Question

Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 2/10, n/30).

Mar.		1				Purchased $38,000 of merchandise from Van Industries, invoice dated March 1, terms 2/15, n/30.
		2				Sold merchandise on credit to Min Cho, Invoice No. 854, for $15,200 (cost is $7,600).
		3		(a)		Purchased $1,140 of office supplies on credit from Gabel Company, invoice dated March 3, terms n/10 EOM.
		3		(b)		Sold merchandise on credit to Linda Witt, Invoice No. 855, for $7,600 (cost is $3,800).
		6				Borrowed $72,000 cash from Federal Bank by signing a long-term note payable.
		9				Purchased $19,000 of office equipment on credit from Spell Supply, invoice dated March 9, terms n/10 EOM.
		10				Sold merchandise on credit to Jovita Albany, Invoice No. 856, for $3,800 (cost is $1,900).
		12				Received payment from Min Cho for the March 2 sale less the discount.
		13		(a)		Sent Van Industries Check No. 416 in payment of the March 1 invoice less the discount.
		13		(b)		Received payment from Linda Witt for the March 3 sale less the discount.
		14				Purchased $28,000 of merchandise from the CD Company, invoice dated March 13, terms 2/10, n/30.
		15		(a)		Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first half of the month, $15,600. Cashed the check and paid the employees.
		15		(b)		Cash sales for the first half of the month are $60,800 (cost is $48,640). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.)
		16				Purchased $1,660 of store supplies on credit from Gabel Company, invoice dated March 16, terms n/10 EOM.
		17				Received a $2,800 credit memorandum from CD Company for the return of unsatisfactory merchandise purchased on March 14.
		19				Received a $570 credit memorandum from Spell Supply for office equipment received on March 9 and returned for credit.
		20				Received payment from Jovita Albany for the sale of March 10 less the discount.
		23				Issued Check No. 418 to CD Company in payment of the invoice of March 13 less the March 17 return and the discount.
		27				Sold merchandise on credit to Jovita Albany, Invoice No. 857, for $11,400 (cost is $4,560).
		28				Sold merchandise on credit to Linda Witt, Invoice No. 858, for $4,560 (cost is $1,824).
		31		(a)		Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the month, $15,600. Cashed the check and paid the employees.
		31		(b)		Cash sales for the last half of the month are $66,880 (cost is $40,128).
		31		(c)		Verify that amounts impacting customer and creditor accounts were posted and that any amounts that should have been posted as individual amounts to the general ledger accounts were posted. Foot and crossfoot the journals and make the month-end postings.

Assume the following ledger account amounts Inventory (March 1 beg. bal. is $63,000), Z. Church, Capital (March 1 beg. bal. is $63,000) and Church Company uses the perpetual inventory system.

Required:
2-a. Enter the transactions in a sales journal.
2-b. Enter the transactions in a purchases journal.
2-c. Enter the transactions in a cash receipts journal.
2-d. Enter the transactions in a cash disbursements journal.
2-e. Enter the transactions in a general journal.

Answer 1

			Church Company
2a)			Sales Journal
	Date	Account Debited	Inv.No.	DR(Accounts Receivable) CR(Sales Revenue)
	02-Mar	Min Cho	854	$     15,200.00
	03-Mar	Linda Witt	855	$        7,600.00
	10-Mar	Jovita Albany	856	$        3,800.00
	27-Mar	Jovita Albany	857	$     11,400.00
	28-Mar	Linda Witt	858	$        4,560.00
	31-Mar	Total		$     42,560.00
2b)		Church Company
		Purchases Journal
	Date	Account	Inv.date	Terms	Accounts Payable Credit	Inventory Debit	Office Supplies Debit	Other Accounts Debit
	01-Mar	Van Industries	01-Mar	2/15,n/30	$      38,000.00	$      38,000.00
	03-Mar	Gabel Company	03-Mar	n/10,EOM	$        1,140.00		$        1,140.00
	09-Mar	Spell Supply	09-Mar	n/10,EOM	$      19,000.00			$ 19,000.00
	14-Mar	CD Company	13-Mar	2/10,n/30	$      28,000.00	$      28,000.00
	16-Mar	Gabel Company	16-Mar	n/10,EOM	$        1,600.00			$   1,600.00
	31-Mar	Total			$      87,740.00	$      66,000.00	$        1,140.00	$ 20,600.00
2c )				Church Company
				Cash Receipts Journal
	Date	Account Cr.	Explaination	Cash Debit	Sales Discount Dr.	Accounts Receivable Credit	Sales Cr.	Other Accounts Credit
	06-Mar	Long Term Note Payable	Federal Bank	$     72,000.00				$ 72,000.00
	12-Mar	Min Cho	2nd March Invoice	$     14,896.00	$            304.00	$      15,200.00
	13-Mar	Linda Witt	3rd March Invoice	$        7,448.00	$            152.00	$         7,600.00
	15-Mar	Sales	Cash Sales	$     60,800.00			$      60,800.00
	20-Mar	Jovita Albany	10th March Invoice	$        3,724.00	$              76.00	$         3,800.00
	31-Mar	Sales	Cash Sales	$     66,800.00			$      66,800.00
	31-Mar	Totals		$ 2,25,668.00	$            532.00	$      26,600.00	$   1,27,600.00	$ 72,000.00
				Church Company
2d)				Cash Disbursement Journal
	Date	Check No.	Payee	Account Debited	Cash Credit	Merchandise (Cr)	Other Accounts Debit	Accounts Payable Debit
	13-Mar	416	Van Industries	Van Industries	$      37,240.00	$            760.00		$ 38,000.00
	15-Mar	417	Payroll	Sales Salaries Expense	$      15,600.00		$      15,600.00
	23-Mar	418	CD Co.	CD Company	$      24,696.00	$         3,304.00		$ 28,000.00
	31-Mar	419	Payroll	Sales Salaries Expense	$      15,600.00		$      15,600.00
	31-Mar		Total		$      93,136.00	$         4,064.00	$      31,200.00	$ 66,000.00
2e)		Church Company
	Date	General,Journal	Debit	Credit
	17-Mar	Accounts Payable-CD Company	$             2,800.00
		To Purchases Return and Allowances		$        2,800.00
		(Credit Memo for Return)
	19-Mar	Accounts Payable-Spell Company	$                570.00
		To Office equipment		$           570.00
		(Credit Memo for Return of Equipment to Spell Supply)