold Dr.Merchandi

se


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Inventory Cr.

2011Sept.9 Notes

payableNote to bank 5,50

05,500

13 Dale Trent, capital

Owner investment

7,000

7,000

18 Sales Cash sale 460 460 28027 J. Namal Invoice,

Sept. 71,76

436 1,800

*Exercise 8-4 (20 minutes)CASH RECEIPTS JOURNAL Page 2

Sales Accts. OtherAccount Cash Disc. Rec. Sales Accts.

Date Credited Explanation PR Debit Debit Credit Credit Credit2011

Sept.

9 Notes payable

Note to bank

5,500 5,500

13

Dale Trent, capital

Owner investment

7,000 7,000

18

Sales Cash sale 460 460

27

J. Namal Invoice, Sept. 7

1,764 36 1,800

Exercise 8-5 (20 minutes)Purchases Journal Page 1


Date of

Invoice Terms PR

Accounts

Payable Cr.

Merchandise

Inventory Dr.

Office Supplies

Dr.

Other Account

s Dr.2011

July 1 Angler, Inc. Jul

1 n/30 8,100 8,100

14 Store Supplies/ Steck Company

Jul

14

2/10, n/30

240 240

17 Marten Company Jul

17

n/30 2,600 2,600

Exercise 8-6 (20 minutes)PURCHASES JOURNAL

Page 2Account Office Other


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sDate

ofPayable Purchas

esSuppli

esAccoun

tsDate Account Credited Invoi

ceTerms PR Credit Debit Debit Debit

2011July 1 Angler, Inc. July

1n/30 8,100 8,100

14 Store Supplies/Steck Company

July 14

2/10,n/30

240 240

17 Marten Company July 17

n/30 2,600 2,600

Exercise 8-7 (20 minutes)Cash Disbursements Journal Page 1

DateCh. No. Payee

Account Debited PR

Cash Cr.

Merchandise

Inventory Cr.

Other Accounts

Dr.

Accounts Payable

Dr.2011

Mar. 9

210 Narlin Corp. Store Supplies

900 900

17 211 City Bank Notes Payable

3,000 3,000

29 212 LeBaron LeBaron 6,860 140 7,00031 213 E. Brandon Salaries

Expense3,400 3,400

31 214 Pace, Inc. Pace, Inc. 5,500 5,500

*Exercise 8-8 (20 minutes)CASH DISBURSEMENTS JOURNAL Page 2

Purchase

Other Accts.

Ch.

Cash Discount

Accts. Payable

Date No.

Payee Account Debited PR Credit Credit Debit Debit

2011Mar.

9 210

Narlin Corp. Store Supplies 900 900

17

211

City Bank Notes Payable 3,000 3,000

29

212

LeBaron LeBaron 6,860 140 7,000

31

213

E. Brandon Salaries Expense 3,400 3,400


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31

214

Pace, Inc. Pace, Inc. 5,500 5,500

Exercise 8-9 (30 minutes)Part 1 – Wilson Purchasing

Purchases Journal Page 1


Date of

Invoice Terms PR

Accounts

Payable Cr.

Merchandise

Inventory Dr.

Office Supplies

Dr.

Other Account

s Dr.2011

May 11

Hostel Sales May

11

3/10, n/90

30,000 30,000

Cash Disbursements Journal Page 1

DateCh. No. Payee

Account Debited PR

Cash Cr.

Merchandise

Inventory Cr.

Other Accounts

Dr.

Accounts Payable

Dr.2011

May 11

84 Express Shipping

Merchandise Inv.

335 335

20 85 Hostel Sales Hostel Sales 27,9361 864 28,800

General Journal Page: 1Date Account Titles and Explanations P

RDebi

tCred

it2011Ma

y12

Accounts Payable – Hostel Sales 1,200

Merchandise Inventory.......... 1,200

To record return of merchandise.


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Calculations:1. 30,000 – 1,200 = 28,800; 28,800 x 3% = 864; 28,800 – 864 = 27,936.

Exercise 8-9 (concluded)Part 2 – Hostel Sales


DateAccount Debited

Invoice Number PR

Accounts Receivable Dr.

Sales Cr.



2011May 11

Wilson Purchasing

1601 30,000 20,000

Cash Receipts Journal Page 1

DateAccount Credited

PR Explanation

Cash Dr.

Sales Discount Dr.

Accounts

Receivable Cr.

Sales Cr.

Other Accounts Cr.

Cost of Goods

Sold Dr.Merchandi

se Inventory

Cr.2011

May 21

Wilson Purchasing

Wilson Purchasing

27,9361

864 28,800


RDebi

tCred

it2011Ma

y12

Sales Returns and Allowances.... 1,200

Accounts Receivable – Wilson Purchasing...............................

1,200

To record sales return.Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.651 Fundamental Accounting Principles, Twelfth Canadian Edition


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12

Merchandise Inventory.............. 800

Cost of Goods Sold............... 800To record cost of merchandise returned to inventory.

Calculations:1. 30,000 – 1,200 = 28,800; 28,800 x 3% = 864; 28,800 – 864 = 27,936.

*Exercise 8-10 (30 minutes)Part 1 – Wilson Purchasing

PURCHASES JOURNAL Page 2

Accounts

Office Other

Date Payable Purchases

Supplies

Accounts

Date Account Credited Invoi Terms PR Credit Debit Debit Debit

2011M 11 Hostel Sales May 3/10,n

/90

30,000 30,000

CASH DISBURSEMENTS JOURNAL Page 2Purcha

se

Other Accts.

Ch Cash Discount

Accts. Payable

Date No Payee Account Debited PR Credit Credit Debit Debit

2011Ma 1 84 Express

Shipping

Transportation-In 335 335

2 85 Hostel Sales A/P – Hostel Sales 27,936

864 28,800


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General Journal Page: 1Date Account Titles and Explanations P Debi

tCred

it

2011Ma 1 Accounts Payable – Hostel Sales 1,20

0 Purchase Returns and

Allowances ........................1,20

0To record return of merchandise

purchased.

*Exercise 8-10 (concluded)Part 2 – Hostel Sales


eA/R Dr.


PR Sales Cr.

2011May

11 Wilson Purchasing 1601 30,000

CASH RECEIPTS JOURNAL Page 2Sales Accts. Other

Account Cash Disc. Rec. Sales Accts.Date Credited Explanation PR Debit Debit Credit Credit Credit2011

May

21

Wilson Purchasing

Sale of May 11

27,936

864 28,800


RDebi

tCred

it2011Ma

y12


Accounts Receivable – Wilson Purchasing...............................

1,200

To record sales return.


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Exercise 8-11 (10 minutes)The June 5 purchase would have been recorded in the Purchases Journal and the June 14 payment would have been recorded in the Cash Disbursements Journal. The error in journalizing the June 14 transaction should be discovered in the process of crossfooting the Cash Disbursements Journal at the end of the month.

Exercise 8-12 (10 minutes)

a. When the schedule of accounts payable is prepared.b. When crossfooting the Purchases Journal.c. When the trial balance is prepared.d. When the schedule of accounts payable is prepared.e. When the schedule of accounts payable is prepared.


Exercise 8-13 (30 minutes)Part 1

ACCOUNTS RECEIVABLE SUBLEDGERSanders Farrell Don Holland Brad Smithers

May 171,700

May 20 500 May 103,880

25 680

May 65,760

Bal. 1,200 Bal. 4,560

Part 2GENERAL LEDGER

Accounts Receivable SalesSales Returns

and AllowancesMay 31

12,020May 20500 May 31

12,020May 20

500Bal. 11,520

Part 3VALUE-MART GOODS

Schedule of Accounts ReceivableMay 31, 2011

Sanders Farrell.................... $ 1,200Dan Holland........................ 4,560Brad Smithers..................... 5,760Total accounts receivable..... $11,520

Accounts Receivable Controlling Account

Total debit.......................... $12,020Credit for return.................. (500)Balance as of May 31, 2011. . $11,520


*Exercise 8-14 (35 minutes)GENERAL LEDGER

Cash Accounts Payable Sales Discounts38,878 23,044 1,500

18,30023,200 472

Accounts Receivable

Notes Payable Purchases

26,200 60023,600

9,000 23,200

Prepaid Insurance SalesPurchase Returns

and Allowance1,700 26,200

5,7501,500

Store EquipmentSales Returns

and AllowancesPurchase Discounts

3,500 1,000 600 456

ACCOUNTS RECEIVABLE SUBLEDGERJack Hertz Trudy Stone Dave Waylon7,400 600

6,80016,800 16,800 2,000

ACCOUNTS PAYABLE SUBLEDGERGrass Corp. McGrew Company Sulter, Inc.1,5009,300

10,800 3,400 9,000 9,000


*Exercise 8-15 (30 minutes)Part 1

ACCOUNTS RECEIVABLE SUBLEDGERAdrian Carr Lisa Mack

Jan. 8

7,076 Jan. 14

23,780

Jay Newton Kathy OliviasJan.

229

4,1768,468

Jan. 10

20

15,544

12,992

Part 2Jan.31 Accounts Receivable................. 72,036

Sales.................................. 62,100 GST Payable........................ 3,726 PST Payable........................ 6,210

Part 3GENERAL LEDGER

Accounts Receivable SalesJan.

3172,03

662,10

0Jan. 3

1

Part 4SKILLERN COMPANY

Schedule of Accounts ReceivableJanuary 31, 2011

Adrian Carr .................... $ 7,076Lisa Mack ....................... 23,780Jay Newton .................... 12,644Kathy Olivas .................. 28,536Total accounts receivable $72,036

Copyright © 2002 by McGraw-Hill Ryerson Limited. All rights reserved.659 Fundamental Accounting Principles, Tenth Canadian Edition

*Exercise 8-16 (20 minutes)Sales Journal Page X

Date Account DebitedInvoice

No. PR A/R Dr

PST Payable

CR

GST Payable

CR Sales Cr

COGS DR Merchandi

se Inventory

CR2011Aug.5 Jay Smith 50 50,160 3,520 2,640 44,000 21,000

11 Dee Oliver 51 38,760 2,720 2,040 34,000 16,200

Cash Receipts Journal Page X


Explanation PR

Other Accounts CR

A/R CR

PST Payable CR

GST Payable CR

Sales CR

Cash DR

Sales

Disc Dr

COGS/DR Merchandi

se Inventory/

CR2011Aug.

20Jay Smith Inv. 50 50,1

6050,160

21 Dee Oliver Inv. 51 38,760

38,420 340*

Purchases Journal Page X

Date Account Credited Terms PR A/P CR

Merchandise

Inventory DR

Other Accounts

DR

GST Rec’ble

DR2011Aug.1 Arden Sheet

Metal2/10, n/30

10,600 10,000 600

7 JayCee Equipment n/30

6,360 6,000 360


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Cash Disbursements Journal Page X

Date Ch # Account Debited PR

Other Accounts

DR

GST Rec’ble

DR A/P DR

Merchandise

Inventory CR Cash CR

2011Aug.

1028 A/P – Arden Sheet

Metal10,600 200 10,400

*Discount on sales amount only

*Exercise 8-17 (20 minutes)SALES JOURNAL Page X

Accts. PST GSTInvoice Rec. Payable Payable Sales

Date

Account Debited Number PR Debit Credit Credit Credit

2011

Aug.

5 Jay Smith 50 50,160 3,520 2,640 44,000

11 Dee Oliver 51 38,760 2,720 2,040 34,000

CASH RECEIPTS JOURNAL Page XOther Accts. PST GST SalesAccts. Rec. Payable Payable Sales Cash Discoun

tDate Account

CreditedExplanatio

nPR Credit Credit Credit Credit Credit Debit Debit

2011Aug.

20A/R – Jay Smith

Inv. 50 50,160 50,160

21 A/R – Dee Oliver

Inv. 51 38,760 38,420 340

PURCHASES JOURNAL Page X

Accts. Other GSTDate

ofPayable Purchase

sAccounts Rec’ble

Date Account Credited Invoice

Terms PR Credit Debit Debit Debit

2011


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Aug. 1 Arden Sheet Metal Aug. 1

2/10,n/30

10,600 10,000 600

7 JayCee Equipment Aug. 7

n/30 6,360 6,000 360

CASH DISBURSEMENTS JOURNAL Page XOther GST Accts. Pur.

Ch.

Accts. Rec’ble

Payable

Disc. Cash

Date No.

Payee Account Debited PR Debit Debit Debit Credit Credit

2011Aug.1

028 A/P – Arden Arden Sheet

Metal10,600 200 10,400

PROBLEMSProblem 8-1A (20 minutes)

Date Transaction

Special

Journal

Subledger

Mar. 1

Sold merchandise on credit. S AR/MI

2 Defective merchandise sold on March 1 was returned by the customer. It was scrapped.

G AR

3 Purchased office equipment on credit. P AP

5 Received payment regarding the March 1 sale.

CR AR

10 Received a credit memorandum from the supplier regarding defective equipment purchased on March 3.

G AP

14 Sold merchandise for cash. CR MI

16 Purchased merchandise inventory on credit; terms 1/5, n/30.

P AP/MI

17 Paid the balance owing regarding the March 3 transaction.

CD AP

18 Purchased merchandise inventory for cash.

CD MI

21 Paid for the merchandise purchased on March 16.

CD AP/MI

22 Sold old equipment for cash. CR NE

30 Paid salaries for the month of March. CD NE


30 Accrued utilities for the month of March.

G A/P

30 Closed the credit balance in the income summary to capital.

G NE


Problem 8-2A (40 minutes)Sales Journal Page

1


No. PRA/R Dr. Sales Cr.

COGS Dr.Merchandise Inventory Cr.

2011Apr. 2 Tim Bennett 306 35,000 22,750

5 Brian Kennedy 311 42,000 27,30016 Wynne Walsh 312 14,000 9,10024 Brian Kennedy 313 18,000 11,700

Cash Receipts Journal Page: 1


Explanation

Cash Dr.

Sales Disc Dr.

A/R Cr.

Sales Cr.

Other Account

s Cr.

COGS/Dr.

Merchandise

Inventory/ Cr.

2011Apr. 3 Sales (cash

sales)Inv. 307-

31015,00

015,000 9,750

12 A/R – Tim Bennett

Inv. 306 34,300

700 35,000

20 A/R – Brian Kennedy

Inv. 311 42,000

42,000

27 A/R – Wynne Walsh

Inv. 312 11,000

11,000



Date of Invoice Terms PR

A/P Cr.

Merchandise

Inventory Dr.

Office Supplies

Dr.

Other Accounts

Dr.


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2011Apr. 4 Wallace

BrothersApr. 4 1/10,

n/3048,00

048,000

11 McKinley & Sons Apr. 11 n/30 56,000

56,000

23 Zardon Co. — Equip.

Apr. 23 1/15, n/30

3,800 3,800

Problem 8-2A (concluded)Cash Disbursements

JournalPage 1

DateCh # Account Debited PR Cash Cr.

Merchandise

Inventory Cr.

Other Accounts

Dr. A/P Dr.2011Apr. 9 620 Office Supplies 230 230

13 621 Wallace Brothers 43,3621 438 43,80026 622 McKinley & Sons 56,000 56,00030 623 Salaries 36,000 36,000

Calculation:1. 48,000 – 4,200 = 43,800 Dr to A/P; 43,800 x 1% = 438; 43,800 – 438 = 43,362 Cr to Cash

General Journal Page: 1 Date Account Titles and Explanations P

RDebi

tCred

it2011

Apr.

6 Accounts Payable – Wallace Brothers...................................

4,200

Merchandise Inventory.......... 4,200

To record return of defective merchandise.

19


Accounts Receivable – Wynne Walsh.......................................

3,000


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To record allowance granted regarding defective merchandise.

Problem 8-3A (40 minutes)Note: Since posting to the General Ledger was not a requirement in this problem, posting references are shown for values posted to the subledgers only.

Part 3 Sales Journal Page 3





2011Apr. 3 Linda Hobart 760 3,000 1,800

5 Paul Abrams 761 8,000 4,50011 Kelly Schaefer 762 9,500 5,00013 Linda Hobart 763 4,100 2,400



Explanation

Cash Dr.

Sales Disc Dr. A/R Cr.

Sales Cr.

Other Accounts Cr.

COGS Dr.

Merchandise

Inventory Cr.

2011Apr.

13Linda Hobart

Sale of Apr. 3

2,940 60 3,000

14 Paul Abrams

Sale of Apr. 5

7,840 160 8,000

16 Sales Cash sales 50,840 50,840 28,000


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Problem 8-3A (continued) PURCHASES JOURNAL Page 3

Accts. Merchandise

Office Other

Date of

Payable

Inventory

Supplies

Accts.



2011 Apr.

2 Baskin Company Apr 2

2/10,n/60

13,300 13,300

3 Eau Claire Inc. Apr 2

n/10 EOM

1,380 1,380

9 Store Equip./Frank’s Supply

Apr 9

n/10 EOM

11,125 11,125

CASH DISBURSEMENTS JOURNAL Page 3Merchan

diseOther Accts.

Ch.

Cash Inventory

Accts. Payable

Date No.


2011Apr.

4 587

The Record Advertising Expense

999 999

12

588

Baskin Company

Baskin Company 13,034 266 13,300

16

589

Payroll Sales Salaries Expense

9,750 9,750


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GENERAL JOURNAL Page 3Date Account Titles and Explanations PR Debit

Credit2011Apr. 6 Accounts Payable—Eau Claire Inc. 85

Office Supplies....................... 85Returned office supplies.

Problem 8-3A (concluded) Parts 1, 3ACCOUNTS RECEIVABLE SUBLEDGER

Paul AbramsDate Explanation PR Debit Credit Balan

ce2011

Apr.

5 S3 8,000 8,000

14

CR3 8,000 0

Linda HobartDate Explanation PR Debit Credit Balan

ce2011

Apr.

3 S3 3,000 3,000

13

CR3 3,000 0

13

S3 4,100 4,100

Kelly SchaeferDate Explanation PR Debit Credit Balan

ce2011

Apr.

11

S3 9,500 9,500

Parts 2, 3ACCOUNTS PAYABLE SUBLEDGER

Frank’s SupplyDate Explanation PR Debit Credit Balanc

e2011

Apr.

9 P3 11,125 11,125

Baskin CompanyDate Explanation PR Debit Credit Balanc

e2011

Apr 2 P3 13,300 13,300


. 12

CD3

13,300 0

Sprocket CompanyDate Explanation PR Debit Credit Balanc

e2011

Eau Claire Inc.Date Explanation PR Debit Credit Balanc

e2011

Apr.

3 P3 1,380 1,380

6 G3 85 1,295


Problem 8-4A (70 minutes)Parts 2, 3, 4






2011Apr. 3 Linda Hobart 760 3,000 1,800

5 Paul Abrams 761 8,000 4,50011 Kelly Schaefer 762 9,500 5,00013 Linda Hobart 763 4,100 2,40027 Paul Abrams 764 3,070 1,60027 Kelly Schaefer 765 5,700 3,000 30 Totals 33,370 18,300

(106/413)

(502/119)



Explanation

Cash Dr.

Sales Disc Dr. A/R Cr.

Sales Cr.

Other Accounts Cr.

COGS Dr.

Merchandise

Inventory Cr.

2011Apr.

