In: Accounting
Trout Swimming School uses a sales journal, purchases journal, cash receipts journal, cash payments journal and a general journal. The business also maintains subsidiary ledgers for accounts receivable and accounts payable, in addition to the related control accounts (ignore GST). The relevant account balances as of December 31, 2019 were as follows.
Account No. |
Account Title |
Account balance |
|
Debit |
Credit |
||
100 |
Cash at Bank |
$54,000 |
|
120 |
Accounts Receivable |
66,000 |
|
140 |
Inventory |
95,000 |
|
200 |
Equipment |
1,250,000 |
|
300 |
Accounts Payable |
$55,000 |
|
330 |
Bank Loan |
600,000 |
|
400 |
S. Salmon, Capital |
810,000 |
|
500 |
Sales |
- |
|
510 |
Sales Returns and Allowances |
- |
|
520 |
Discount Received |
- |
|
600 |
Purchases |
- |
|
610 |
Discount Allowed |
- |
|
$1,465,000 |
$1,465,000 |
The accounts receivable and accounts payable subsidiary ledger balances were as follows.
.
Accounts Receivable |
Accounts Payable |
||
M. Falzon |
$13,200 |
Nelligan Ltd |
$11,000 |
S. H. Guan |
8,800 |
Pellham & Co |
11,000 |
R. Jamal |
22,000 |
Yap United Ltd |
33,000 |
|
16,500 |
||
K. Mezzini |
5,500 |
||
66,000 |
$55,000 |
The following transactions occurred during the first quarter of 2020.
Jan 3 |
S. H. Guan took advantage of the 2% sales and paid off her account |
11 |
Sold a $10,000 item to K. Mezzine on account, invoice no. 401 |
15 |
Purchased $30,000 of inventory from Pellharm & Co on credit. Terms 2/10, n/30 |
18 |
Received $6,000 from M. Falzon on his account. No discount was allowed. |
20 |
Paid $11,000 to Pellham & Co on its previous account balance. No discount was taken. |
25 |
Paid $30,000 owing to Pellham & Co, taking advantage of the 2% discount. |
Feb 10 |
A cash sale of $20,000 was made to a new customer, E. Tsiros |
14 |
R. Jamal paid $11,000 on his account, outside the discount period |
23 |
Sold a $5,000 item to K. Mezzini on account, invoice no. 402 |
28 |
Paid $22,00 on the Yap United Ltd account. No discount was received. |
Mar 4 |
Purchased $40,000 in inventory from Nelligan Ltd on credit. Terms n/30. |
16 |
Sold a $500 item to A. Khalil on account, invoice 403 |
22 |
Paid $22,000 on the Nelligan Ltd account |
27 |
A $500 sales allowance was given to A. Khalil, due to a defective product. |
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