Question

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Bradshaw Company has a balance in its Accounts Receivable control account of $13,500 on January 1,...

Bradshaw Company has a balance in its Accounts Receivable control account of $13,500 on January 1, 2019. The subsidiary ledger contains three accounts: Brown Company, balance $6,000; Smith Company, balance $2,500 and Coco's Company. During January, the following receivable-related transactions occurred.

Credit Sales Collections Returns

Brown Company $15,000 $6,000 $ -0-

Smith Company $9,000 $4,500 $1,000

Coco's Company $8,500 $6,500 $-0-

Instructions:

(a) What is the January 1, 2019 balance in the Coco's Company subsidiary account?

(b) What is the January 31, 2019 balance in the control account?

(c) Compute the balances in the subsidiary accounts at the end of the month.

(d) Which January transaction would not be recorded in a special journal?

Solutions

Expert Solution

A) Account Receivable control account is nothing but the total of all subsidiaries balances , as the total opening date balance of company Bradshaw , and other two subsidiary is given, by substracting it from Company Balance you will get Balance of Coco Company $5000

B) Formulae for Closing balance of Control account is

Opening balance (Jan 1 balance ) + All Subsidiaries Credit Sales - All Subsi Collection - All Sales Return

C) Same Formulae as above but calculate for individual subsi taking individual opening figure

D) Sales Return as is is directly net off with sales and hence Special journal entry not necessary

(Refer Images )

ekkarill92 answered 1 year ago
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