13Linda Hobart

Sale of Apr. 3

2,940 60 3,000

14 Paul Abrams

Sale of Apr. 5

7,840 160 8,000

16 Sales Cash sales 50,840 50,840 28,00018 L.T. Notes

Payable251

Note to bank

50,000 50,000

20 Kelly Schaefer Sale of 9,310 190 9,500


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Apr. 1123 Linda Hobart Sale of

Apr. 134,018 82 4,100

30 Sales Cash sales 70,97 5

70,9 75

37,000

30 Totals 195,923

492 24,600 121,815

50,000 65,000

(101) (415) (106) (413) (X) (502/119)

Problem 8-4A (continued) PURCHASES JOURNAL Page 3

Accts. Merchandise

Office Other

Date of

Payable

Inventory

Supplies

Accts.



2011 Apr.

2 Baskin Company Apr 2

2/10,n/60

13,300 13,300

3 Eau Claire Inc. Apr 2

n/10 EOM

1,380 1,380


Apr 9

n/10 EOM

165/

11,125 11,125

17

Sprocket Company Apr 16

2/10,n/30

12,750 12,750

20

Store Supplies/Frank’s Supply

Apr 19

n/10 EOM

125/

730 730

25

Baskin Company Apr 24

2/10,n/60

10,375 10,375

30

Totals 49,660 36,425 1,380 11,855

(201)

(119)

(124)

(X)


diseOther Accts.

Ch.

Cash Inventory

Accts. Payable


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Date No.


2011Apr.

4 587

The Record Advertising Expense

655

999 999

12

588

Baskin Company

Baskin Company 13,034 266 13,300

16

589


621

9,750 9,750

26

590

Sprocket Company

Sprocket Company

12,1031

247 12,350*

30

591


621

9,750 9,750

30

Totals 45,636 513 20,499 25,650

(101)

(119) (X) (201)

Calculation:1. $12,750 – $400 credit memorandum = $12,350; $12,350 x 2% = $247; $12,350 - $247 = $12,103

Problem 8-4A (continued)


Credit2011Apr. 6 Accounts Payable—Eau Claire Inc. 201/ 85

Office Supplies....................... 124 85Returned office supplies.

23 Accounts Payable—Sprocket Company 201/400

Merchandise Inventory........... 119 400Returned merchandise.

Parts 1, 2, 3, 4GENERAL LEDGER

Cash Acct. No. 101Date Explanation PR Debit Credit Balanc

e2011

Mar.

31

Balance Forward 167,000

Apr.

30

CR3 195,923

362,923

30

CD3

45,636 317,287

Accounts Receivable Acct. No. 106Date Explanation PR Debit Credit Balanc

e2011

Apr.

30

S3 33,370

33,370

30

CR3 24,600 8,770

Merchandise Inventory Acct. No. 119Date Explanation PR Debit Credit Balanc

e2011

Mar.

31


Apr 2 G3 400 94,600


. 330

S3 18,300 76,300

30

CR3 65,000 11,300

30

P3 36,425

47,725

30

CD3

513 47,212

Office Supplies Acct. No. 124

Date Explanation PR Debit Credit

Balance

2011Apr. 3 P3 1,380 1,380

6 G3 85 1,295

Problem 8-4A (continued)Store Supplies Acct. No.

125Date Explanation PR Debit Credi

tBalance

2011Apr. 2

0P3 730 730

Store Equipment Acct. No. 165


Balance

2011Apr. 9 P3 11,12

511,125

Accounts Payable Acct. No. 201


Balance

2011Apr. 6 G3 85 (85)

23

G3 400 (485)

30

P3 49,660

49,175


30

CD3

25,650

23,525

Long-Term Notes Payable Acct. No. 251Date Explanation PR Debit Credit Balanc

e2011

Mar.

31


Apr.

18

CR3 50,000 217,000

Jeff Newton, Capital Acct. No. 301Date Explanation PR Debit Credit Balanc

e2011

Mar.

31

Balance forward 95,000

Sales Acct. No. 413Date Explanation PR Debit Credit Balanc

e2011

Apr.

30

S3 33,370 33,370

30

CR3 121,815

155,185

Sales Discounts Acct. No. 415Date Explanation PR Debit Credit Balanc

e2011

Apr.

30

CR3 492 492


Problem 8-4A (continued) Cost of Goods Sold Acct. No. 502

Date Explanation PR Debit Credit Balance

2011Apr.

30

S3 18,300

18,300

30

CR3 65,000

83,300

Sales Salaries Expense Acct. No. 621


Balance

2011Apr. 1

6CD3

9,750 9,750

30

CD3

9,750 19,500

Advertising Expense Acct. No. 655


Balance

2011Apr. 4 CD

3999 999

ACCOUNTS RECEIVABLE SUBLEDGERPaul Abrams


2011Apr.

5 S3 8,000 8,000

14

CR3 8,000 0

27

S3 3,070 3,070


ce


2011Apr.

3 S3 3,000 3,000

13

CR3 3,000 0

13

S3 4,100 4,100

23

CR3 4,100 0


ce2011

Apr.

11

S3 9,500 9,500

20

CR3 9,500 0

27

S3 5,700 5,700

Problem 8-4A (continued)ACCOUNTS PAYABLE SUBLEDGER


e2011

Apr.

9 P3 11,125 11,125

20

P3 730 11,855


e2011

Apr.

2 P3 13,300 13,300

12

CD3

13,300 0

25

P3 10,375 10,375

Sprocket Company



2011Apr.

17

P3 12,750 12,750

23

G3 400 12,350

26

CD3

12,350 0


e2011

Apr.

3 P3 1,380 1,380

G3 85 1,295


Problem 8-4A (continued) Part 5NEWTON COMPANY

Schedule of Accounts ReceivableApril 30, 2011

Paul Abrams ................. $3,070Kelly Schaefer................ 5,700Total accounts receivable $8,770

NEWTON COMPANYSchedule of Accounts Payable

April 30, 2011Frank’s Supply .................................$11,855Baskin Company ............................... 10,375Eau Claire Inc. .................................. 1,295Total accounts payable .....................$23,525

NEWTON COMPANYTrial BalanceApril 30, 2011

Account Debit CreditCash ............................................$317,287Accounts receivable...................... 8,770Merchandise inventory.................. 47,212Office supplies ............................. 1,295Store supplies ............................. 730Store equipment .......................... 11,125Accounts payable ......................... $ 23,525Long-term notes payable ............. 217,000Jeff Newton, capital...................... 95,000Sales............................................ 155,185Sales discounts............................ 492Cost of goods sold........................ 83,300Sales salaries expense ................. 19,500Advertising expense .................... 999 Totals ..........................................$490,710......................................$490,710


Problem 8-4A (concluded)Analysis component:To find the error(s),

first re-add the account balances on the schedule of accounts receivable to confirm that the addition was correct.

trace the balances listed on the schedule of accounts receivable back to the subsidiary accounts to confirm that they were listed correctly on the schedule.

recalculate the balance of each subsidiary account to confirm that the additions and subtractions were correct.

trace the postings from each subsidiary account and from the controlling account back to the appropriate journals.

Since the sales and cash receipts journals were footed and crossfooted before posting, the previous steps should disclose the error.


Problem 8-5A (120 minutes)Parts 1, 2, 3

SALES JOURNAL Page 3

Date Account DebitedInvoic

e Numb

er

PRA/R. Dr.Sales

Cr.

Cost of Goods Sold Dr. Merchandise

Inventory Cr.

2011Oct.

6 Marge Craig 913 3,300 1,600

12 Vickie Foresman 914 3,650 1,90015 Amy Ihrig 915 3,100 1,70016 Vickie Foresman 916 7,700 3,90024 Bill Grigsby 917 1,200 700 31 Totals 18,950 9,800

(106/413)

(502/119)

CASH RECEIPTS JOURNAL Page 3

Date

AccountCredited Explanatio

n

PR

Cash Debit

SalesDiscount

Debit

Acct. Rec. Credit

Sales Credit

Other

Accts. Credit



2011Oct. 2

Bill Grigsby Invoice Nov 23

4,116 84 4,200

15 Sales Cash sales 38,830 38,830

21,400


cGraw

-Hill Ryerson Lim




15 Marge Craig

Invoice Dec 6

2,401 49 2,450*

22 Vickie Foresman

Invoice Dec 12

3,577 73 3,650

25 Amy Ihrig Invoice Dec 15

2,548 52 2,600**

29 Office Supplies

Sold supplies

124

50 50

31 Sales Cash sales 29,600

29,600

16,300

31 Totals 81,122 258 12,900

68,430

50 37,700

(101)

(415)

(106) (413)

(X) (502/119)

* $3,300 – $850 return = $2,450** $3,100 – $500 allowance = $2,600



Date Account CreditedDate

of Invoi

ce Terms PR

Accounts

Payable

Credit

Merchandise

Inventory Debit

Office Suppli

es Debit

Other Accts. Debit

2011Oct.

2 Shore Company Oct 2

2/10, n/60

3,200 3,200

5 Brown Supply Co. Oct 3

n/10 EOM

1,300 1,300

15

Shore Company Oct 15

2/10, n/60

3,990 3,990

15

Sunshine Company Oct 15

2/10, n/60

2,650 2,650

17

Brown Supply Co. Oct 16

n/10 EOM

615 615

21

Store Equip./Brown Supply Co.

Oct 21

n/10 EOM

165/

6,700 6,700

26


2/10, n/60

8,100 8,100

31

Totals 26,555 19,240 615 6,700

(201)

(119)

(12

4)

(X)


cGraw

-Hill Ryerson Lim




CASH DISBURSEMENTS JOURNAL Page 4

Date

Ch. No.

Payee Account Debited

PRCash Credi

t

Merchandise

Inventory.

Credit

Other Accts. Debit

Accts.

Payable

Debit.2011

Oct.

2 619

Omni Realty Co.

Rent Expense 640

2,250

2,250

6 620

Fireside Company

Fireside Company

3,724

76 3,800

12

621

Shore Company

Shore Company 3,136

64 3,200

15

622

Jamie Green Sales Salaries Expense

621

2,020

2,020

23

623

Sunshine Company

Sunshine Company

2,597

53 2,650

24

624

Shore Company

Shore Company 2,891

59 2,950*

30

625

Ken Shaw Ken Shaw, Withdrawals

302

2,500

2,500

31

626

Jamie Green Sales Salaries Expense

621

2,020

2,020

31

627

Countrywide Elec.

Utilities Expense 690

71 0

710

31

Totals 21,848

252 9,500 12,600

(101)

(119) (X)

(201)

* $3,990 – $1,040 return = $2,950


cGraw

-Hill Ryerson Lim




Problem 8-5A (continued)GENERAL JOURNAL Page

2Date

Account Titles and Explanations PR Debit

Credit

2011Oct.

4 Accounts Payable—Fireside Company...................................

201/

460

Merchandise Inventory.......... 119 460 Returned merchandise to supplier.

9 Sales Returns and Allowances..... 414 850 Accounts Receivable—Marge Craig.........................................

106/

850

Merchandise Inventory............... 119 430 Cost of Goods Sold................ 502 430 Customer Marge Craig returned merchandise that was returned to merchandise inventory.

17

Accounts Payable—Shore Company...................................

201/

1,040

Merchandise Inventory.......... 119 1,040 Returned merchandise.

18

Accounts Payable—Brown Supply Co. ...........................................

201/

40

Office Supplies..................... 124 40 Returned office supplies.

20

Sales Returns and Allowances..... 414 500

Accounts Receivable—Amy Ihrig.........................................

106/

500

Customer Amy Ihrig returned defective merchandise.


Problem 8-5A (continued)ACCOUNTS RECEIVABLE SUBLEDGER

Marge CraigDate Explanation PR Debit Credit Balanc

e2011

Oct.

6 S3 3,300 3,300

9 G2 850 2,45015 CR

32,450 0

Vickie ForesmanDate Explanation PR Debit Credit Balanc

e2011Oct.

12

S3 3,650 3,650

16

S3 7,700 11,350

22

CR3

3,650 7,700

Bill GrigsbyDate Explanation PR Debit Credit Balanc

e2011Sept

23

S2 4,200 4,200

Oct.

2 CR3

4,200 0

24

S3 1,200 1,200

Amy IhrigDate Explanation PR Debit Credit Balanc

e2011Oct.

15

S3 3,100 3,100

20

G2 500 2,600

25

CR3

2,600 0


Part 2ACCOUNTS PAYABLE SUBLEDGER

Fireside CompanyDate Explanation PR Debit Credit Balan

ce2011Sept

28

P1 4,260 4,260

Oct.

4 G2 460 3,800

6 CD4

3, 800 0


Problem 8-5A (continued) Part 2Brown Supply Company


2011Oct.

5 P2 1,300 1,300

17 P2 615 1,91518 G2 40 1,87521 P2 6,700 8,575

Sunshine CompanyDate Explanation PR Debit Credit Bala

nce2011

Oct.

15

P2 2,650 2,650

23

CD4

2,650 0

26

P2 8,100 8,100

Shore CompanyDate Explanation PR Debit Credit Bala

nce2011

Oct.

2 P2 3,200 3,200

12

CD4

3,200 0

15

P2 3,990 3,990

17

G2 1,040 2,950

24

CD4

2,950 0

Parts 2, 3GENERAL LEDGER

Cash Acct. No. 101



2011Sept

30

Balance 5,361

Oct.

31

CR3

81,122 86,483

31

CD4

21,848 64,635

Accounts Receivable Acct. No. 106


2011Sept

30

Balance 4,200

Oct.

9 G2 850 3,350

20

G2 500 2,850

31

S3 18,950 21,800

31

CR3

12,900 8,900


Problem 8-5A (continued) Parts 2, 3Merchandise Inventory Acct. No.

119Date Explanation PR Debit Credit Bala

nce2011

Sept

30 Balance 66,970

Oct.

4 G2 460 66,510

9 G2 430 66,940

17 G2 1,040 65,900

31 S3 9,800 56,100

31 P2 19,240 75,340

31 CR3

37,700 37,640

31 CD4

252 37,388



2011Sept

30 Balance 607

Oct.

18 G2 40 567

29 CR3

50 517

31 P2 615 1,132

Store Supplies Acct. No. 125


2011Oct.

30 Balance 346




2011Sept

30 Balance 42,129

Oct.

21 P2 6,700 48,829

Accumulated Amortization, Store Equipment

Acct. No. 166


2011Oct.

30 Balance 9,153


Problem 8-5A (continued) Parts 2, 3Accounts Payable Acct. No.


nce2011

Sept

30 Balance 4,260

Oct.

4 G2 460 3,800

17 G2 1,040 2,76018 G2 40 2,72031 P2 26,555 29,27

531 CD

412,600 16,67

5

Ken Shaw, Capital Acct. No. 301


2011Oct.

30 Balance 106,200

Ken Shaw, Withdrawals Acct. No. 302


2011Oct.

30 CD4

2,500 2,500

Sales Acct. No. 413


2011Oct.

31 S3 18,950 18,950

31 CR3

68,430 87,380

Sales Returns and Allowances Acct. No. 414



2011Oct.

9 G2 850 850

20 G2 500 1,350

Sales Discounts Acct. No. 415


2011Oct.

31 CR3

258 258


Problem 8-5A (continued) Parts 2, 3Cost of Goods Sold Acct. No.


nce2011

Oct. 9 G2 430 (430) 31 S3 9,800 9,370 31 CR3 37,700 47,07

0



2011Oct.

15 CD4

2,020 2,020

31 CD4

2,020 4,040

Rent Expense Acct. No. 640


2011Oct.

2 CD4

2,250 2,250

Utilities Expense Acct. No. 690


2011Oct.

31 CD4

710 710


Problem 8-5A (concluded) Part 4

SASKAN ENTERPRISESTrial Balance

October 31, 2011

Account Debit CreditCash................................................. $

64,635

Accounts receivable........................... 8,900Merchandise inventory....................... 37,38

8Office supplies................................... 1,132Store supplies................................... 346Store equipment................................ 48,82

9Accumulated amortization, store equipment...................................... $

9,153Accounts payable.............................. 16,67

5Ken Shaw, capital.............................. 106,2

00Ken Shaw, withdrawals...................... 2,500Sales................................................ 87,38

0Sales returns and allowances............. 1,350Sales discounts................................. 258Cost of goods sold............................. 47,07

0Sales salaries expense....................... 4,040Rent expense.................................... 2,250Utilities expense................................

710

Totals............................................... $219,

408 $219,

408

SASKAN ENTERPRISESSchedule of Accounts Receivable

October 31, 2011

Vickie Foresman.................... $7,700


Bill Grigsby........................... 1,200 Total accounts receivable...... $8,900

SASKAN ENTERPRISESSchedule of Accounts Payable

October 31, 2011

Brown Supply Company......... $ 8,575

Sunshine Company................ 8,10 0

Total accounts payable.......... $16,675


Problem 8-6A (30 minutes)


Date Account Debited

Invoice No.

PR

A/R Dr.Sales

Cr.PR


2011Jan. 7 G. Little 103 500 160

19 B. Moore 104 375 13024 C. Woudstra 105 375 13529 D. Isla 106 800 302



Date of

Invoice

Terms

PR

A/P Cr.

PR

Merchandise

Inventory

Dr.

Office Supplie

s Dr.

Other Account

s Dr.2011Jan. 3 Curtis & Sons Jan.

3 n/30 450 450

20 Norton Industries

Jan. 20

n/30 330 330

NOTE: An additional PR column has been added to facilitate the referencing of inventory entries into the inventory subledger.


cGraw

-Hill Ryerson Lim




Problem 8-6A (concluded)Inventory Subledger Record — FIFO perpetual

Da te

PR Purchases Sales (at cost) Inventory Balance

Units

Unit Cost

Total

CostUnits

Unit Cost

Total Cost

Units

Unit Cost

Total

Cost

Jan. 1

Beginning inventory

25 @$8.00

= $200

25 @ $ 8.00

= $ 200

25 @ $ 8.00

= $ 200

3 P1 50 @$9.00

= $450

50 @ 9.00 = 450

7 S1 20 @ $ 8.00

= $ 160 5 @ $ 8.00

= $ 40

50 @ 9.00 = 450

19 S1 5 @ $ 8.00

= $ 40

10 @ 9.00 = 90 40 @ $ 9.00

= $ 360

40 @ $ 9.00

= $ 360

20 P1 30 @$11.00

= $330

30 @ 11.00

= 330

24 S1 15 @ $ 9.00

= $ 135 25 @ $ 9.00

= $ 225

30 @ 11.0 = 33


cGraw

-Hill Ryerson Lim



0 029 S1 25 @ $

9.00= $ 225

7 @ 11.00

= 77 23 @ $11.00

= $ 253

Total

105 $980

82 $727 23 $253

Cost of goods available for sale =

Cost of goods sold +

Ending inventory

Note: An additional PR column has been added to the Inventory Subledger Record to facilitate referencing of inventory entries.

*Problem 8-7A (40 minutes)

Note: Since posting to the General Ledger was not a requirement in this problem, posting references are shown for values posted to the subledgers only.


eA/R Dr.


PR Sales Cr.

2011Apr.

3 Linda Hobart 760 3,000

5 Paul Abrams 761 8,00011 Kelly Schaefer 762 9,50013 Linda Hobart 763 4,100



Apr.

13

Linda Hobart

Sale of Apr. 3 2,940 60 3,000

14

Paul Abrams

Sale of Apr. 5 7,840 160 8,000

16

Sales Cash sales 50,840

50,840


Accounts

Office Other

Date Payable Purchas Suppli Accoun


cGraw

-Hill Ryerson Lim




of es es tsDate Account Credited Invoi

ceTerms PR Credit Debit Debit Debit

2011Apr.

