Question

Awesome Sounds is a wholesale business that sells musical instruments. Transactions involving sales and cash receipts for the firm during April 2016 follow, along with the general ledger accounts used to record these transactions.

GENERAL LEDGER ACCOUNTS

101	Cash	$	15,800	Dr.
109	Notes Receivable
111	Accounts Receivable		20,400	Dr.
401	Sales
451	Sales Returns and Allowances
452	Sales Discounts

DATE			TRANSACTIONS
April	1		Sold merchandise for $3,300 to Soprano Music Center; issued Invoice 9312 with terms of 2/10, n/30.
	3		Received a check for $2,254 from Music Supply Store in payment of Invoice 6718 of March 25 ($2,300), less a cash discount ($46).
	5		Sold merchandise for $1,425 in cash to a new customer who has not yet established credit.
	8		Sold merchandise for $3,900 to Music Warehouse, issued Invoice 9313 with terms of 2/10, n/30.
	10		Soprano Music Center sent a check for $3,234 in payment of Invoice 9312 of April 1 ($3,300), less a cash discount ($66).
	15		Accepted a return of damaged merchandise from Music Warehouse; issued Credit Memorandum 105 for $740; the original sale was made on Invoice 9313 of April 8.
	19		Sold merchandise for $9,900 to Eagleton Music Center; issued Invoice 9314 with terms of 2/10, n/30.
	23		Collected $2,825 from Sounds From Yesterday for Invoice 6725 of March 25.
	26		Accepted a two-month promissory note for $4,900 from Country Music Store in settlement of its overdue account; the note has an interest rate of 12 percent.
	28		Received a check for $9,702 from Eagleton Music Center in payment of Invoice 9314, dated April 19 ($9,900), less a cash discount ($198).
	30		Sold merchandise for $9,200 to Contemporary Sounds, Inc.; issued Invoice 9315 with terms of 2/10, n/30.

Required:

Open the general ledger accounts and enter the balances as of April 1, 2019.

Record the transactions in a sales journal, a cash receipts journal, and a general journal.

Post the entries from the general journal to the general ledger.

Total, prove, and rule the special journals as of April 30, 2019.

Post the column totals from the special journals to the proper general ledger accounts.

Prepare the heading and the Revenue section of the firm’s income statement for the month ended April 30.

Analyze:
What total sales on account were made in the month of April prior to any returns or allowances?

Answer 1

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Sales Journal
Date	Account Debited	Invoice no	Accounts Receivable Dr
			Sales cr
Apr 1	Soprano Music Centre	9,312	$                                3,300
Apr 8	Music Warehouse	9,313	$                                3,900
Apr 19	Eagleton Music Centre	9,314	$                                9,900
Apr 30	Contemporary Sound	9,315	$                                9,200
Total			$                              26,300	$                                      -
Cash Receipt Journal
Date	Account Credit	Cash Dr	Sales Discount Dr	Accounts Receivable Cr	Sales Cr
Apr 3	Soprano Music Centre	$               2,254	$                                     46	$                               2,300
Apr 5	Sale	$               1,425			$             1,425
Apr 10	Soprano Music Centre	$               3,234	$                                     66	$                               3,300
Apr 23	Yesterday Sound	$               2,825		$                               2,825
Apr 28	Eagleton Music Centre	$               9,702	$                                   198	$                               9,900
Total		$             19,440	$                                   310	$                             18,325	$             1,425	$                              -	$                                -
General Journal
Date	Account	Debit	Credit
Apr 15	Sales Return and Allowance	$                   740
	Accounts Recevable		$                                   740
Apr 26	Note Receivable	$               4,900
	Accounts Recevable		$                                4,900
	Income Statement Revenue Section:
	Sales Revenue		$                              27,725
	Less: Sales Return and Allowance		$                                  -740
	Net Sale after return		$                              26,985
	Less: Sales Discount		$                                  -310
	Net Sales		$                              26,675
	Analysis:
	On Account Sale		$                              26,300

Cash
Debit		Credit
Beginning	$       15,800
Apr 30	$       19,440
Accounts Receivable
Debit		Credit
Beginning	$       20,400	Apr 15	$            740
Apr 30	$       26,300	Apr 26	$         4,900
		Apr 30	$       18,325
Sales
Debit		Credit
		Apr 30	$       26,300
		Apr 30	$         1,425
Sales Discount
Debit		Credit
Apr 30	$            310
Sales Return and Allowance
Debit		Credit
Apr 15	$            740
Note Receivable
Debit		Credit
Apr 30	$         4,900