Question

In: Accounting

Lewis Company's chart of accounts includes the following selected accounts. 101 Cash 401 Sales 112 Accounts...

Lewis Company's chart of accounts includes the following selected accounts.

101

Cash

 401 Sales
112

Accounts Receivable

 414 Discount Allowed
120

Inventory

 505 Cost of Sales
301 J. Lewis, Capital

On 1 June the accounts receivable ledger of Lewis Company showed the following balances: Bernard & Son $3 500, Festa Company $1 900, Grima Bros. $1 600, and Massis Company $1 300. The June transactions involving the receipt of cash were as follows.

June 1 The owner, J. Lewis, invested additional cash in the business $10 000.
3 Received cheque in full from Massis Company less 2% cash discount.
6 Received cheque in full from Festa Company less 2% cash discount.
7 Made cash sales of inventory totalling $6 135. The cost of the inventory sold was $4 090.
9 Received cheque in full from Bernard & Son less 2% cash discount.
11 Received cash refund from a supplier for damaged merchandise $320.
15 Made cash sales of inventory totalling $4 800. The cost of the inventory sold was $3 200.
20 Received cheque in full from Grima Bros. $1 600.



Instructions
(a) Journalise the transactions above in a six-column cash receipts journal with columns for Cash Dr., Discounts Allowed Dr., Accounts Receivable Cr., Sales Cr., Other Accounts Cr., and Cost of Sales Dr./Inventory Cr. Foot and crossfoot the journal.

(b) Insert the beginning balances in the Accounts Receivable control and subsidiary accounts, and post the June transactions to these accounts.

Solutions

Expert Solution

(a) Journalise the transactions above in a six-column cash receipts journal with columns for Cash Dr., Discounts Allowed Dr., Accounts Receivable Cr., Sales Cr., Other Accounts Cr., and Cost of Sales Dr./Inventory Cr. Foot and crossfoot the journal.

Date

Account Credited

Cash Dr

Discounts Allowed Dr

Accounts Receivables Cr.

Sales Cr.

Other Accounts Cr.

Cost of Sales Dr/Inventory Cr.

Jun-01

Owner's capital

10000

10000

Jun-03

Massis Company

1274

26

1300

Jun-06

Festa Company

1862

38

1900

Jun-07

Sales

6135

6135

4090

Jun-09

Bernard & Son

3430

70

3500

Jun-11

Inventory

320

320

Jun-15

Sales

4800

4800

3200

Jun-20

Grima Bros.

1600

1600

29421

134

8300

10935

10320

7290

101

414

112

401

X

505/120

b)  Insert the beginning balances in the Accounts Receivable control and subsidiary accounts, and post the June transactions to these accounts.

Answer)

Accounts Receivable-subsidiary ledger
Massis
Date Explanation Debit Credit Balance
Jun-01 Balance 1300
Jun-03 1300
Accounts Receivable-subsidiary ledger
Festa Company
Date Explanation Debit Credit Balance
Jun-01 Balance 1900
Jun-06 1900
Accounts Receivable-subsidiary ledger
Bernard & Son
Date Explanation Debit Credit Balance
Jun-01 Balance 3500
Jun-09 3500
Accounts Receivable-subsidiary ledger
Grima Bros.
Date Explanation Debit Credit Balance
Jun-01 Balance 1600
Jun-20 1600

ekkarill92 answered 4 months ago
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