2 Baskin Company Apr. 2

2/10,n/60

13,300 13,300

3 Eau Claire Inc. Apr. 2

n/10 EOM

1,380 1,380


Apr. 9

n/10 EOM

11,125 11,125

*Problem 8-7A (continued)CASH DISBURSEMENTS JOURNAL Page 3

Purchase

Other Accts.

Ch. Cash Discount

Accts. Payable

Date No. Payee Account Debited PR Credit Credit Debit Debit2011

Apr.

4 587 The Record Advertising Expense

999 999

12

588 Baskin Company

Baskin Company 13,034

266 13,300

16

589 Payroll Sales Salaries Expense

9,750 9,750


cGraw

-Hill Ryerson Lim



*Problem 8-7A (continued)

GENERAL JOURNAL Page 3Date Account Titles and Explanations PR Debit Credit2011Apr. 6 Accounts Payable – Eau Claire Inc. 85

Office Supplies.................... 85 Returned office supplies.

ACCOUNTS RECEIVABLE SUBLEDGERPaul Abrams


2011Apr.

5 S3 8,000 8,000

14

CR3 8,000 0


ce2011

Apr.

3 S3 3,000 3,000

13

CR3 3,000 0

13

S3 4,100 4,100


ce2011

Apr.

11

S3 9,500 9,500


*Problem 8-7A (concluded) Parts 2, 3ACCOUNTS PAYABLE SUBLEDGER


e2011

Apr.

9 P3 11,125 11,125


e2011

Apr.

2 P3 13,300 13,300

12

CD3

13,300 0


e2011


e2011

Apr.

3 P3 1,380 1,380

6 G3 85 1,295


*Problem 8-8A (70 minutes)


eA/R Dr.


PR Sales Cr.

2011Apr.

3 Linda Hobart 760 3,000

5 Paul Abrams 761 8,00011 Kelly Schaefer 762 9,50013 Linda Hobart 763 4,10027 Paul Abrams 764 3,07027 Kelly Schaefer 765 5,70

030 Totals 33,37

0(106/413)



Apr.

13

Linda Hobart Sale of Apr. 3 2,940 60 3,000

14

Paul Abrams Sale of Apr. 5 7,840 160 8,000

16


50,840

18

L.T. Notes Payable

Note to bank 251

50,000

50,000

2 Kelly Sale of Apr. 9,310 190 9,500


cGraw

-Hill Ryerson Lim




0 Schaefer 1123

Linda Hobart Sale of Apr. 13

4,018 82 4,100

30

Sales Cash sales 70,9 75

70,9 75

30

Totals 195,923

492 24,600

121,815

50,000

(101) (415) (106) (413) (X)



Accounts

Office Other

Date of

Payable Purchases

Supplies

Accounts



2011Apr.


2/10,n/60

13,300 13,300

3 Eau Claire Inc. Apr. 2

n/10 EOM

1,380 1,380


Apr. 9

n/10 EOM

165/

11,125 11,125

17 Sprocket Company Apr. 16

2/10,n30

12,750 12,750

20 Store Supplies/Frank’s Supply

Apr. 19

n/10 EOM

125/

730 730


2/10,n/60

10,375 10,375

30 Totals 49,660 36,425 1,380

11,855

(201) (505) (124) (X)


seOther Accts.

Ch. Cash Discount

Accts. Payable


Apr 4 587 The Record Advertising 655 999 999


cGraw

-Hill Ryerson Lim



. Expense12

588 Baskin Company

Baskin Company 13,034

266 13,300

16


621 9,750 9,750

26

590 Sprocket Company

Sprocket Company

12,103

247 12,350*

30


621 9,75 0

9,75 0

30

Totals 45,636

513 20,499

25,650

(101) (506) (X) (201)*$12,750 - $400 credit memorandum = $12,350.



Credit2011Apr. 6 Accounts Payable—Eau Claire Inc. 201/ 85

Office Supplies....................... 124 85Returned office supplies.

23 Accounts Payable—Sprocket Company 201/400

Purchase Returns and Allowances 507400

Returned merchandise.


Cash Acct. No. 101Date Explanation PR Debit Credit Balanc

e2011

Mar.

31


Apr.

30

CR3 195,923

362,923

30

CD3

45,636 317,287

Accounts Receivable Acct. No. 106Date Explanation PR Debit Credit Balanc

e2011

Apr.

30

S3 33,370

33,370

30

CR3 24,600 8,770

Merchandise Inventory Acct. No. 119Date Explanation PR Debit Credit Balanc

e2011

Mar.

31





Balance

2011Apr. 3 P3 1,380 1,380

6 G3 85 1,295


*Problem 8-8A (continued)Store Supplies Acct. No.

125Date Explanation PR Debit Credi

tBalance

2011Apr. 2

0P3 730 730



Balance

2011Apr. 9 P3 11,12

511,125



Balance

2011Apr. 6 G3 85 (85)

23

G3 400 (485)

30

P3 49,660

49,175

30

CD3

25,650

23,525

Long-Term Notes Payable Acct. No. 251Date Explanation PR Debit Credit Balanc

e2011

Mar.

31


Apr.

18

CR3 50,000 217,000

Jeff Newton, Capital Acct. No. 301Date Explanation PR Debit Credit Balanc

e2011

Mar.

31

Balance forward 95,000



e2011

Apr.

30

S3 33,370 33,370

30

CR3 121,815

155,185


e2011

Apr.

30

CR3 492 492


*Problem 8-8A (continued)Purchases Acct. No. 505


2011Apr.

30

P3 36,425

36,425

Purchase Discounts Acct. No. 506Date Explanation PR Debit Credit Balanc

e2011

Apr.

30

CD3

513 513

Purchase Returns and Allowances Acct. No. 507Date Explanation PR Debit Credit Balanc

e2011

Apr.

30

G3 400 400



Balance

2011Apr. 1

6CD3

9,750 9,750

30

CD3

9,750 19,500



Balance

2011Apr. 4 CD

3999 999


*Problem 8-8A (continued)ACCOUNTS RECEIVABLE SUBLEDGER

Paul AbramsDate Explanation PR Debit Credit Balan

ce2011

Apr.

5 S3 8,000 8,000

14

CR3 8,000 0

27

S3 3,070 3,070


ce2011

Apr.

3 S3 3,000 3,000

13

CR3 3,000 0

13

S3 4,100 4,100

23

CR3 4,100 0


ce2011

Apr.

11

S3 9,500 9,500

20

CR3 9,500 0

27

S3 5,700 5,700


*Problem 8-8A (continued)ACCOUNTS PAYABLE SUBLEDGER


e2011

Apr.

9 P3 11,125 11,125

20

P3 730 11,855


e2011

Apr.

2 P3 13,300 13,300

12

CD3

13,300 0

25

P3 10,375 10,375


e2011

Apr.

17

P3 12,750 12,750

23

G3 400 12,350

26

CD3

12,350 0


e2011

Apr.

3 P3 1,380 1,380

G3 85 1,295


*Problem 8-8A (concluded) Part 5

NEWTON COMPANYSchedule of Accounts Receivable

April 30, 2011

Paul Abrams ..................................... $3,070Kelly Schaefer................................... 5,700Total accounts receivable ................. $8,770

NEWTON COMPANYSchedule of Accounts Payable

April 30, 2011Frank’s Supply .................................$11,855Baskin Company ............................... 10,375Eau Claire Inc. .................................. 1,295Total accounts payable .....................$23,525

NEWTON COMPANYTrial BalanceApril 30, 2011

Account Debit CreditCash ............................................$317,287Accounts receivable...................... 8,770Merchandise inventory.................. 95,000Office supplies ............................. 1,295Store supplies ............................. 730Store equipment .......................... 11,125Accounts payable ......................... $ 23,525Long-term notes payable ............. 217,000Jeff Newton, capital...................... 95,000Sales............................................ 155,185Sales discounts............................ 492Purchases.................................... 36,425Purchase discounts....................... 513Purchase returns and allowances. . 400Sales salaries expense ................. 19,500Advertising expense .................... 999 Totals ..........................................$491,623$491,623


*Problem 8-9A - Perpetual (100 minutes) Part 4

SALES JOURNAL Page 2Accts. PST GST COGS

Invoice

Rec. Payable

Payable

Sales Dr./

Date

Account Debited Number

PR Debit Credit Credit Credit MI Cr.

2011Mar.

2 Leroy Hackett 854 18,328.00

1,580.00

948.00

15,800.00

1,027

3 Sam Snickers 855 10,672.00

920.00 552.00

9,200.00

5,980

10

Marjorie Coble 856 5,336.00

460.00 276.00

4,600.00

2,990

27


1,391.00

834.60

13,910.00

9,040

28

Sam Snickers 858 6,165 .40

531.50

318. 90

5,315.

00

3,455

31

Totals 56,637.00

4,882.50

2,929.50

48,825.00

22,492

(106) (224) (225) (413) (502/119)

CASH RECEIPTS JOURNAL Page 2 Sales Accts. Other PST GST COGS

Cash Discount

Rec. Sales Accts. Payable

Payable

Dr./

Date

Account Credited

Explanation

PR

Debit Debit Credit Credit Credit Credit Credit MI Cr.


cGraw

-Hill Ryerson Lim




2011Mar 6

L.T. Notes Pay.

Note to bank

251

72,000.00

72,000.00

12 Leroy Hackett

Invoice, Mar 2

18,012.00

316.00

18,328.00

13 Sam Snickers

Invoice, Mar 3

10,488.00

184.00

10,672.00

15 Sales Cash sales 191,028.80

164,680.00

16,468.00

9,880.80

107,042

20 Marjorie Coble

Invoice, Mar 10

5,244.00

92.00 5,336.00


174,590.00

17,459.00

10,475.40

113,480

31 Totals 499,297.20

592.00

34,336 .00

339,270.00

72,000.00

33,927.00

20,356.20

220,522

(101) (415)

(106)

(413)

() (224)

(225)

(502/119)

*Problem 8-9A - Perpetual (continued)

PURCHASES JOURNAL Page 2Accts. Merch. Other GST

Date of

Payable

Inventory

Accounts

Rec’ble

Date

Account Credited Invoice


2011Mar.

3 Office Supplies/Arndt Company

Mar 3

n/10 EOM

124/

1,187.20

1,120.00

67.20

5 Defore Industries Mar 3

2/10, n/30

45,156.00

42,600.00

2,556.00

9 Office Equip./Jett Supply

Mar 9

n/10 EOM

163/

22,101.00

20,850.00

1,251.00

14

The Welch Company Mar 13

2/10, n/30

33,522.50

31,625.00

1,897.50

16

Store Supplies/Arndt Company

Mar 16

n/10 EOM

125/

1,77 0.20

1,670 . 00

100 . 20

31

Totals 103,73 6 .90

74,225 . 00

23,640 . 00

5,871 . 90

(201) (119) (X) (108)

CASH DISBURSEMENTS JOURNAL Page 2 Merch. Other GST Accts.

Ch.

Cash Inv. Accts. Rec’ble

Payable

Date No.

Payee Account Debited PR Credit Credit Debit Debit Debit

2011Mar. 41 Defore Defore 44,304. 852.00 45,156


cGraw

-Hill Ryerson Lim



13 6 Industries1 Industries 00 .0015 41

7Payroll Sales Salaries

Expense621 15,900.

0015,900

.0023 41

8The Welch Co. 2

The Welch Company

30,368.00

584.00 30,952.00

31 419


621 15,900 .00

15,900.00

31 Totals 106,472.00

1,436.00 31,800.00

76,108.00

(101) (119) (X) (201)

1. 42,600 x 2% = 852 discount2. 31,625 – 2,425 = 29,200; 29,200 x 2% = 584 discount

*Problem 8-9A - Perpetual (continued)GENERAL JOURNAL Page 2

Date Account Title and Explanations PR DebitCredit

2011Mar.

17

Accounts Payable—The Welch Company ..............................

201/

2,570.50

GST Payable..................... 225 145.50 Merchandise Inventory...... 119 2,425.

00 Returned merchandise.

19

Accounts Payable—Jett Supply 201/

667.80

GST Payable..................... 225 37.80 Office Equipment.............. 163 630.00 Returned office equipment.

Parts 2 and 4ACCOUNTS RECEIVABLE SUBLEDGER

Marjorie CobleDate Explanation PR Debit Credit Balanc

e2011

Mar.

10

S2 5,336.00

5,336.00

20

CR2

5,336.00

0.00

27

S2 16,135.60

16,135.60

Leroy HackettDate Explanation PR Debit Credit Balanc

e2011

Mar.

2 S2 18,328.00

18,328.00

12

CR2

18,328.00

0.00

Sam Snickers



2011 Mar.

3 S2 10,672.00

10,672.00

13

CR2

10,672.00

0.00

28

S2 6,165.40

6,165.40

Parts 3 and 4ACCOUNTS PAYABLE SUBLEDGER

Arndt CompanyDate Explanation PR Debit Credit Balanc

e2011

Mar.

3 P2 1,187.20

1,187.20

16 P2 1,770.20

2,957.40

*Problem 8-9A - Perpetual (continued)Defore Industries


2011 Mar.

5 P2 45,156.00

45,156.00

13 CD3

45,156.00

0.00

Jett SupplyDate Explanation PR Debit Credit Balanc

e2011

Mar.

9 P2 22,101.00

22,101.00

19 G2 667.80 21,433.20

The Welch Company



2011 Mar.

14 P2 33,522.50

33,522.50

17 G2 2,570.50

30,952.00

23 CD3

30,952.00

0.00

Parts 1 and 4GENERAL LEDGER

Cash Acct. No. 101


2011 Mar.

31 CR2

499,297.20

499,297.20

31 CD3

106,472.00

392,825.20



2011Mar.

31 S2 56,637.00

56,637.00

31 CR2

34,336.00

22,301.00

GST Receivable Acct. No. 108


2011Mar.

31 P2 5,871.90

5,871.90


*Problem 8-9A - Perpetual (continued)Merchandise Inventory Acct. No.

119Date Explanation PR Debit Credit Balanc

e2011

Mar.

1 Beginning balance 250,000.00

17 G2 2,425.00

247,575.00

31 S2 22,492.00

225,083.00

31 CR2

220,522.00

4,561.00

31 P2 74,225.00

78,786.00

31 CD3

1,436.00

77,350.00



2011 Mar.

31

P2 1,120.00

1,120.00



2011 Mar.

16 P2 1,670.00

1,670.00

Office Equipment Acct. No. 163


2011Mar.

9 P2 20,850.00

20,850.00

19 G2 630.00 20,220.


00


*Problem 8-9A - Perpetual (continued)Accounts Payable Acct. No.


e2011

Mar.

17 G2 2,570.50

(2,570.50)

19 G2 667.80 (3,238.30)

31 P2 103,736.90

100,498.60

31 CD3

76,108.00

24,390.60

PST Payable Acct. No. 224


2011Mar.

31 S2 4,882.50

4,882.50

31 CR2 33,927.00

38,809.50

GST Payable Acct. No. 225


2011Mar.

17 G2 145.50 145.50

19 G2 37.80 183.3031 S2 2,929.5

03,112.8

031 CR2 20,356.

2023,469.

00

Long-Term Notes Payable Acct. No. 251


2011Mar.

6 CR2 72,000.00

72,000.00


George Bledsoe, Capital Acct. No. 301


2011Mar.


Sales Acct. No. 413


2011Mar.

31 S2 48,825.00

48,825.00

31 CR2 339,270.00

388,095.00



2011Mar.

31 CR2 592.00 592.00

*Problem 8-9A - Perpetual (continued)Cost of Goods Sold Acct. No.


e 2011

Mar.

31 S2 22,492.00

22,492.00

31 CR2 220,522.00

243,014.00



2011Mar.

15 CD3

15,900.00

15,900.00

31 CD 15,900. 31,800.


3 00 00

Part 5THE BLEDSOE COMPANY

Trial BalanceMarch 31, 2011

Account Debit CreditCash ............................. $392,825.20Accounts receivable ...... 22,301.00GST receivable............... 5,871.90Merchandise inventory... 77,350.00Office supplies............... 1,120.00Store supplies ............... 1,670.00Office equipment ........... 20,220.00 Accounts payable .......... $ 24,390.60PST payable .................. 38,809.50GST payable ................. 23,469.00Long-term notes payable 72,000.00George Bledsoe, capital . 250,000.00Sales ............................ 388,095.00Sales discounts ............. 592.00Cost of goods sold ........ 243,014.00Sales salaries expense.. . 31,800.00 Totals............................$796,764 .10 $796,764.10


*Problem 8-9A - Perpetual (concluded)

THE BLEDSOE COMPANYSchedule of Accounts Receivable

March 31, 2011

Marjorie Coble ............. $16,135.60Sam Snickers................ 6,165 .40 Total accounts receivable $22,301.00

THE BLEDSOE COMPANYSchedule of Accounts Payable

March 31, 2011

Arndt Company ............ $ 2,957.40Jett Supply................... 21,433 .20 Total accounts payable . $24,390 .60


*Problem 8-9A - Periodic (100 minutes) Part 4

SALES JOURNAL Page 2Accts. PST GST

Invoice

Rec. Payable

Payable

Sales

Date

Account Debited Number

PR Debit Credit Credit Credit

2011Mar.

2 Leroy Hackett 854 18,328.00

1,580.00

948.00 15,800.00

3 Sam Snickers 855 10,672.00

920.00 552.00 9,200.00

10


460.00 276.00 4,600.00

27


1,391.00

834.60 13,910.00

28

Sam Snickers 858 6,165 .40

531.50

318. 90

5,315.

0031

Totals 56,637.00

4,882.50

2,929.50

48,825.00

(106) (224) (225) (413)

CASH RECEIPTS JOURNAL Page 2 Sales Accts. Other PST GST

Cash Discount

Rec. Sales Accts. Payable Payable

Date

Account Credited

Explanation

PR Debit Debit Credit Credit Credit Credit Credit

201


cGraw

-Hill Ryerson Lim




1Mar

. 6L.T. Notes Pay.

Note to bank

251

72,000.00

72,000.00

12 Leroy Hackett

Invoice, Mar 2

18,012.00

316.00 18,328.00

13 Sam Snickers

Invoice, Mar 3

10,488.00

184.00 10,672.00


164,680.00

16,468.00

9,880.80

20 Marjorie Coble

Invoice, Mar 10

5,244.00

92.00 5,336.00


174,590.00

17,459.00

10,475.40

31 Totals 499,297.20

592.00 34,336 . 00

339,270.00

72,000.00

33,927.00

20,356.20

(101) (415)

(106)

(413) () (224) (225)

*Problem 8-9A - Periodic (continued)

PURCHASES JOURNAL Page 2Accts. Other GST

Date of

Payable

Purchases

Accounts

Rec’ble

Date

Account Invoice


2011Mar.

3 Office Supplies/Arndt Company

Mar 3

n/10 EOM

124/

1,187.20

1,120.00

67.20

5 Defore Industries Mar 3

2/10, n/30

45,156.00

42,600.00

2,556.00

9 Office Equip./Jett Supply

Mar 9

n/10 EOM

163/

22,101.00

20,850.00

1,251.00

14

The Welch Company Mar 13

2/10, n/30

33,522.50

31,625.00

1,897.50

16

Store Supplies/Arndt Company

Mar 16

n/10 EOM

125/

1,77 0.20

1,670 . 00

100 . 20

31

Totals 103,73 6 .90

74,225 . 00

23,640 . 00

5,871 . 90

(201) (505) (X) (108) CASH DISBURSEMENTS JOURNAL Page 3

Pur. Other GST Accts.Ch.

Cash Disc. Accts. Rec’ble

Payable

Date No.


PR Credit Credit Debit Debit Debit

2011Mar.

13416

Defore Industries

Defore Industries

44,304.00

852.00 45,156.00


cGraw

-Hill Ryerson Lim



15 417


621

15,900.00

15,900.00

23 418

The Welch Co.

The Welch Company

30,368.00

584.00 30,952.00

31 419


621

15,900 .00

15,900.00

31 Totals 106,472.00

1,436.00

31,800.00

76,108.00

(101) (507) (X) (201)

*Problem 8-9A - Periodic (continued)GENERAL JOURNAL Page 2

Date Account Title and Explanations PR DebitCredit

2011Mar.

17

Accounts Payable—The Welch Company ..............................

201/

2,570.50

GST Payable..................... 225 145.50 Purchases Returns and Allowances............................

506 2,425.00


19

Accounts Payable—Jett Supply 201/

667.80

GST Payable..................... 225 37.80 Office Equipment.............. 163 630.00 Returned office equipment.

Parts 2 and 4ACCOUNTS RECEIVABLE SUBLEDGER

Marjorie CobleDate Explanation PR Debit Credit Balanc

e2011

Mar.

10

S2 5,336.00

5,336.00

20

CR2

5,336.00

0.00

27

S2 16,135.60

16,135.60

Leroy HackettDate Explanation PR Debit Credit Balanc

e2011

Mar.

2 S2 18,328.00

18,328.00

12

CR2

18,328.00

0.00

Sam Snickers



2011 Mar.

3 S2 10,672.00

10,672.00

13

CR2

10,672.00

0.00

28

S2 6,165.40

6,165.40


*Problem 8-9A - Periodic (continued)Parts 3 and 4

ACCOUNTS PAYABLE SUBLEDGER

Arndt CompanyDate Explanation PR Debit Credit Balanc

e2011

Mar.

3 P2 1,187.20

1,187.20

16 P2 1,770.20

2,957.40

Defore IndustriesDate Explanation PR Debit Credit Balanc

e2011

Mar.

5 P2 45,156.00

45,156.00

13 CD3

45,156.00

0.00


e2011

Mar.

9 P2 22,101.00

22,101.00

19 G2 667.80 21,433.20

The Welch CompanyDate Explanation PR Debit Credit Balanc

e2011

Mar.

14 P2 33,522.50

33,522.50

17 G2 2,570.50

30,952.00

23 CD 30,952. 0.00


3 00


*Problem 8-9A - Periodic (continued)Parts 1 and 4

GENERAL LEDGERCash Acct. No.


e2011

Mar.

31 CR2

499,297.20

499,297.20

31 CD3

106,472.00

392,825.20



2011Mar.

31 S2 56,637.00

56,637.00

31 CR2

34,336.00

22,301.00



2011Mar.

31 P2 5,871.90

5,871.90

Merchandise Inventory Acct. No. 119


2011Mar.




2011


Mar.

31

P2 1,120.00

1,120.00



2011 Mar.

16 P2 1,670.00

1,670.00


*Problem 8-9A - Periodic (continued)Office Equipment Acct. No.


e2011

Mar.

9 P2 20,850.00

20,850.00

19 G2 630.00 20,220.00



2011Mar.

17 G2 2,570.50

(2,570.50)

19 G2 667.80 (3,238.30)

31 P2 103,736.90

100,498.60

31 CD3

76,108.00

24,390.60



2011Mar.

31 S2 4,882.50

4,882.50

31 CR2 33,927.00

38,809.50



2011Mar.

17 G2 145.50 145.50

19 G2 37.80 183.3031 S2 2,929.5

03,112.8

0


31 CR2 20,356.20

23,469.00



2011Mar.

6 CR2 72,000.00

72,000.00

George Bledsoe, Capital Acct. No. 301


2011Mar.


Sales Acct. No. 413


2011Mar.

31 S2 48,825.00

48,825.00

31 CR2 339,270.00

388,095.00

*Problem 8-9A - Periodic (continued)Sales Discounts Acct. No.


e2011

Mar.

31 CR2 592.00 592.00

Purchases Acct. No. 505


2011Mar.

31 P2 74,225.00

74,225.00


Purchases Returns and Allowances Acct. No. 506


2011Mar.

17 G2 2,425.00

2,425.00

Purchases Discounts Acct. No. 507


2011Mar.

31 CD2

1,436.00

1,436.00



2011Mar.

15 CD2

15,900.00

15,900.00

31 CD2

15,900.00

31,800.00


*Problem 8-9A - Periodic (concluded)Part 5

THE BLEDSOE COMPANYTrial Balance

March 31, 2011

Account Debit CreditCash ............................. $392,825.20Accounts receivable ...... 22,301.00GST receivable .............. 5,871.90Merchandise inventory . . 250,000.00Office supplies............... 1,120.00Store supplies ............... 1,670.00Office equipment ........... 20,220.00 Accounts payable .......... $ 24,390.60PST payable .................. 38,809.50GST payable ................. 23,469.00Long-term notes payable 72,000.00George Bledsoe, capital . 250,000.00Sales ............................ 388,095.00Sales discounts ............. 592.00Purchases ..................... 74,225.00Purchases returns and allowances2,425.00Purchases discounts...... 1,436.00Sales salaries expense.. . 31,800.00 Totals............................$800,625 .10 $800,625.10

THE BLEDSOE COMPANYSchedule of Accounts Receivable

March 31, 2011

Marjorie Coble ............. $16,135.60Sam Snickers................ 6,165 .40 Total accounts receivable $22,301.00

THE BLEDSOE COMPANYSchedule of Accounts Payable

March 31, 2011

Arndt Company ............ $ 2,957.40


Jett Supply................... 21,433 .20 Total accounts payable . $24,390 .60


*Problem 8-10A (30 minutes)Sales Journal Page X


Invoice No. PR A/R Dr.

PST Payable

Cr.

GST Payable

Cr.Sales

Cr


2011Oct 12

K-Company 106 6,840 480 360 6,000 4,200

17 CanCor 107 7,980 560 420 7,000 4,60030 Delton

Hardware108 4,560 320 240 4,000 2,900

Cash Receipts Journal Page X

Date

Account Credited

Explanation PR

Cash

Dr.

Sales

DiscDr

A/R Cr.

Sales Cr.

Other Accounts Cr.

PST Payable Cr.

GST Payable Cr.

COGS/Dr. Merchan

diseInventory

/ Cr.201

1Oct

9Sales Inv #105 1,36

81,200 96 72 740

24 CanCor 7,910

70 7,980

26 K-Company 6,840

6,840



Terms PR A/P Cr.Merchan

diseInventor

y Dr.

Other Accounts

Dr.

GST Rec’ble

Dr.

2011


cGraw

-Hill Ryerson Lim




Oct 1 Lexor Suppliers 2/10,n/30

4,240 4,000 240

27 Milton Suppliers n/30 8,480 8,000 480

Cash Disbursements Journal

Page X

Date Ch #

Account Debited PR Cash Cr.Merchandi

seInventory

Cr.

Other Accounts

Dr.

GST Rec’ble

Dr.A/P Dr.

2011Oct 5 13 Merchandise

inventory2,120 2,000 120

10 14 Lexor Suppliers 4,160 80 4,240

*Problem 8-11A (30 minutes)SALES JOURNAL Page X


Date


2011

Oct. 12 K-Company 106 6,840 480 360 6,00017 CanCor 107 7,980 560 420 7,00030 Delton Hardware 108 4,560 320 240 4,000

CASH RECEIPTS JOURNAL Page X

Other Accts. PST GST SalesAccts. Rec. Payable Payable Sales Cash Discoun

tDate Account

CreditedExplanatio

nPR Credit Credit Credit Credit Credit Debit Debit

2011Oct.

9Sales Inv #105 96 72 1,200 1,368

24 CanCor 7,980 7,910 7026 K-Company 6,840 6,840

PURCHASES JOURNAL Page XAccts. Other GST

Date of

Payable Purchases

Accounts Rec’ble



2011


cGraw

-Hill Ryerson Lim



Oct. 1 Lexor Suppliers Oct. 1

2/10,n/30

4,240 4,000 240

27 Milton Suppliers Oct. 27

n/30 8,480 8,000 480

CASH DISBURSEMENTS JOURNAL Page XPur. Other GST Accts.

Ch.

Cash Disc. Accts. Rec’ble

Payable

Date No.



2011Oct.

513 Cash purchase Purchases 2,120 2,000 120

10 14 Lexor Suppliers Lexor Suppliers

4,160 80 4,240

ALTERNATE PROBLEMSProblem 8-1B (20 minutes)

Date TransactionSpeci

al Journ

al

Subledger

May 1

The owner invested an automobile into the business.

G NE

2 Sold merchandise and received cash. CR MI3 Purchased merchandise inventory on

credit, 1/5, n/30.P AP/MI

4 Sold merchandise on credit; terms 2/15, n30.

S AR/MI

5 The customer of May 4 returned defective merchandise; the merchandise was scrapped.

G AR

6 Regarding the May 3 purchase, received a credit memorandum from the supplier granting an allowance.

G AP/MI

15 Paid mid-month salaries. CD NE17 Purchased office supplies on credit;

terms n/30.P AP

19 Paid for the balance owing regarding the May 3 purchase.

CD AP

22 Received payment regarding the May 4 sale.

CR AR

25 Borrowed money from bank. CR NE29 Purchased merchandise inventory

paying cash.CD MI

30 Accrued interest revenue. G NE30 Closed all revenue accounts to the

income summary.G NE


Problem 8-2B (40 minutes)

Sales Journal Page: S1

Date Account DebitedInvoice No. PR

A/R Dr.Sales Cr.


2011June 5 Martha Stohart 347 102,000 51,000

6 Carol Larson 348 8,200 5,70018 Lars Wilson 349 6,000 4,90025 Nathan Blythe 350 28,000 14,500

Cash Receipts Journal Page: CR1


PR

Explanation

Cash Dr.

Sales

DiscDr A/R Cr. Sales Cr.

Other Accounts Cr.

COGS/Dr.

Merchandise

Inventory/ Cr.

2011June

12A/R – Carol Larson

Inv. 348 8,036 164 8,200

24 A/R – Martha Stohart

Inv. 347 102,000

102,000

27 A/R – Lars Wilson

Inv. 349 5,880 120 6,000

Purchases Journal Page: P1


Date of Invoice Terms P

RA/P Cr.

Merchandise Inventory

Dr.

Office Supplies

Dr.

Other Accounts

Dr.


cGraw

-Hill Ryerson Lim



2011June 1 Exeter

Equip./Equipment

June 1 n30 45,000 45,000

4 Whitby Co. June 4 1/5, n15

85,000 85,000

8 Suppliers Unlimited

June 8 2/10, n30

1,800 1,800

Problem 8-2B (concluded)Cash Disbursements Page:

CD1

Date Ch #

Account Debited PR Cash Cr.Merchan

diseInventory

Cr.

Other Accounts

Dr.A/P Dr.

2011June 11 10

1Whitby Co.* 80,200 80,200

14 102

Salaries Expense 15,000 15,000

28 103

Exeter Equipment 45,000 45,000

29 104

Salaries Expense 15,000 15,000

*85,000 – 4,800 = 80,200

General Journal Page: G1Date Account Titles and

ExplanationsPR Debit Credit

2011Jun

e7 Accounts Payable – Whitby Co....... 4,800

Merchandise Inventory........... 4,800 To record allowance received for damages that occurred during delivery.

26

Sales Returns and Allowances....... 2,800

Accounts Receivable – Nathan 2,800


cGraw

-Hill Ryerson Lim




Blythe.......................................... To record unsatisfactory goods returned by customer.

26

Merchandise Inventory.................. 2,200

Cost of Goods Sold................. 2,200 Goods returned to inventory.

Problem 8-3B (40 minutes)Note: Since posting to the General Ledger was not a requirement in this problem, posting references are shown for values posted to the subledgers only.

Part 3SALES JOURNAL Page 3


Invoice Number

PRA/R Dr. Sales.

Cr.


Inventory Cr.

2011July

5 Karen Harden 918 18,400 10,200

6 Paul Kane 919 7,500 4,10013

Kelly Grody 920 8,350 4,600

14

Karen Harden 921 4,100 2,300


DateAccount Credited Explanati

on

PR

Cash Debit

Sales Discount

Debit

Accts.

Rec. Credit

Sales Credit

Other

Accts.

Credit



2011July

15

Karen Harden

Sale of Jul 5

18,032 368 18,400

15

Sales Cash sales

121,370

121,370

66,700


cGraw

-Hill Ryerson Lim






Accounts

Payable

Credit

Merchandise

Inventory Debit

Office Suppli

es Debit

Other

Accts.

Debit2011

July 1 Beech Company Jun 30

2/10, n/60

6,300 6,300

7 Blackwater Inc. /Store Supp.

Jul 7 n/10 EOM

1,050 1,050

9 Poppe’s Supply /Store Equip.

Jul 8 n/10 EOM

37,710 37,710

Problem 8-3B (continued)CASH DISBURSEMENTS JOURNAL Page

3

Date

Ch. No. Payee Account Debited PR

Cash Credit

Merchandise

Inventory Credit

Other Accts. Debit

Accts.

Payable

Debit2011July

3 300

The Weekly Journal

Advertising Expense

575 575

10

301

Beech Company

Beech Company 6,174 126 6,300

15

302

Payroll Sales Salaries Expens

30,620 30,620

GENERAL JOURNAL Page 3Date

Account Titles and Explanations

PR Debit Credit

2011July 8 Accounts Payable—Blackwater

Inc. .....................................201/

150

Store Supplies................ 125 150 Returned supplies to supplier.


cGraw

-Hill Ryerson Lim




Problem 8-3B (continued)Parts 1, 2, 3

ACCOUNTS RECEIVABLE SUBLEDGER

Karen HardenDate Explanation PR Debit Credit Bala

nce2011

July 5 S3 18,400 18,400

14

S3 4,100 22,500

15

CR3

18,400 4,100

Kelly GrodyDate Explanation PR Debit Credit Bala

nce2011

July 13

S3 8,350 8,350

Paul KaneDate Explanation PR Debit Credit Bala

nce2011

July

6 S3 7,500 7,500


Problem 8-3B (concluded)


Beech CompanyDate Explanation PR Debit Credit Balanc

e2011

July 1 P3 6,300 6,30010

CD3

6,300 0

Blackwater Inc.Date Explanation PR Debit Credit Balanc

e2011

July 7 P3 1,050 1,0508 G3 150 900

Poppe’s SupplyDate Explanation PR Debit Credit Balanc

e2011

July 9 P3 37,710 37,710

Sprague CompanyDate Explanation PR Debit Credit Balanc

e2011


Problem 8-4B (70 minutes)Parts 2, 3, 4


Date Account DebitedInvoice Number

PR

A/R Dr. Sales.

Cr.


Inventory Cr.

2011July

5 Karen Harden 918 18,400 10,200

6 Paul Kane 919 7,500 4,10013

Kelly Grody 920 8,350 4,600

14

Karen Harden 921 4,100 2,300

29

Paul Kane 922 28,090 15,500

30

Kelly Grody 923 15,750 8,700

31

Totals 82,190 45,400

(106/413)

(502/119)


DateAccount Credited Explanati

on

PR

Cash Debit

Sales Discount

Debit

Accts.

Rec. Credit

Sales Credit

Other

Accts.

Credit



2011


cGraw

-Hill Ryerson Lim



July

15

Karen Harden

Sale of Jul 5

18,032 368 18,400

15

Sales Cash sales

121,370

121,370

66,700

16

Paul Kane Sale of Jul 6

7,350 150 7,500

21

L.T. Notes Pay

Note to bank

251

20,000 20,000

23

Kelly Grody

Sale of Jul 13

8,183 167 8,350

24

Karen Harden

Sale of Jul 14

4,018 82 4,100

31

Sales Cash sales

79,02 0

79,02 0

43,500

31

Totals 257,973

767 38,350

200,390

20,000

110,200

(101)

(415)

(106)

(413)

(X) (502/119)

Problem 8-4B (continued)PURCHASES JOURNAL Page

3



Accounts

Payable

Credit

Merchandise

Inventory Debit

Office Suppli

es Debit

Other

Accts.

Debit2011July 1 Beech Company Jun

302/10, n/60

6,300 6,300

7 Blackwater Inc. /Store Supp.

Jul 7 n/10 EOM

125/

1,050 1,050

9 Poppe’s Supply /Store Equip.

Jul 8 n/10 EOM

165/

37,710 37,710

17

Sprague Company Jul 17

2/10, n/60

8,200 8,200

20

Poppe’s Supply Jul 19

n/10 EOM

750 750

26

Beech Company Jul 26

2/10, n/30

9,770 9,770

31

Totals 63,780 24,270 750 38,760

(201)

(119)

(124) (X)

CASH DISBURSEMENTS JOURNAL Page 3

Date

Ch. No. Payee Account Debited PR

Cash Credit

Merchandise

Inventory Credit

Other Accts. Debit

Accts.

Payable

Debit201


cGraw

-Hill Ryerson Lim




1July

3 300

The Weekly Journal

Advertising Expense

655

575 575

10

301

Beech Company


15

302

Payroll Sales Salaries Expens e

621

30,620 30,620

27

303

Sprague Company

Sprague Company

5,684 116 5,800*

31

304


621

30,620 30,620

31

Totals 73,673 242 61,815 12,100

(101)

(119) (X) (201)

* $8,200 – $2,400 return = $5,800

Problem 8-4B (continued)GENERAL JOURNAL Page 3

Date


PR Debit Credit


Inc. .....................................201/

150


24

Accounts Payable—Sprague Company.............................

201/

2,400

Merchandise Inventory.... 119 2,400 Returned defective inventory to merchandise supplier.


Cash Acct. No. 101


2011June

30


July 31

CR3

257,973

352,973

31

CD3

73,673 279,300



2011July 3

1S3 82,190 82,190

31

CR3

38,350 43,840




2011Jun. 3

0Balance Forward 167,00

0Jul. 2

4G3 2,400 164,60

031

S3 45,400 119,200

31

CR3

110,200

9,000

31

P3 24,270 33,270

31

CD3

242 33,028



2011July 3

1P3 750 750

Problem 8-4B (continued)Store Supplies Acct. No.


e2011

July 7 P3 1,050 1,0508 G3 150 900



2011July 9 P3 37,710 37,710




2011July

8 G3 150 (150)

24

G3 2,400 (2,550)

31

P3 63,780 61,230

31

CD3

12,100 49,130



2011June

30


July 21

CR3

20,000 187,000

Gene Eldridge, Capital Acct. No. 301


2011Jun. 3


Sales Acct. No. 413


2011July 3

1S3 82,190 82,190

31

CR3

200,390

282,580



2011July 3

1CR3

767 767


Problem 8-4B (continued)Cost of Goods Sold Acct. No.


e2011

July 31

S3 45,400 45,400

31

CR3

110,200

155,600



2011July 1

5CD3

30,620

30,620

31

CD3

30,620

61,240



2011July 3 CD

3575 575



nce2011

July 5 S3 18,400 18,400

14

S3 4,100 22,500

15

CR3

18,400 4,100

24

CR3

4,100 0

Kelly Grody



2011July 1

3S3 8,350 8,350

23

CR3

8,350 0

30

S3 15,750 15,750


nce2011

July

6 S3 7,500 7,500

16

CR3

7,500 0

29

S3 28,090 28,090

Problem 8-4B (continued)ACCOUNTS PAYABLE SUBLEDGER


e2011

July 1 P3 6,300 6,30010

CD3

6,300 0

26

P3 9,770 9,770


e2011

July 7 P3 1,050 1,0508 G3 150 900



e2011

July 9 P3 37,710 37,71020

P3 750 38,460


e2011

July 17

P3 8,200 8,200

24

G3 2,400 5,800

27

CD3

5,800 0


Problem 8-4B (continued)Part 5

ELDRIDGE INDUSTRIESTrial BalanceJuly 31, 2011

Account Debit CreditCash................................................... $279,3

00Accounts receivable............................. 43,840Merchandise inventory........................ 33,028Office supplies..................................... 750Store supplies..................................... 900Store equipment.................................. 37,710Accounts payable................................ $

49,130Long-term notes payable..................... 187,00

0Gene Eldridge, capital.......................... 95,000Sales................................................... 282,58

0Sales discounts................................... 767Cost of goods sold............................... 155,60

0Sales salaries expense......................... 61,240Advertising expense............................ 5

75

Totals................................................. $613,710

$613,710

ELDRIDGE INDUSTRIESSchedule of Accounts Receivable

July 31, 2011

Kelly Grody.......................................... $15,750

Paul Kane............................................ 28,09 0

Total accounts receivable..................... $43,840


ELDRIDGE INDUSTRIESSchedule of Accounts Payable

July 31, 2011

Beech Company................................... $ 9,770

Blackwater Inc. ................................... 900

Poppe’s Supply................................... 38,46 0

Total accounts payable........................ $49,130


Problem 8-4B (concluded)Analysis component:

To find the error(s), re-add the account balances on the schedule of accounts

payable to confirm that the addition was correct. trace the balances listed on the schedule of accounts

payable back to the subsidiary accounts to confirm that they were listed correctly on the schedule.

recalculate the balance of each subsidiary account to confirm that the additions and subtractions were correct.

trace the postings from each subsidiary account and from the controlling account back to the appropriate journals.

Since the purchases and cash disbursements journals were footed and crossfooted before posting, the previous steps should disclose the error.


Problem 8-5B (120 minutes)Parts 1, 2, 3


Date Account DebitedInvoiceNumbe

r

PR

A/R Dr. Sales.

Cr.


Inventory Cr.2011

Oct.

6 Marge Craig 913 3,300 1,800

12 Heather Flatt 914 3,650 2,00015 Amy Izon 915 3,100 1,70016 Heather Flatt 916 4,290 2,46021 Jan Wildman 917 5,52

0 3,000

31 Totals 19,86 0

10,960

(106/413)

(502/119)

CASH RECEIPTS JOURNAL

Page 3

Date

AccountCredited

Explanation PR

Cash Debit

SalesDiscount

Debit

Acct. Rec. Credit

Sales Credit

Other

Acct.

Credit



2011Oct. 2

Jan Wildman

Invoice Nov 23

4,116 84 4,200*

15 Sales Cash sales 38,830 38,830 21,400


cGraw

-Hill Ryerson Lim



15 Marge Craig

Invoice, Dec 6

2,401 49 2,450*

22 Heather Flatt

Invoice, Dec 12

3,577 73 3,650**

25 Amy Izon Invoice, Dec 15

2,842 58 2,900**

28 Store Supplies

Sold supplies

125

58 58

31 Sales Cash sales 66,12 8

66,12 8

36,400

31 Totals 117,952

264 13,200 **

104,958

58 57,800

(101) (415) (106) (413)

(X) (502/119)

* $3,300 – $850 return = $2,450** $3,100 – $200 return = $2,900

Problem 8-5B (continued)


Date Account CreditedDate of Invoice

Terms PRAccoun

ts Payabl

e Credit

Merchandise

Inventory Debit

Office Suppli

es Debit

Other Accts. Debit

2011Oct.

2 Walters Company Oct 2 2/10, n/60

3,200 3,200

5 Green Supply Co. Oct 3 n/10 EOM

1,300 1,300

15

Walters Company Oct 15

2/10, n/60

3,990 3,990

15


2/10, n/60

2,650 2,650

16

Green Supply Co. Oct 16

n/10 EOM

765 765

20

Green Supply Co. /Store Equip.

Oct 19

n/10 EOM

165/

7,475 7,475

28


2/10, n/60

6,030 6,030

31

Totals 25,410 17,170 765 7,475

(201)

(119)

(124) (X)


cGraw

-Hill Ryerson Lim




Problem 8-5B (continued)CASH DISBURSEMENTS JOURNAL Page

4

DateCh. No.

Payee Account Debited PRCash Credi

t

Merchandise

Inventory Credit

Other Accts. Debit

Accts.

Payable

Debit2011Oct.

2 619

Omni Realty Co.

Rent Expense 640

2,250

2,250

6 620

Fireside Company

Fireside Company

3,724

76 3,800

12

621

Walters Company

Walters Company

3,136

64 3,200

15

622

Jamie Ford Sales Salaries Expense

621

2,620

2,620

25

623

Walters Company*

Walters Company

3,283

67 3,350

25

624

Sunshine Company

Sunshine Company

2,597

53 2,650

29

625

Marlee Levin Marlee Levin, Withdrawals

302

4,000

4,000

30

626

Midwest Elec. Co.

Utilities Expense...................................690

990 990

30

627

Jamie Ford. Sales Salaries Expense

621

2,6 20

2,62 0

31

Totals 25,220

260 12,480

13,000

(101)

(507) (X) (201)

*3,990 – 640 return = 3,350


cGraw

-Hill Ryerson Lim



Problem 8-5B (continued)GENERAL JOURNAL Page

2Date

Account Title and Explanations PR Debit Credit

2011Oct.

4 Accounts Payable—Fireside Company....................................

201/

460

Merchandise Inventory........... 119 460 Defective merchandise returned.

9 Sales Returns and Allowances...... 414 850 Accounts Receivable—Marge Craig..........................................

106/

850

Returned merchandise was scrapped.

18

Sales Returns and Allowances...... 414 200

Accounts Receivable—Amy Izon 106/

200

Returned merchandise was scrapped.

19

Accounts Payable—Walters Company....................................

201/

640

Merchandise Inventory........... 119 640 Returned merchandise.

20

Accounts Payable—Green Supply Co. ............................................

201/

143

Office Supplies....................... 124 143 Returned office supplies.


Marge CraigDate Explanation PR Debit Credit Balan

ce2011

Oct.

6 S3 3,300 3,300

9 G2 850 2,4501 CR 2,450 0


5 3

Heather FlattDate Explanation PR Debit Credit Balan

ce2011

Oct.

12

S3 3,650 3,650

16

S3 4,290 7,940

22

CR3

3,650 4,290


Problem 8-5B (continued)Amy Izon


2011Oct.

15

S3 3,100 3,100

18

G2 200 2,900

25

CR3

2,900 0

Jan WildmanDate Explanation PR Debit Credit Balan

ce2011

Sept

23

S2 4,200 4,200

Oct.

2 CR3

4,200 0

21

S3 5,520 5,520

Part 2ACCOUNTS PAYABLE SUBLEDGER

Fireside CompanyDate Explanation PR Debit Credit Balan

ce2011

Sept

28

P1 4,260 4,260

Oct.

4 G2 460 3,800

6 CD4

3,800 0

Green Supply CompanyDate Explanation PR Debit Credit Balan

ce2011

Oct.

5 P2 1,300 1,300

16

P2 765 2,065


20

P2 7,475 9,540

20

G2 143 9,397

Sunshine CompanyDate Explanation PR Debit Credit Balan

ce2011

Oct.

15

P2 2,650 2,650

25

CD4

2,650 0

28

P2 6,030 6,030


Problem 8-5B (continued)Walters Company


2011Oct.

2 P2 3,200 3,200

12

CD4

3,200 0

15

P2 3,990 3,990

19

G2 640 3,350

25

CD4

3,350 0

Parts 2, 3GENERAL LEDGER

Cash Acct. No. 101


2011Sept

30

Balance 5,361

Oct.

31

CR3

117,952

123,313

31

CD4

25,220 98,093



2011Sept

30

Balance 4,200

Oct.

9 G2 850 3,350

18

G2 200 3,150

31

S3 19,860 23,010

31

CR3

13,200 9,810




2011Sept

30

Balance 66,970

Oct.

4 G2 460 66,510

19

G2 640 65,870

31

S3 10,960 54,910

31

P2 17,170 72,080

31

CD4

260 71,820

31

CR3

57,800 14,020



2011Sept

30

Balance 607

Oct.

20

G2 143 464

31

P2 765 1,229

Problem 8-5B (continued)Store Supplies Acct. No.

125Date Explanation PR Debit Credit Balan

ce2011

Sept

30

Balance 346

Oct.

28

CR3

58 288




2011Sept

30

Balance 42,129

Oct.

20

P2 7,475 49,604

Accumulated Amortization, Store Equipment

Acct. No. 166


2011Sept

30

Balance 9,153



2011Sept

30

Balance 4,260

Oct.

4 G2 460 3,800

19

G2 640 3,160

20

G2 143 3,017

31

P2 25,410 28,427

31

CD4

13,000 15,427

Marlee Levin, Capital Acct. No. 301


2011Sept

30

Balance 106,200

Marlee Levin, Withdrawals Acct. No. 302



2011Oct.

29

CD4

4,000 4,000

Sales Acct. No. 413


2011Oct.

31

S3 19,860 19,860

31

CR3

104,958

124,818


Problem 8-5B (continued)Sales Returns and Allowances Acct. No.

414Date Explanation PR Debit Credit Balan

ce2011

Oct.

9 G2 850 850

18

G2 200 1,050



2011Oct.

31

CR3

264 264

Cost of Goods Sold Acct. No. 502


2011Oct.

31

S3 10,960 10,960

31

CR3

57,800 68,760



2011Oct.

15

CD4

2,620 2,620

30

CD4

2,620 5,240

Rent Expense Acct. No. 640


2011Oc 2 CD 2,250 2,250


t. 4



2011Oct.

30

CD4

990 990


Problem 8-5B (concluded)Part 4

STARSHINE PRODUCTSTrial Balance

October 31, 2011Account Debit Credit

Cash......................................... $ 98,093

Accounts receivable................... 9,810Merchandise inventory............... 14,020Office supplies........................... 1,229Store supplies........................... 288Store equipment........................ 49,604Accumulated amortization, store equipment.................................

$ 9,153

Accounts payable....................... 15,427

Marlee Levin, capital.................. 106,200

Marlee Levin, withdrawals.......... 4,000Sales......................................... 124,8

18Sales returns and allowances...... 1,050Sales discounts.......................... 264Cost of goods sold..................... 68,760Sales salaries expense............... 5,240Rent expense............................. 2,250Utilities expense........................ 99

0

Totals....................................... $255,598

$255,598

STARSHINE PRODUCTSSchedule of Accounts Receivable

October 31, 2011

Heather Flatt........ $4,290Jan Wildman......... 5,520Total accounts payable................

$9,810


STARSHINE PRODUCTSSchedule of Accounts

PayableOctober 31, 2011

Green Supply Company..............

$ 9,397

Sunshine Company. .............

6,03 0

Total accounts payable................

$15,427


Problem 8-6B (30 minutes)


Date Account DebitedInvoice No. PR

A/R Dr.Sales Cr. P

R


2011July 9 W. Tilden 213 300.00 108.00

15 J. Samuelson 214 750.00 270.0022 V. Nels 215 600.00 200.6030 M. Bains 216 810.00 270.81



Date of

Invoice Terms PR A/P Cr. PR

Merchandise

Inventory

Dr.

Office Supplie

s Dr.

Other Accounts

Dr.2011July 4 Tulsco Supply July

4n/30 450.00 450.00

18 Gentry Holdings July 18

n/30 270.00 270.00

NOTE: An additional PR column has been added to facilitate the referencing of inventory entries into the inventory subsidiary ledger.


cGraw

-Hill Ryerson Lim




Problem 8-6B (concluded)Inventory Subledger Record — Weighted-Average Perpetual

Inventory Balance Dat e

PR Purchases Sales (at cost) (a) (b) (a)

(b)

Units

Unit Cos

tTotal Cost

Units

Unit Cost

Total Cost

Total

Units

Average

Cost/Unit

Total Cost

Inventory Balance Calculations

July 31

Beginning inventory

30 @ $12.00

= $ 360.00

30 $12.00

$ 360.00

30

$ 360.0

04 P

145 @ $10.

00= $

450.0045

@ 10.00

= 450 .00

75 $10.80

$ 810.00

75

$ 810.0

075

$ 810.0

09 S

110 @ $10.

80= $

108.00–10

@ 10.80

= –108.0

065 $10.8

0$

702.0065

$ 702.0

065

$ 702.0

015 S

125 @ $10.

80= $

270.00–25

@ 10.80

= –270.0

040 $10.8

0$

432.0040

$ 432.0

040

$ 432.0

018 P

130 @ $9.0

0= $

270.0030

@ 9.00

= 270 .00

70 $10.03

$ 702.00

70

$ 702.0

070

$ 702.0

022 S

120 @ $10.

03= $

200.60–20

@ 10.03

= – 200.6

050 $10.0

3$

501.4050

$ 501.4

050

$ 501.4


030 S

127 @ $10.

03= $

270.81–27

@ 10.03

= – 270.8

123 $10.0

3$

230.5923

$ 230.5

9Tota

l105

$1,080.00

82 $849.41 23 $230.59



Ending inventory



*Problem 8-7B (40 minutes)

Note: Since posting to the General Ledger was not a requirement in this problem, posting references are shown for values posted to the subledgers only.


eA/R Dr.


PR Sales Cr.

2011July

5 Karen Harden 918 18,400

6 Paul Kane 919 7,50013 Kelly Grody 920 8,35014 Karen Harden 921 4,100



July 15

Karen Harden

Sale of July 5 18,032 368 18,400

15


121,370

PURCHASES JOURNAL Page 3Accoun

tsOffice Other

Date of

Payable

Purchases

Supplies

Accounts



2011


cGraw

-Hill Ryerson Lim




July 1 Beech Company Jun. 30

2/10,n/60

6,300 6,300

7 Blackwater Inc./Store Supplies

July 7 n/10 EOM

1,050 1,050

9 Poppe’s Supply/Store Equipment

July 8 n/10 EOM

37,710

37,710

*Problem 8-7B (continued)CASH DISBURSEMENTS JOURNAL Page 3

Purchase

Other Accts.

Ch. Cash Discount

Accts. Payable


July 3 300 The Weekly Journal

Advertising Expense

575 575

10

301 Beech Company


15


30,620

30,620

GENERAL JOURNAL Page 3Date


PR Debit Credit


Inc. .....................................201/

150



cGraw

-Hill Ryerson Lim



*Problem 8-7B (concluded)ACCOUNTS RECEIVABLE SUBLEDGER


nce2011

July 5 S3 18,400 18,400

14

S3 4,100 22,500

15

CR3

18,400 4,100


nce2011

July 13

S3 8,350 8,350


nce2011

July

6 S3 7,500 7,500



e2011

July 1 P3 6,300 6,30010

CD3

6,300 0


e2011

July 7 P3 1,050 1,0508 G3 150 900



e2011

July 9 P3 37,710 37,710


e2011


*Problem 8-8B (70 minutes)SALES JOURNAL Page 3

Invoice

A/R Dr.


PR Sales Cr.

2011July

5 Karen Harden 918 18,400

6 Paul Kane 919 7,50013 Kelly Grody 920 8,35014 Karen Harden 921 4,10029 Paul Kane 922 28,09

030 Kelly Grody 923 15,75

0Totals 82,19

0(106/413)



July 15

Karen Harden

Sale of July 5 18,032

368 18,400

15


121,370

16

Paul Kane Sale of July 6 7,350 150 7,500

21

L.T. Notes P.

Note to bank 251

20,000

20,000


cGraw

-Hill Ryerson Lim



23

Kelly Grody

Sale of July 13 8,183 167 8,350

24

Karen Harden

Sale of July 14 4,018 82 4,100

31

Sales Cash sales 79,0 20

79,0 20

Totals 257,973

767 38,350

200,390

20,000

(101) (415) (106) (413) (X)

*Problem 8-8B (continued)

PURCHASES JOURNAL Page 3Account

sOffice Other

Date of

Payable Purchases

Supplies

Accounts



2011July 1 Beech Company Jun.

302/10,n/60

6,300 6,300

7 Blackwater Inc./Store Supplies

July 7

n/10 EOM

125/

1,050 1,050

9 Poppe’s Supply/Store Equipment

July 8

n/10 EOM

165/

37,710 37,710

17 Sprague Company July 17

2/10,n/60

8,200 8,200

20 Poppe’s Supply July 19

n/10 EOM

750 750

26 Beech Company July 26

2/10,n/30

9,770 9,77 0

Totals 63,780 24,270

750 38,760

(201) (505) (124)

(X)


seOther Accts.

Ch. Cash Discount

Accts. Payable

Date No. Payee Account Debited PR Credit Credit Debit Debit


cGraw

-Hill Ryerson Lim




2011July 3 300 The Weekly

JournalAdvertising Expense

655 575 575

10

301 Beech Company


15


621 30,620

30,620

27

303 Sprague Company

Sprague Company

5,684 116 5,800*

31


621 30,620

30,620

Totals 73,673

242 61,815

12,100

(101) (506) (X) (201)*$8,200 - $2,400 return = $5,800

*Problem 8-8B (continued)GENERAL JOURNAL Page 3

Date


PR Debit Credit


Inc. .....................................201/

150


24

Accounts Payable—Sprague Company.............................

201/

2,400

Purchase Returns and Allowances..........................

507 2,400

Returned defective inventory to merchandise supplier.


Cash Acct. No. 101


2011June

30


July 31

CR3

257,973

352,973

31

CD3

73,673 279,300



2011July 3

1S3 82,190 82,190

31

CR3

38,350 43,840




2011Jun. 3


0



2011July 3

1P3 750 750


*Problem 8-8B (continued)Store Supplies Acct. No.


e2011

July 7 P3 1,050 1,0508 G3 150 900



2011July 9 P3 37,710 37,710


Date Explanation PR Debit Credit Balance2011

July 8

G3 150 (150)

24

G3 2,400 (2,550)

31

P3 63,780 61,230

31

CD3

12,100 49,130



2011June

30


July 21

CR3

20,000 187,000

Gene Eldridge, Capital Acct. No. 301


2011Jun. 3 Balance Forward 95,000


0

Sales Acct. No. 413


2011July 3

1S3 82,190 82,190

31

CR3

200,390

282,580



2011July 3

1CR3

767 767


*Problem 8-8B (continued)Purchases Acct. No.


e2011

July 31

P3 24,270 24,270

Purchase Discounts Acct. No. 506


2011July 3

1CD3

242 242

Purchase Returns and Allowances Acct. No. 507


2011July 2

4G3 2,400 2,400



2011July 1

5CD3

30,620

30,620

31

CD3

30,620

61,240



2011July 3 CD

3575 575




nce2011

July 5 S3 18,400 18,400

14

S3 4,100 22,500

15

CR3

18,400 4,100

24

CR3

4,100 0


nce2011

July 13

S3 8,350 8,350

23

CR3

8,350 0

30

S3 15,750 15,750


*Problem 8-8B (continued)Paul Kane


2011July

6 S3 7,500 7,500

16

CR3

7,500 0

29

S3 28,090 28,090



e2011

July 1 P3 6,300 6,30010

CD3

6,300 0

26

P3 9,770 9,770


e2011

July 7 P3 1,050 1,0508 G3 150 900


e2011

July 9 P3 37,710 37,71020

P3 750 38,460


e2011


July 17

P3 8,200 8,200

24

G3 2,400 5,800

27

CD3

5,800 0


*Problem 8-8B (concluded)Part 5

ELDRIDGE INDUSTRIESTrial BalanceJuly 31, 2011

Account Debit CreditCash................................................ $279,3

00Accounts receivable......................... 43,840Merchandise inventory..................... 167,00

0Office supplies................................. 750Store supplies.................................. 900Store equipment.............................. 37,710Accounts payable............................. $

49,130Long-term notes payable.................. 187,00

0Gene Eldridge, capital...................... 95,000Sales............................................... 282,58

0Sales discounts................................ 767Purchases........................................ 24,270Purchase discounts.......................... 242Purchase returns and allowances...... 2,400Sales salaries expense..................... 61,240Advertising expense......................... 5

75

Totals.............................................. $616,352

$616,352

ELDRIDGE INDUSTRIESSchedule of Accounts Receivable

July 31, 2011

Kelly Grody...................................... $15,750Paul Kane......................................... 28,090 Total accounts receivable.................. $43,840


ELDRIDGE INDUSTRIESSchedule of Accounts Payable

July 31, 2011

Beech Company................................ $ 9,770Blackwater Inc. ............................... 900Poppe’s Supply................................ 38,460 Total accounts payable..................... $49,130


*Problem 8-9B - Perpetual (100 minutes) Part 4SALES JOURNAL Page 2

Accts. PST GST COGS Invoic

eRec. Payab

lePayab

leSales Dr./


PR Debit Credit Credit Credit MI Cr.

2011Nov.

8 Leroy Holmes 439 7,366.00

635.00

381.00

6,350.00

4,445.00

10

Sam Spear 440 14,500.00

1,250.00

750.00

12,500.00

8,750.00

15

Marjorie Cook 441 4,930.00

425.00

255.00

4,250.00

2,975.00

22

Sam Spear 442 3,010.20

259.50

155.70

2,595.00

1,800.00

24

Marjorie Cook 443 3,758. 40

324.0

0

194. 40

3,240 .00

2,260 .00

31

Totals 33,564.60

2,893.50

1,736.10

28,935.00

20,230.00

(106) (224) (225) (413) (502/119)

CASH RECEIPTS JOURNAL Page 3Sales Accts. Other PST GST COGS

Account Cash Disc. Rec. Sales Accts Payable

Payable

Dr./

Date Credited Explanation

PR Debit Debit Credit Credit Credit Credit Credit MI Cr.

2011


cGraw

-Hill Ryerson Lim




Nov.

2 L.T. Notes Pay

Note to bank

251

86,250.00

86,250.00

15

Sales Cash sales 31,517.20

27,170.00

2,717.00

1,630.20

19,000.00

18

Leroy Holmes

Invoice, Nov 8

7,239.00

127.00

7,366.00

19

Sam Spear Invoice, Nov 10

14,250.00

250.00

14,500.00

25

Marjorie Cook

Invoice, Nov 15

4,845.00

85.00

4,930.00

30

Sales Cash sales 41,415 .48

35,703.00

3,570.30

2,142.18

25,000.00

30

Totals 185,516.68

462.00

26,796.00

62,873.00

86,250.00

6,287.30

3,772.38

44,000.00

(101) (415) (106) (413) (X) (224) (225) (502/119)

*Problem 8-9B - Perpetual (continued)

PURCHASES JOURNAL Page 2Accts. Merchan

diseOther GST

Date of

Payable

Inventory

Accounts

Rec’ble



2011Nov.

1 Jett Supply/Office Equip.

Nov 1 n/10 EOM

163/

5,365.72

5,062.00

303.72

4 Defore Industries Nov 3 2/10, n/30

12,084.00

11,400.00

684.00

5 Atlas Company/Store Supplies

Nov 5 n/10 EOM

125/

1,081.20

1,020.00

61.20

11 The Welch Company Nov 10

2/10, n/30

3,060.22

2,887.00 173.22

16 Atlas Company/Office Supplies

Nov 16

n/10 EOM

124/

592 .54

559 . 00

33 .54

30 Totals 22,183 .68

14,287 .0 0

6,641 . 00

1,255.68

(201) (119) (X) (108)

CASH DISBURSEMENTS JOURNAL Page 3Merch. Other GST Accts.

Ch. Cash Inventory

Accts. Rec’ble

Payable

Date No. Payee Account Debited PR Credit Credit Debit Debit Debit2011

No 1 633 Defore Defore 11,856 228.00 12,084


cGraw

-Hill Ryerson Lim



v. 2 Industries Industries .00 .0015


621 8,435.00

8,435.00

19

635 The Welch Co.*

The Welch Company

2,496.00

48.00 2,544.00

30


621 8,435.

00

8,435. 00

30

Totals 31,222.00

276.00 16,870.00

14,628.00

(101) (119) (X) (201)*2,887 – 487 = 2,400; 2,400 x 2% = 48 discount


*Problem 8-9B - Perpetual (continued)GENERAL JOURNAL Page

2Date Account Titles and Explanations PR Debit

Credit2011

Nov.

17

Accounts Payable—The Welch Company.................................

201/

516.22

GST Payable....................... 225 29.22

Merchandise Inventory ....... 119 487.00


26

Accounts Payable—Jett Supply. . 201/

977.32

Office Equipment................ 163 922.00

GST Payable....................... 225 55.32

Returned office equipment.


Marjorie CookDate Explanation PR Debit Credit Balanc

e2011

Nov.

15 S2 4,930.50

4,930.50

24 S2 3,758.40

8,688.40

25 CR2

4,930.00

3,758.40

Leroy HolmesDate Explanation PR Debit Credit Balanc

e2011

Nov.

8 S2 7,366.00

7,366.00

18 CR2

7,366.00

0.00

Sam Spear



2011Nov.

10 S2 14,500.00

14,500.00

19 CR2

14,500.00

0.00

22 S2 3,010.20

3,010.20

Parts 3 and 4ACCOUNTS PAYABLE SUBLEDGER

Atlas CompanyDate Explanation PR Debit Credit Balanc

e2011

Nov.

5 P2 1,081.20

1,081.20

16 P2 592.54 1,673.74


*Problem 8-9B - Perpetual (continued)Defore Industries


2011Nov.

4 P2 12,084.00

12,084.00

12 CD2

12,084.00

0.00


e2011

Nov.

1 P2 5,365.72

5,365.72

26 G2 977.32 4,388.40


e2011

Nov.

11 P2 3,060.22

3,060.22

17 G2 516.22 2,544.00

19 CD2

2,544.00

0.00

Parts 1 and 4



e2011

Nov.

30 CR2

185,516.68

185,516.68

30 CD2

31,222.00

154,294.68




2011Nov.

30 S2 33,564.60

33,564.60

30 CR2

26,796.00

6,768.60



2011Nov.

30 P2 1,255.68

1,255.68


*Problem 8-9B - Perpetual (continued)Merchandise Inventory Acct. No.


e2011

Oct.

31 210,000.00

Nov.

17 G2 487.00 209,513.00

30 S2 20,230.00

189,283.00

30 CR3

44,000.00

145,283.00

30 P2 14,287.00

159,570.00

30 CD3

276.00 159,294.00



2011Nov.

30 P2 559.00 559.00



2011Nov.

5 P2 1,020.00

1,020.00



2011Nov.

1 P2 5,062.00

5,062.00

26 G2 922.00 4,140.00




2011Nov.

17 G2 516.22 (516.22)

26 G2 977.32 (1,493.54)

30 P2 22,183.68

20,690.14

30 CD2

14,628.00

6,062.14



2011Nov.

30 S2 2,893.50

2,893.50

30 CR2

6,287.30

9,180.80


*Problem 8-9B - Perpetual (continued)



2011Nov.

17 G2 29.22 29.22

26 G2 55.32 84.5430 S2 1,736.

101,820.6

430 CR

23,772.

385,593.0

2



2011Nov.

2 CR2

86,250.00

86,250.00

Asha Crystal, Capital Acct. No. 301


2011Oct.

31 210,000.00

Sales Acct. No. 413


2011Nov.

30 S2 28,935.00

28,935.00

30 CR2

62,873.00

91,808.00




2011Nov.

30 CR2

462.00 462.00



2011Nov.

30 S2 20,230.00

20,230.00

30 CR3

44,000.00

64,230.00



2011Nov.

15 CD2

8,435.00

8,435.00

30 CD2

8,435.00

16,870.00

*Problem 8-9B - Perpetual (concluded)Part 5

CRYSTAL COMPANYTrial Balance

November 30, 2011Account Debit Credit

Cash............................................$154,294.68Accounts receivable...................... 6,768.60GST receivable............................. 1,255.68Merchandise inventory..................159,294.00Office supplies.............................. 559.00Store supplies.............................. 1,020.00Office equipment.......................... 4,140.00Accounts payable......................... $ 6,062.14PST payable................................. 9,180.80GST payable................................. 5,593.02


Long-term notes payable...................................................86,250.00Asha Crystal, capital........................................................210,000.00Sales.................................................................................91,808.00Sales discounts............................ 462.00Cost of goods sold........................64,230.00Sales salaries expense.................. 16,870.00 Totals..........................................$408,893.96.................................$408,893.96

CRYSTAL COMPANYSchedule of Accounts Receivable

November 30, 2011Marjorie Cook.................$3,758.40Sam Spear...................... 3,010.20Total accounts receivable $6,768.60

CRYSTAL COMPANYSchedule of Accounts Payable

November 30, 2011Atlas Company................$1,673.74Jett Supply...................... 4,388.40Total accounts payable....$6,062.14


*Problem 8-9B - Periodic (100 minutes)Part 4 SALES JOURNAL Page 2

Accts. PST GSTInvoic

eRec. Payab

lePayab

leSales


PR Debit Credit Credit Credit

2011Nov.

8 Leroy Holmes 439 7,366.00

635.00

381.00

6,350.00

10

Sam Spear 440 14,500.00

1,250.00

750.00

12,500.00

15

Marjorie Cook 441 4,930.00

425.00

255.00

4,250.00

22

Sam Spear 442 3,010.20

259.50

155.70

2,595.00

24

Marjorie Cook 443 3,758 .40

324.0

0

194. 40

3,240 .00

31

Totals 33,564.60

2,893.50

1,736.10

28,935.00

(106) (224) (225) (413)

CASH RECEIPTS JOURNAL Page 3Sales Accts. Other PST GST

Account Cash Discount

Rec. Sales Accts Payable

Payable

Date Credited Explanation

PR

Debit Debit Credit Credit Credit Credit Credit

2011No 2 L.T. Notes Note to 25 86,250. 86,250


cGraw

-Hill Ryerson Lim



v. Pay bank 1 00 .0015


27,170.00

2,717.00

1,630.20

18

Leroy Holmes

Invoice, Nov 8

7,239.00

127.00

7,366.00

19

Sam Spear Invoice, Nov 10

14,250.00

250.00

14,500.00

25

Marjorie Cook

Invoice, Nov 15

4,845.00

85.00 4,930.00

30


35,703.00

3,570.30

2,142.18

30

Totals 185,516.68

462.00

26,796.00

62,873.00

86,250.00

6,287.30

3,772.38

(101) (415) (106) (413) (X) (224) (225)

*Problem 8-9B - Periodic (continued)

PURCHASES JOURNAL Page 2Accts. Other GST

Date of

Payable

Purchases

Accounts

Rec’ble



2011Nov.

1 Jett Supply/Office Equip.

Nov 1 n/10 EOM

163/

5,365.72

5,062.00

303.72

4 Defore Industries Nov 3 2/10, n/30

12,084.00

11,400.00

684.00

5 Atlas Company/Store Supplies

Nov 5 n/10 EOM

125/

1,081.20

1,020.00

61.20

11 The Welch Company Nov 10

2/10, n/30

3,060.22

2,887.00

173.22

16 Atlas Company/Office Supplies

Nov 16

n/10 EOM

124/

592 .54

559 . 00

33 .54

30 Totals 22,183 .68

14,287 . 00

6,641 . 00

1,255.68

(201) (505) (X) (108)

CASH DISBURSEMENTS JOURNAL Page 3Pur. Other GST Accts.

Ch. Cash Disc. Accts. Rec’ble

Payable

Date No. Payee Account Debited PR Credit Credit

Debit Debit Debit

2011No 1 633 Defore Defore 11,856 228. 12,084


cGraw

-Hill Ryerson Lim




v. 2 Industries Industries .00 00 .0015


621 8,435.00

8,435.00

19

635 The Welch Co.

The Welch Company

2,496.00

48.00

2,544.00

30


621 8,435.

00

8,435. 00

30

Totals 31,222.00

276.00

16,870.00

14,628.00

(101) (507)

(X) (201)

*Problem 8-9B - Periodic (continued) GENERAL JOURNAL Page

2Date Account Titles and Explanations PR Debit

Credit2011

Nov.

17

Accounts Payable—The Welch Company.................................

201/

516.22

GST Payable....................... 225 29.22

Purchases Returns and Allowances ..............................

506 487.00


26

Accounts Payable—Jett Supply. . 201/

977.32

Office Equipment................ 163 922.00

GST Payable....................... 225 55.32

Returned office equipment.

Parts 2 and 4


Marjorie CookDate Explanation PR Debit Credit Balanc

e2011

Nov.

15 S2 4,930.00

4,930.00

24 S2 3,758.40

8,688.40

25 CR3

4,930.00

3,758.40

Leroy HolmesDate Explanation PR Debit Credit Balanc

e2011

Nov.

8 S2 7,366.00

7,366.00

18 CR 7,366. 0.00


3 00

Sam SpearDate Explanation PR Debit Credit Balanc

e2011

Nov.

10 S2 14,500.00

14,500.00

19 CR3

14,500.00

0.00

22 S2 3,010.20

3,010.20


*Problem 8-9B - Periodic (continued) Parts 3 and 4


Atlas CompanyDate Explanation PR Debit Credit Balanc

e2011

Nov.

5 P2 1,081.20

1,081.20

16 P2 592.54 1,673.74

Defore IndustriesDate Explanation PR Debit Credit Balanc

e2011

Nov.

4 P2 12,084.00

12,084.00

12 CD3

12,084.00

0.00


e2011

Nov.

1 P2 5,365.72

5,365.72

26 G2 977.32 4,388.40


e2011

Nov.

11 P2 3,060.22

3,060.22

17 G2 516.22 2,544.00

19 CD3

2,544.00

0.00


*Problem 8-9B - Periodic (continued) Parts 1 and 4



e2011

Nov.

30 CR3

185,516.68

185,516.68

30 CD3

31,222.00

154,294.68



2011Nov.

30 S2 33,564.60

33,564.60

30 CR3

26,796.00

6,768.60



2011Nov.

30 P2 1,255.68

1,255.68



2011Oct.





2011Nov.

30 P2 559.00 559.00



2011Nov.

5 P2 1,020.00

1,020.00


*Problem 8-9B - Periodic (continued)Office Equipment Acct. No.


e2011

Nov.

1 P2 5,062.00

5,062.00

26 G2 922.00 4,140.00



2011Nov.

17 G2 516.22 (516.22)

26 G2 977.32 (1,493.54)

30 P2 22,183.68

20,690.14

30 CD3

14,628.00

6,062.14



2011Nov.

30 S2 2,893.50

2,893.50

30 CR3

6,287.30

9,180.80



2011Nov.

17 G2 29.22 29.22

26 G2 55.32 84.5430 S2 1,736.

101,820.6

4


30 CR3

3,772.38

5,593.02



2011Nov.

2 CR3

86,250.00

86,250.00

Asha Crystal, Capital Acct. No. 301


2011Oct.



*Problem 8-9B - Periodic (continued)Sales Acct. No.


e2011

Nov.

30 S2 28,935.00

28,935.00

30 CR3

62,873.00

91,808.00



2011Nov.

30 CR3

462.00 462.00

Purchases Acct. No. 505


2011Nov.

30 P2 14,287.00

14,287.00

Purchases Returns and Allowances Acct. No. 506


2011Nov.

17 G2 487.00 487.00

Purchases Discounts Acct. No. 507


2011Nov.

30 CD3

276.00 276.00




2011Nov.

15 CD3

8,435.00

8,435.00

30 CD3

8,435.00

16,870.00


*Problem 8-9B - Periodic (concluded)Part 5

CRYSTAL COMPANYTrial Balance

November 30, 2011Account Debit Credit

Cash............................................$154,294.68Accounts receivable...................... 6,768.60GST receivable............................. 1,255.68Merchandise inventory..................210,000.00Office supplies.............................. 559.00Store supplies.............................. 1,020.00Office equipment.......................... 4,140.00Accounts payable......................... $ 6,062.14PST Payable................................. 9,180.80GST Payable................................. 5,593.02Long-term notes payable...................................................86,250.00Asha Crystal, capital........................................................210,000.00Sales.................................................................................91,808.00Sales discounts............................ 462.00Purchases....................................14,287.00Purchases returns and allowances. 487.00Purchases discounts..................... 276.00Sales salaries expense.................. 16,870.00 Totals..........................................$409,656.96.................................$409,656.96


CRYSTAL COMPANYSchedule of Accounts Receivable

November 30, 2011Marjorie Cook.................$3,758.40Sam Spear...................... 3,010.20Total accounts receivable $6,768.60

CRYSTAL COMPANYSchedule of Accounts Payable

November 30, 2011Atlas Company................$1,673.74Jett Supply...................... 4,388.40Total accounts payable....$6,062.14


*Problem 8-10B (30 minutes)Sales Journal Page X


Invoice No.

PR A/R Dr

PST Payable

CR

GST Payable

CRSales Cr

COGS DRMerchandise Inventory CR

2011May 3 Ajax

Holdings361 6,84

0480 360 6,000 3,200

30 Allendale Arena

363 4,218

296 222 3,700 1,900

Cash Receipts Journal

Page X

Date

Account Credited

Explanation

PRCash DR

Sales DiscDr

A/R CR

Sales CR

Other Accounts CR

PST Payable CR

GST Payable CR

COGS/DR Merchandis

e Inventory/C

R201

1May

1John Trenton, Capital

9,000 9,000

12 A/R – Ajax 6,780 60 6,840

13 Sales Inv #362 2,052 1,800

144 108 1,100

15 Bank Loan Payable

5,000 5,000


Date Account Credited Terms PR A/P CR

Merchandise

Inventory

Other Accounts

DR

GST Rec’ble

DR


cGraw

-Hill Ryerson Lim



DR2011May 7 Moore

Corporation/Off. Supplies

n/30 3,392 3,200 192

16 London Company 1/15,n/30

7,632 7,200 432

Cash Disbursements Journal

Page X

Date Ch #

Account Debited PR Cash CRMerchand

iseInventory

CR

Other Accounts

DR

GST Rec’ble

DRA/P DR

2011May 5 83 Merchandise

Inventory1,696 1,600 96

30 84 A/P – Moore Corporation

3,392 3,392

*Problem 8-11B (30 minutes)SALES JOURNAL Page X


Date


2011

May 3 Ajax Holdings 361 6,840 480 360 6,00030 Allendale Arena 363 4,218 296 222 3,700

CASH RECEIPTS JOURNAL Page XSales Accts. Other PST GST

Cash Discount

Rec. Sales Accts. Payable Payable


Explanation

PR Debit Debit Credit Credit Credit Credit Credit

2011May

1John Trenton, Capital

9,000 9,000

12 A/R – Ajax 6,780 60 6,84013 Sales Inv #362 2,052 1,800 144 10815 Bank Loan

Payable5,000 5,000

PURCHASES JOURNAL Page XAccts. Other GST

Date of

Payable Purchases

Accounts Rec’ble



2011


cGraw

-Hill Ryerson Lim




May 7 Moore Corporation/Off. Supplies

May 7 N/30 3,392 3,200 192

16 London Company May 16

1/15,n/30

7,632 7,200 432

CASH DISBURSEMENTS JOURNAL PageXCh.

Cash Pur. Disc.

Other Accts.

GST Rec’ble

Accts. Payable

Date No.



2011May

583 Merchandise

InventoryPurchases 1,696 1,600 96

30 84 A/P – Moore Corporation

Lexor Suppliers

3,424 3,424

ANALYTICAL & REVIEW PROBLEMSA&R Problem 8-1


DateAccount Debited

Invoice No. PR

A/R Dr.Sales

Cr. PR


2011Oct.

9Kitchen Club

210 1,125.00

465.75

18 Thorhild Co-op

211 2,250.00

1,090.50

24 Boyle Grocery

212 750.00 353.00



Date of

Invoice Terms

PR

A/P CR

PR

Merchandise

Inventory

DR

Office Suppl

ies Dr.

Other Accounts DR

2011Oct.

3Arnold Brothers

Oct. 3

2/10, n/30

750.00

750.00

15 Arnold Brothers

Oct. 15

2/10, n/30

1,550.00

1,550.00

31 Arnold Brothers

Oct. 31

2/10, n/30

600.00

600.00

Cash Disbursements Journal Page 1

DateCh # Payee Account

DebitedPR Cash

Cr.PR

Merchandise

Inventor

Other Accounts

Dr.A/P Dr.


cGraw

-Hill Ryerson Lim



y Cr.2011

Oct. 19

101

Arnold Brothers

A/P – Arnold Brothers

600.00 600.00

23 102

Arnold Brothers

A/P – Arnold Brothers

1,519.00

31.00 1,550.00

NOTE: An additional PR column has been added to the Sales and Purchases Journals to facilitate the referencing of inventory entries into the inventory subledger.

A&R Problem 8-1 (concluded)General Journal Page: G

1Date Account Titles and

ExplanationsPR

Debit Credit

2011Oct.

4 Accounts Payable – Arnold Brothers............................

150.00

Merchandise Inventory. . 150.00

To record the return of 20 units.

Inventory Subledger Record — Weighted-Average PerpetualInventory Balance

Date

PR Purchases Sales (at cost) (a) (b) (a)

(b)

Units

Unit Cost

Total Cost

Units

Unit Cost

Total Cost

Total

Units

Average

Cost/Unit

Total Cost

Inventory Balance Calculations

Oct. 1

Beginning inventory

85 @ $5.00

= $ 25.00

85 $5.00

$ 425.00

85 $ 425.00

3 P1 100 @ $7.50

= $ 50.00

10 0

@ 7.50

= 75 0.00

185 $6.35

$ 1,175.00

185 $ 1,175.0

0185 $

1,175.00

4 G1 –20 @ $7.50

= –$ 150.00

– 20

@ 7.50

= – 150.00

165 $6.21

$ 1,025.00

165 $ 1,025.0

0165 $

1,025.00

9 S1 75 @ $6.21

= $ 465.75

– 75

@ 6.21

= – 465.75

90 $6.21

$ 559.25

90 $ 559.25

90 $ 559.25

15 P1 200 @ $7.75

= $ 1,550.00

2 00

@ 7.75

= 1,55 0.00

290 $7.27

$ 2,109.25

290 $ 2,109.2


5290 $

2,109.25

18 S1 150

@ $7.27

= $ 1,090.5

0

–150

@ 7.27

= – 1,090.5

0140 $7.2

8$

1,018.75140 $

1,018.75

140 $ 1,018.7

523 G1 –$

31.00

0 – 31.00

140 $7.06

$ 987.75

140 $ 987.75

140 $ 987.75

24 S1 50 @ $7.06

= $ 353.00

– 50

@ 7.06

= – 353.00

90 $7.06

$ 634.75

90 $ 634.75

90 $ 634.75

31 P1 75 @ $8.00

= $ 600.00

7 5

@ 8.00

= 600 .00

165 $7.48

$ 1,234.75

165 $ 1,234.7

5Total 440 $3,144.0

0275

$1,909.25

165 $1,234.75



Ending inventory



Ethics Challenge

EC 8–1

1. Independence in fact means that the auditor maintains an objective point of view of the client. Independence in appearance means that a third party viewing the relationship between the auditor/client would have no reason to believe that the auditor is not independent of the client.

2. While auditors are hired by their clients to perform audits, auditors also have a responsibility to the public. In our society auditors provide credibility to financial reporting situations by offering professional audit opinions about companies’ financial statements. While it is sometimes difficult to be responsible to clients as well as the public, auditors must maintain their independence to keep the public trust.

3. Since John Harris is a sole practitioner it is questionable whether he can consult on the client’s accounting system and then remain objective in subsequent years when he performs the audit of the company. Large firms often separate consulting and auditing engagements for the same client by having staff stationed in two different geographic branches of the firm do the work. Or a large local firm might be able to perform consulting and auditing for the same client by assigning different personnel to the two jobs. In this scenario John would need to do both jobs himself, making it difficult to maintain independence in fact and appearance.


Focus on Financial Statements

FFS 8-1

Single-step income statement:

MANGO DESIGNSIncome Statement

For Month Ended June 30, 2011

Revenues:Net sales ................................$211,404

Expenses:Cost of goods sold ................... $134,750Sales salaries expense ............. 42,000Office supplies expense ........... 13,400Advertising expense................. 600Amortization expense, store equipment 500Interest expense ..................... 200Total expenses......................... 191,450

Net income.................................. $ 19,954


FFS 8-1 (concluded)

MANGO DESIGNSStatement of Owner’s Equity

For Month Ended June 30, 2011Tom Mandalay, capital, June 1 $ -0-Add: Owner investment 75,000 Net income ........ 19,954 Tom Mandalay, capital, June 30$94,954

MANGO DESIGNSBalance SheetJune 30, 2011

Assets Current assets: Cash.............................................. $156,304

Accounts receivable....................... 64,000Merchandise inventory................... 36,750Office supplies .............................. 4,600Total current assets ......................$261,654

Property, plant and equipment:Store equipment............................ $32,000

Less: Accumulated amortization . 500 31,500

Total assets......................................$293,154

Liabilities Current liabilities:

Accounts payable .......................... $148,000Interest payable............................ 200Total current liabilities................... $148,200

Long-term liabilities:Notes payable............................... 50,000

Total liabilities.....................................$198,200Owner’s Equity Tom Mandalay, capital .................. 94,954Total liabilities and owner’s equity... .

$293,154


Analysis Component

Mango Designs operates under a perpetual inventory system because the special journals include the Cost of Goods Sold account.


FFS 8-2Danier Leather’s June 25, 2005, balance sheet includes Accounts receivable of $594 (thousand), about 0.7% of total assets (calculated as $594/$83,365 x 100). Although these accounts receivable are not significant in total, they represent amounts owed by various customers to Danier so it would help decision makers better monitor collection if the details of individual balances owed, by whom, and dates due were maintained in an accounts receivable subledger.

The same logic would apply regarding the June 25, 2005, Accounts payable and accrued liabilities balance of $8,170 (thousand), about 10% of total assets (calculated as $8,170/$83,365 x 100). Since these accounts payable are significant in total and represent amounts owed to various creditors, it would help decision makers better manage payments if the details of individual balances owed, by whom, credit terms, and dates due were maintained in an accounts payable subledger.

The June 25, 2005, balance sheet shows inventories of $29,031 (thousand), about 34.82% of total assets (calculated as $29,031/$83,365 x 100). Because Danier sells clothing and accessories, the inventory balance is significant and represents a large variety of items. It would help decision makers better manage inventory if the details of unit costs, units sold, units purchased, and units on hand along with any returns and/or allowances were detailed in an inventory subledger.


Critical Thinking QuestionCT 8-1Note to instructor: Student responses will vary therefore the answer here is only suggested and not inclusive of all possibilities; it is presented in point form for brevity.

Problem(s):— Detailed information regarding mining assets is required

but is not readily available given the current accounting information system

Goal(s)*:— To ensure the accounting information system is

maintained in such a way that reasonable internal requests for information can be fulfilled efficiently and effectively

Assumption(s)/Principle(s):— That the computer system in place at Northern Outposts

can accommodate special purpose reports— The disclosure principle requires that anything of

significance be reportedFacts:

— as presented

Conclusion(s)/Consequence(s):— Internal/external reporting requirements need to be identified

and matched against what is currently being provided by the accounting information system … gaps need to be identified and resolved to ensure that decisions dependent on such reports can be done efficiently and effectively

*The goal is highly dependent on “perspective.”


COMPREHENSIVE PROBLEMSComprehensive Problem 8.1—Alpine Company (150 minutes)


eA/R Dr. COGS Dr.


PR Sales Cr.

Merch. Inv. Cr

2011May

2 Essex Company 8785 6,100 3,660

16 Essex Company 8786 3,990 2,39422 Oscar Services 8787 6,850 4,11026 Deaver Corp. 8788 14,

210 8,52

631 Totals 31,

150 18,69

0(106/413)

(502/119)

CASH RECEIPTS JOURNAL Page 2Sales Accts. Othe

rCOGS

Dr.Account Cash Disc. Rec. Sales Accts

.Merch.

Inv.Date Credited Explanation PR Debit Debit Credit Credit Credi

tCredit

2011May

5 Nabors, Inc.*

Sale of Apr. 28 4,459 91 4,550

9 Store Supplies

Sold store supplies

125

350 350

11

Essex Company

Sale of May 2 5,978 122 6,100

1 Sales Cash sales, 59,22 59,220 35,532


cGraw

-Hill Ryerson Lim




5 May 1-15 030

Oscar Services

Sale of May 22 6,713 137 6,850

31

Sales Cash sales, May 16-31

66,05

2

66,05 2

39,630

31

Totals 142,772

350 17,500

125,272

350 75,162

(101) (414) (106) (413) ( X ) (502/119)

*4,725 – 175 = 4,550; 4,550 x 2% = 91 discount

Comprehensive Problem 8.1—Alpine Company (continued)PURCHASES JOURNAL Page 2

Accounts

Merchandise

Office Other

Date of

Payable Inventory

Supplies

Accounts



2011May 4 Store Supp./Thompson

Supp.May 04

n/10 EOM

125/ 37,729 37,072 83 574

10 Off. Equip./Thompson Supp.

May 10

n/10 EOM

163/ 4,074 4,074

11 Gale, Inc. May 10

2/10, n/30

8,800 8,800

17 Chandler Corp. May 14

2/10, n/60

13,650 13,650

24 Store Supp./Thompson Supp.

May 24

n/10 EOM

125/ 9,030 8,120 280 630

25 Parkay Products May 23

2/10, n/30

3,080 3,080

31 Totals 76,363 70,722 363 5,278 (201) (119) (124

) (X)


diseOther Accts.

Ch. Cash Inventory Accts. PayableDate No. Payee Account Debited PR Credi

tCredit Debit Debit

2011May 1 341

0S&M Mgmt. Co.

Rent Expense, Selling Space

642 2,968

Rent Expense, Office 641 3,71 742


cGraw

-Hill Ryerson Lim



Space 08 341

1Parkay Products

Parkay Products 6,174

126 6,300

15 3412


621 5,320

Office Salaries Expense

620 8,470

3,150

19 3413

Gale, Inc. Gale, Inc. 8,624

176 8,800

23 3414

Chandler Corp.

Chandler Corp. 13,377

273 13,650

26 3415

Trinity Power

Utilities Expense 690 1,283

1,283

29 3416

Clint Barry C. Barry, Withdrawal

302 7,000

7,000

30 3417


621 5,320


620 8,4 70

3,15 0

31 Totals 57,108

575 28,933

28,750

(101)

(119) ( X )

(201)

Comprehensive Problem 8.1—Alpine Company (continued)GENERAL JOURNAL Page 3

Date Account Titles and Explanations PR Debit Credit2011May 2 Sales Returns and Allowances... 415 175

Accounts Receivable—Nabors, Inc. 106/175

3 Accounts Payable—Parkay Products 201/798

Merchandise Inventory........ 119 798

12 Accounts Payable—Thompson Supply Co. 201/854

Office Equipment................. 163 854

Adjusting entries:

May31 Insurance Expense................... 637 553Prepaid Insurance................ 128 553

31 Store Supplies Expense............ 651 669Store Supplies..................... 125 669

31 Office Supplies Expense............ 650 289Office Supplies.................... 124 289

31 Amortization Expense, Store Equipment 613567

Accumulated Amort., Store Equipment 166567

31 Amortization Expense, Office Equipment 612329

Accumulated Amort., Office Equipment 164329

31 Cost of Goods Sold................... 502 4,577Merchandise Inventory........ 119 4,577


Comprehensive Problem 8.1—Alpine Company (continued)Closing entries: Page 4

2011

May31 Sales..................................... 413156,422 Income Summary........... 901 156,422

31 Income Summary................... 901123,294Sales Discounts................. 414 350Sales Returns and Allowances 415

175Cost of Goods Sold............ 502 98,429Amort. Expense, Office Equipment 612

329Amort. Expense, Store Equipment 613

567Office Salaries Expense...... 620 6,300Sales Salaries Expense...... 621 10,640Insurance Expense............ 637 553Rent Expense, Office Space 641 742Rent Expense, Selling Space 642

2,968Office Supplies Expense..... 650 289Store Supplies Expense..... 651 669Utilities Expense............... 690 1,283

31 Income Summary................... 901 33,128Clint Barry, Capital............ 301 33,128

31 Clint Barry, Capital................. 301 7,000Clint Barry, Withdrawals.... 302 7,000


Comprehensive Problem 8.1—Alpine Company (continued)GENERAL LEDGER

Cash Acct. No. 101


2011Apr.

30 Balance 50,247

May

31 R2 142,772

193,019

31 CD2

57,108 135,911



2011Apr.

30 Balance 4,725

May

2 G3 175 4,550

31 S2 31,150

35,700

31 CR2

17,500 18,200



2011Apr. 30 Balance 220,08

0May 3 G3 798 219,28

231 S2 18,690 200,59

231 P2 70,722 271,31

431 CR

275,162 196,15

231 CD 575 195,57


2 731 G3 4,577 191,00

0



2011Apr.

30 Balance 430

May

31 P2 363 793

31 G3 289 504



2011Apr.

30 Balance 2,447

May

4 P2 574 3,021

9 CR2

350 2,671

24 P2 630 3,30131 G3 669 2,632

Comprehensive Problem 8-1—Alpine Company (continued)Prepaid Insurance Acct. No.


e2011

Apr.

30 Balance 3,318

May

31 G3 553 2,765



2011


Apr.

30 Balance 22,470

May

10 P2 4,074 26,544

12 G3 854 25,690

Accumulated Amortization, Office Equipment Acct. No. 164


2011Apr.

30 Balance 9,898

May

31 G3 329 10,227



2011Apr.

30 Balance 38,920

Accumulated Amortization, Store Equipment Acct. No. 166


2011Apr.

30 Balance 17,556

May

31 G3 567 18,123



2011Apr.

30 Balance 7,098

May

3 G3 798 6,300

12 G3 854 5,44631 P2 76,363 81,80931 CD 28,75 53,059


2 0


Comprehensive Problem 8.1—Alpine Company (continued)Clint Barry, Capital Acct. No.


e2011

Apr.

30 Balance 308,085

May

31 G4 33,128 341,213

31 G4 7,000 334,213

Clint Barry, Withdrawals Acct. No. 302


2011May

29 CD2

7,000 7,000

31 G4 7,000 0

Sales Acct. No. 413


2011May

31 S2 31,150 31,150

31 CR2

125,272

156,422

31 G4 156,422

0



2011May

31 CR2

350 350

31 G4 350 0

Sales Returns and Allowances Acct. No. 415



2011May

2 G3 175 175

31 G4 175 0



2011May 31 S2 18,690 18,690

31 CR2

75,162 93,852

31 G3 4,577 98,42931 G4 98,429 0


Comprehensive Problem 8.1—Alpine Company (continued)Amortization Expense, Office Equipment Acct. No.


e2011

May

31 G3 329 329

31 G4 329 0

Amortization Expense, Store Equipment Acct. No. 613


2011May

31 G3 567 567

31 G4 567 0

Office Salaries Expense Acct. No. 620


2011May

15 CD2

3,150 3,150

30 CD2

3,150 6,300

31 G4 6,300 0



2011May

15 CD2

5,320 5,320

30 CD2

5,320 10,640

31 G4 10,640 0

Insurance Expense Acct. No. 637



2011May

31 G3 553 553

31 G4 553 0

Rent Expense, Office Space Acct. No. 641


2011May

1 CD2

742 742

31 G4 742 0

Rent Expense, Selling Space Acct. No. 642


2011May

1 CD2

2,968 2,968

31 G4 2,968 0Comprehensive Problem 8.1—Alpine Company (continued)

Office Supplies Expense Acct. No. 650


2011May

31 G3 289 289

31 G4 289 0

Store Supplies Expense Acct. No. 651


2011May

31 G3 669 669

31 G4 669 0




2011May

26 CD2

1,283 1,283

31 G4 1,283 0

Income Summary Acct. No. 901


2011May

31 G4 156,422

156,422

31 G4 123,294

33,128

31 G4 33,128

0


Deaver Corp.Date Explanation PR Debit Credit Balanc

e2011

May

26 S2 14,210

14,210

Essex CompanyDate Explanation PR Debit Credit Balanc

e2011

May

2 S2 6,100 6,100

11 CR2

6,100 0

16 S2 3,990 3,990


Comprehensive Problem 8.1—Alpine Company (continued)Nabors, Inc.


2011Apr.

28 S1 4,725 4,725

May

2 G3 175 4,550

5 CR2

4,550 0

Oscar ServicesDate Explanation PR Debit Credit Balanc

e2011

May

22 S2 6,850 6,850

30 CR2

6,850 0


Chandler Corp.Date Explanation PR Debit Credit Balanc

e2011

May

17 P2 13,650 13,650

23 CD2

13,650

0

Gale, Inc.Date Explanation PR Debit Credit Balanc

e2011

May

11 P2 8,800 8,800

19 CD2

8,800 0

Parkay ProductsDate Explanation PR Debit Credit Balanc

e2011


Apr.

29 P2 7,098 7,098

May

3 G3 798 6,300

8 CD2

6,300 0

25 P2 3,080 3,080

Thompson Supply Co.Date Explanation PR Debit Credit Balanc

e2011

May

4 P2 37,729 37,729

10 P2 4,074 41,80312 G3 854 40,94924 P2 9,030 49,979


Comprehensive Problem 8.1—Alpine Company (continued)

ALPINE COMPANYWork Sheet

For Month Ended May 31, 2011

Balance Sheet and

Income Statement of

Trial Balance

Adjustmen ts

Statement

Owner’s Equity

Debit Credit

Debit Credit

Debit Credit

Debit Credit

Cash........................... 135,911

135,911

Accounts receivable.... 18,200

18,200

Merchandise inventory 195,577

(f) 4,577

191,000

Office supplies............ 793 (c) 289

504

Store supplies............ 3,301 (b) 669

2,632

Prepaid insurance....... 3,318 (a) 553

2,765

Office equipment 25,690

25,690

Accumulated Amort., office equip.

9,898 (e) 329

10,227

Store equipment......... 38,920

38,920

Accumulated Amort., store equip.

17,556

(d) 567

18,123

Accounts payable....... 53,059

53,059

Clint Barry, Capital..... 308,085

308,085

Clint Barry, Withdrawals...............

7,000 7,000

Sales.......................... 156,422

156,422

Sales discounts........... 350 350Sales returns and 175 175


allowances.................Cost of goods sold...... 93,85

2(f) 4,577

98,429

Amort. expense, office equipment

(e) 329

329

Amort. expense, store equipment

(d) 567

567

Office salaries expense 6,300 6,300Sales salaries expense 10,64

010,64

0Insurance expense...... (a)

553553

Rent expense, office space.........................

742 742

Rent expense, selling space.........................

2,968 2,968

Office supplies expense ..................................

(c) 289

289

Store supplies expense (b) 669

669

Utilities expense......... 1,2 83

1,2 83

Totals...................... 545,020

545,020

6,984 6,984 123,294

156,422

422,622

389,494

Net income................. 33,1 28

33,1 28

Totals...................... 156,422

156,422

422,622

422,622


Comprehensive Problem 8.1—Alpine Company (continued)

ALPINE COMPANYIncome Statement


Revenue:Sales ......................................$156,422

Less:.............Sales discounts $ 350

Sales returns and allowances 175 525 Net sales ................................$155,897

Cost of goods sold....................... 98,429Gross profit on sales ................... $ 57,468Operating expenses:

Selling expenses:Sales salaries expense ......... $10,640Rent expense, selling space . 2,968Store supplies expense ........ 669Amortization expense, store equipment 567 Total selling expenses .......... $ 14,844

General and administrative expenses:Office salaries expense......... $6,300Utilities expense .................. 1,283Rent expense, office space . . . 742Insurance expense ............... 553Amortization expense, office equipment 329Office supplies expense ........ 289Total general and administrative expenses

9,496 Total operating expenses......... 24,340

Net income.................................. $ 33,128


Comprehensive Problem 8.1— Alpine Company (continued)

ALPINE COMPANYStatement of Owner’s Equity

For Month Ended May 31, 2011Clint Barry, Capital, April 30$308,085Add: Net income ........... 33,128 Total ............................$341,213Less: Withdrawals.......... 7,000 Clint Barry, Capital, May 31$334,213

ALPINE COMPANYBalance SheetMay 31, 2011


Accounts receivable....................... 18,200Merchandise inventory................... 191,000Office supplies .............................. 504Store supplies .............................. 2,632Prepaid insurance ......................... 2,765 Total current assets ......................$351,012

Property, plant and equipment:Office equipment........................$25,690

Less: Accumulated amortization 10,227 $15,463Store equipment........................$38,920

Less: Accumulated amortization 18,123 20,797Total property, plant and equipment 36,260

Total assets......................................$387,272


Accounts payable .......................... $ 53,059

Owner’s Equity Clint Barry, Capital ........................

334,213

Copyright © 2011 by McGraw-Hill Ryerson Limited. All rights reserved.881 Fundamental Accounting Principles, Eleventh Canadian Edition

Total liabilities and owner’s equity... .$387,272


Comprehensive Problem 8.1—Alpine Company (concluded)

ALPINE COMPANYPost-Closing Trial Balance

May 31, 2011Account Debit Credit

Cash............................................$135,911Accounts receivable...................... 18,200Merchandise inventory.................. 191,000Office supplies.............................. 504Store supplies.............................. 2,632Prepaid insurance......................... 2,765Office equipment.......................... 25,690Accumulated amortization, office equipment....................................................$ 10,227Store equipment........................... 38,920Accumulated amortization, store equipment .................................................... 18,123Accounts payable ......................... 53,059Clint Barry, Capital....................... ...................................... 334,213 Totals..........................................$415,622......................................$415,622

ALPINE COMPANYSchedule of Accounts Receivable

May 31, 2011

Deaver Corp...................... $14,210Essex Company ................ 3,990 Total accounts receivable. . $18,200

ALPINE COMPANYSchedule of Accounts Payable

May 31, 2011

Parkay Products ............... $ 3,080Thompson Supply Co. ....... 49,979 Total accounts payable ..... $53,059


*Comprehensive Problem 8.2—Alpine Company (150 minutes)SALES JOURNAL Page 2

Invoice

A/R Dr.


PR Sales Cr.

2011May

2 Essex Company 8785 6,100

16 Essex Company 8786 3,990

22 Oscar Services 8787 6,850

26 Deaver Corp. 8788 14, 210

31 31, 150

(106/413)



May

5 Nabors, Inc.

Sale of Apr. 28 4,459 91 4,550

9 Store Supplies

Sold store supplies

125

350 350

11

Essex Company

Sale of May 2 5,978 122 6,100

15


59,220

59,220

3 Oscar Sale of May 22 6,713 137 6,850


cGraw

-Hill Ryerson Lim




0 Services31


66,05

2

66,05 2

31

Totals 142,772

350 17,500

125,272

350

(101) (414) (106) (413) ( X )


*Comprehensive Problem 8.2—Alpine Company (continued)

PURCHASES JOURNAL Page 2Account

sOffice Other

Date of

Payable Purchases

Supplies

Accounts



2011May


May 04

n/10 eom

125/ 37,729 37,072 83 574

10 Off. Equip./Thompson Supp.

May 10

n/10 eom

163/ 4,074 4,074

11 Gale, Inc. May 10

2/10, n/30

8,800 8,800

17 Chandler Corp. May 14

2/10, n/60

13,650 13,650


May 24

n/10 eom

125/ 9,030 8,120 280 630

25 Parkay Products May 23

2/10, n/30

3,080 3,080

31 Totals 76,363 70,722 363 5,278 (201

) (505) (12

4) (X)


seOther Accts.

Ch. Cash Discount

Accts. Payable


Ma 1 341 S&M Mgmt. Rent Expense, 642 2,968


cGraw

-Hill Ryerson Lim



y 0 Co. Selling SpaceRent Expense, Office Space

641 3,710 742

8 3411

Parkay Products

Parkay Products 6,174 126 6,300

15

3412


621 5,320


620 8,470 3,150

19

3413

Gale, Inc. Gale, Inc. 8,624 176 8,800

23

3414

Chandler Corp.

Chandler Corp. 13,377

273 13,650

26

3415

Trinity Power

Utilities Expense 690 1,283 1,283

29

3416

Clint Barry C. Barry, Withdrawal

302 7,000 7,000

30

3417


621 5,320


620 8,47 0

3,15 0

31

Totals 57,108

575 28,933

28,750

(101)

(119) ( X ) (201)

*Comprehensive Problem 8.2—Alpine Company (continued)GENERAL JOURNAL Page 3

Date Account Titles and Explanations PR Debit Credit2011May 2 Sales Returns and Allowances... 415 175

Accounts Receivable—Nabors, Inc. 106/175

3 Accounts Payable—Parkay Products 201/798

Purchase Returns and Allowances 507 798

12 Accounts Payable—Thompson Supply Co. 201/854

Office Equipment................. 163 854

Adjusting entries:

May31 Insurance Expense................... 637 553Prepaid Insurance................ 128 553

31 Store Supplies Expense............ 651 669Store Supplies..................... 125 669

31 Office Supplies Expense............ 650 289Office Supplies.................... 124 289

31 Amortization Expense, Store Equipment 613567

Accumulated Amort., Store Equipment 166567

31 Amortization Expense, Office Equipment 612329

Accumulated Amort., Office Equipment 164329


*Comprehensive Problem 8.2—Alpine Company (continued)Closing entries: Page 4

2011May31 Merchandise Inventory........... 119191,000

Sales..................................... 413156,422Purchase Discounts................ 506 575Purchase Returns and Allowances 507 798

Income Summary............... 901 348,795

31 Income Summary................... 901315,667Merchandise Inventory...... 119 220,080Sales Discounts................. 414 350Sales Returns and Allowances 415

175Purchases......................... 505 70,722Amort. Expense, Office Equipment 612

329Amort. Expense, Store Equipment 613

567Office Salaries Expense...... 620 6,300Sales Salaries Expense...... 621 10,640Insurance Expense............ 637 553Rent Expense, Office Space 641 742Rent Expense, Selling Space 642

2,968Office Supplies Expense..... 650 289Store Supplies Expense..... 651 669Utilities Expense............... 690 1,283

31 Income Summary................... 901 33,128Clint Barry, Capital............ 301 33,128

31 Clint Barry, Capital................. 301 7,000Clint Barry, Withdrawals.... 302 7,000


*Comprehensive Problem 8.2—Alpine Company (continued)GENERAL LEDGER

Cash Acct. No. 101


2011Apr.

30 Balance 50,247

May

31 R2 142,772

193,019

31 CD2

57,108 135,911



2011Apr.

30 Balance 4,725

May

2 G3 175 4,550

31 S2 31,150

35,700

31 CR2

17,500 18,200



2011Apr.

30 Balance 220,080

May

31 G4 220,080

31 G4 191,000

191,000




2011Apr.

30 Balance 430

May

31 P2 363 793

31 G3 289 504



2011Apr.

30 Balance 2,447

May

4 P2 574 3,021

9 CR2

350 2,671

24 P2 630 3,30131 G3 669 2,632


*Comprehensive Problem 8.2—Alpine Company (continued)Prepaid Insurance Acct. No.


e2011

Apr.

30 Balance 3,318

May

31 G3 553 2,765



2011Apr.

30 Balance 22,470

May

10 P2 4,074 26,544

12 G3 854 25,690

Accumulated Amortization, Office Equipment Acct. No. 164


2011Apr.

30 Balance 9,898

May

31 G3 329 10,227



2011Apr.

30 Balance 38,920

Accumulated Amortization, Store Equipment Acct. No. 166


2011


Apr.

30 Balance 17,556

May

31 G3 567 18,123



2011Apr.

30 Balance 7,098

May

3 G3 798 6,300

12 G3 854 5,44631 P2 76,363 81,80931 CD

228,75

053,059


*Comprehensive Problem 8.2—Alpine Company (continued)Clint Barry, Capital Acct. No. 301


2011Apr.

30 Balance 308,085

May

31 G4 33,128 341,213

31 G4 7,000 334,213

Clint Barry, Withdrawals Acct. No. 302Date Explanation PR Debit Credit Balanc

e2011

May

29 CD2

7,000 7,000

31 G4 7,000 0


e2011

May

31 S2 31,150 31,150

31 CR2

125,272

156,422

31 G4 156,422

0


e2011

May

31 CR2

350 350

31 G4 350 0

Sales Returns and Allowances Acct. No. 415Date Explanation PR Debit Credit Balanc

e2011

May

2 G3 175 175


31 G4 175 0

Purchases Acct. No. 505Date Explanation PR Debit Credit Balanc

e2011

May 31 P2 70,722 70,72231 G4 70,722 0


*Comprehensive Problem 8.2—Alpine Company (continued)Purchase Discounts Acct. No.


e2011

May 31 CD2

575 575

31 G4 575 0

Purchase Returns and Allowances Acct. No. 507


2011May 3 CD

2798 798

31 G4 798 0

Amortization Expense, Office Equipment Acct. No. 612


2011May

31 G3 329 329

31 G4 329 0

Amortization Expense, Store Equipment Acct. No. 613


2011May

31 G3 567 567

31 G4 567 0

Office Salaries Expense Acct. No. 620


2011May

15 CD2

3,150 3,150

30 CD 3,150 6,300Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 896

231 G4 6,300 0



2011May

15 CD2

5,320 5,320

30 CD2

5,320 10,640

31 G4 10,640 0

Insurance Expense Acct. No. 637


2011May

31 G3 553 553

31 G4 553 0

*Comprehensive Problem 8.2—Alpine Company (continued)Rent Expense, Office Space Acct. No.


e2011

May

1 CD2

742 742

31 G4 742 0

Rent Expense, Selling Space Acct. No. 642


2011May

1 CD2

2,968 2,968

31 G4 2,968 0

Office Supplies Expense Acct. No. 650



2011May

31 G3 289 289

31 G4 289 0

Store Supplies Expense Acct. No. 651


2011May

31 G3 669 669

31 G4 669 0



2011May

26 CD2

1,283 1,283

31 G4 1,283 0

Income Summary Acct. No. 901


2011May

31 G4 348,795

348,795

31 G4 315,667

33,128

31 G4 33,128

0


*Comprehensive Problem 8.2—Alpine Company (continued)ACCOUNTS RECEIVABLE SUBLEDGER

Deaver Corp.Date Explanation PR Debit Credit Balanc

e2011

May

26 S2 14,210

14,210

Essex CompanyDate Explanation PR Debit Credit Balanc

e2011

May

2 S2 6,100 6,100

11 CR2

6,100 0

16 S2 3,990 3,990

Nabors, Inc.Date Explanation PR Debit Credit Balanc

e2011

Apr.

28 S2 4,725 4,725

May

2 G3 175 4,550

5 CR2

4,550 0

Oscar ServicesDate Explanation PR Debit Credit Balanc

e2011

May

22 S2 6,850 6,850

30 CR2

6,850 0


*Comprehensive Problem 8.2—Alpine Company (continued)ACCOUNTS PAYABLE SUBLEDGER

Chandler Corp.Date Explanation PR Debit Credit Balanc

e2011

May

17 P2 13,650 13,650

23 CD2

13,650

0

Gale, Inc.Date Explanation PR Debit Credit Balanc

e2011

May

11 P2 8,800 8,800

19 CD2

8,800 0

Parkay ProductsDate Explanation PR Debit Credit Balanc

e2011

Apr.

29 P2 7,098 7,098

May

3 G3 798 6,300

8 CD2

6,300 0

25 P2 3,080 3,080

Thompson Supply Co.Date Explanation PR Debit Credit Balanc

e2011

May

4 P2 37,729 37,729

10 P2 4,074 41,80312 G3 854 40,94924 P2 9,030 49,979


*Comprehensive Problem 8.2—Alpine Company (continued)ALPINE COMPANY

Work SheetFor Month Ended May 31, 2011

Balance Sheet and

Income Statement of

Trial Balance

Adjustmen ts

Statement

Owner’s Equity

Debit Credit

Debit Credit

Debit Credit

Debit Credit

Cash............................ 135,911

135,911

Accounts receivable..... 18,200

18,200

Merchandise inventory. 220,080

220,080

191,000

191,000

Office supplies............. 793 (c) 289

504

Store supplies.............. 3,301 (b) 669

2,632

Prepaid insurance........ 3,318 (a) 553

2,765

Office equipment.......... 25,690

25,690

Accumulated Amort., office equip.

9,898 (e) 329

10,227

Store equipment.......... 38,920

38,920

Accumulated Amort., store equip.

17,556

(d) 567

18,123

Accounts payable......... 53,059

53,059

Clint Barry, Capital....... 308,085

308,085

Clint Barry, Withdrawals................

7,000 7,000

Sales........................... 156,422

156,422

Sales discounts............ 350 350Sales returns and allowances...................

175 175

Purchases.................... 70,72 70,72


2 2Purchase discounts...... 575 575Purchase returns and allowances...................

798 798

Amort. expense, office equipment...................

(e) 329

329

Amort. expense, store equipment...................

(d) 567

567

Office salaries expense. 6,300 6,300Sales salaries expense. 10,64

010,64

0Insurance expense....... (a)

553553

Rent expense, office space..........................

742 742

Rent expense, selling space..........................

2,968 2,968

Office supplies expense ...................................

(c) 289

289

Store supplies expense (b) 669

669

Utilities expense.......... 1,2 83

1,2 83

Totals....................... 546,393

546,393

2,407 2,407 315,667

348,795

422,622

389,494

Net income.................. 33,1 28

33,1 28

Totals....................... 348,795

348,795

422,622

422,622



ALPINE COMPANYIncome Statement


Revenue:Sales ......................................$156,422

Less: Sales discounts........... $ 350Sales returns and allowances 175

525 Net sales ................................$155,897

Cost of goods sold:Merchandise inventory, April 30 220,080Purchases................................ $70,722

Less: ......Purchase discounts $575Purchase returns and allowances 798 1,373

Cost of goods purchased.......... 69,349 Goods available for sale........... $289,429Merchandise inventory, May 31. 191,000 Cost of goods sold.................... 98,429

Gross profit on sales ................... $ 57,468Operating expenses:

Selling expenses:Sales salaries expense ......... $10,640Rent expense, selling space . 2,968Store supplies expense ........ 669Amortization expense, store equipment 567 Total selling expenses .......... $ 14,844

General and administrative expenses:Office salaries expense......... $6,300Utilities expense .................. 1,283Rent expense, office space . . . 742Insurance expense ............... 553Amortization expense, office equipment 329Office supplies expense ........ 289Total general and administrative expenses

9,496 Total operating expenses......... 24,340

Net income.................................. $ 33,128Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.903 Fundamental Accounting Principles, Twelfth Canadian Edition


ALPINE COMPANYStatement of Owner’s Equity

For Month Ended May 31, 2011Clint Barry, Capital, April 30.$308,085Add: Net income ........... 33,128 Total ............................$341,213Less: Withdrawals.......... 7,000 Clint Barry, Capital, May 31$334,213

ALPINE COMPANYBalance SheetMay 31, 2011


Accounts receivable....................... 18,200Merchandise inventory................... 191,000Office supplies .............................. 504Store supplies .............................. 2,632Prepaid insurance ......................... 2,765 Total current assets ......................$351,012

Property, plant and equipment:Office equipment...........................$25,690

Less: Accumulated amortization . 10,227$ 15,463Store equipment............................$38,920

Less: Accumulated amortization . 18,123 20,797Total property, plant and equipment 36,260

Total assets....................................$387,272


Accounts payable ...................... $ 53,059

Owner’s Equity Clint Barry, Capital .........................

334,213


Total liabilities and owner’s equity... .$387,272


*Comprehensive Problem 8.2—Alpine Company (concluded)

ALPINE COMPANYPost-Closing Trial Balance

May 31, 2011Account Debit Credit

Cash............................................$135,911Accounts receivable...................... 18,200Merchandise inventory.................. 191,000Office supplies.............................. 504Store supplies.............................. 2,632Prepaid insurance......................... 2,765Office equipment.......................... 25,690Accumulated amortization, office equipment....................................................$ 10,227Store equipment........................... 38,920Accumulated amortization, store equipment .................................................... 18,123Accounts payable ......................... 53,059Clint Barry, Capital....................... ...................................... 334,213 Totals..........................................$415,622......................................$415,622

ALPINE COMPANYSchedule of Accounts Receivable

May 31, 2011

Deaver Corp...................... $14,210Essex Company ................ 3,990 Total accounts receivable. . $18,200

ALPINE COMPANYSchedule of Accounts Payable

May 31, 2011

Parkay Products ............... $ 3,080Thompson Supply Co. ....... 49,979 Total accounts payable...... $53,059


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