Question

Incredible Sounds is a wholesale business that sells musical instruments. Transactions involving sales and cash receipts for the firm during April 2019 follow. The firm sells its merchandise for cash and on open account. During April, Incredible Sounds engaged in the following transactions:

DATE		TRANSACTIONS
2019
April	1	Sold merchandise for $3,100 to Alto Music Center; issued Invoice 3912 with terms of 3/10, n/30.
	3	Received a check for $1,261 from Music Supply Store in payment of Invoice 2718 of March 25 ($1,300), less cash discount ($39).
	5	Sold merchandise totaling $1,375 in cash to a new customer who has not yet established credit.
	7	Merchandise of $70 sold on April 5 is returned for a cash refund.
	8	Sold merchandise for $5,100 to Music Warehouse, issued Invoice 3913 with terms of 3/10, n/30.
	10	Received payment from Alto Music Center in payment of Invoice 3912, less cash discount.
	15	Accepted a return of damaged merchandise from Music Warehouse; issued Credit Memorandum 105 for $1,600. The original sale was made on Invoice 3913 on April 8.
	17	Received payment from Music Warehouse for the sale of April 8, less the return on April 15; Music Warehouse deducted the appropriate cash discount from its payment.
	19	Received a check for $1,600 as payment in full from Oldies Sounds for Invoice 3850 dated March 20.
	20	Sold merchandise for $9,800 to Hawk Music Center; issued Invoice 3914 with terms of 3/10, n/30.
	25	Sold merchandise for $9,400 to Modern Sounds; issued Invoice 3915 with terms of 2/10, n/30.
	26	Sold merchandise for $7,200 to Country Tunes; issued Invoice 3916 with terms of 2/10, n/30.
	27	Accepted a return of damaged merchandise from Modern Sounds; issued Credit Memorandum 106 for $360. The original sale was made on Invoice 3915 on April 25.
	29	Received payment from Hawk Music Center for the sale of April 20, less cash discount.
	30	Sold merchandise for $1,800 to Oldies Sounds; issued Invoice 3917 with terms of 2/10, n/30.

Required:

2. Post the above transactions to the appropriate accounts in the general ledger and in the accounts receivable ledger.
3. Prepare a schedule of accounts receivable.

GENERAL LEDGER ACCOUNTS
101	Cash, $26,000 Dr.	451	Sales Returns and Allowances
111	Accounts Receivable, $2,900 Dr.	452	Sales Discounts
401	Sales

ACCOUNTS RECEIVABLE LEDGER ACCOUNTS
	Alto Music Center		Music Supply Store	$	1,300
	Country Tunes		Music Warehouse
	Hawk Music Center		Oldies Sounds	$	1,600
	Modern Sounds

Analyze:
What were the total sales on account in April, prior to any returns, allowances, or discounts?

Answer 1

2.

Cash
Beg. bal.	26,000	April 7	70
April 3	1,261
April 5	1,375
April 10	3,007
April 17	3,395
April 19	1,600
April 29	9,506
Accounts Receivable
Beg. bal.	2,900	April 3	1,300
April 1	3,100	April 10	3,100
April 8	5,100	April 15	1,600
April 20	9,800	April 17	3,500
April 25	9,400	April 19	1,600
April 26	7,200	April 27	360
April 30	1,800	April 29	9,800
Bal.	18,040
Sales Returns and Allowances
April 7	70
April 15	1,600
April 27	360
Bal.	2,030
Sales Discounts
April 3	39
April 10	93
April 17	105
April 29	294
Bal.	531
Alto Music Center
Date	Ref. No.	Debit	Credit	Balance
April 1	3912	$ 3,100
April 10			3,100
Bal., April 30				0
Country Tunes
Date	Ref. No.	Debit	Credit	Balance
April 26	3,916	7,200
Bal, April 30				7,200
Hawk Music Center
Date	Ref. No.	Debit	Credit	Balance
April 20	3914	9,800
April 29			9,800
Bal. , April 30				0
Modern Sounds
Date	Ref. No.	Debit	Credit	Balance
April 25	3915	9,400
April 27	106		360
Bal., April 30				9,040
Music Supply Store
Date	Ref. No.	Debit	Credit	Balance
Bal. April 1				1,300
April 3			1,300
Bal., April 30				0
Music Warehouse
Date	Ref. No.	Debit	Credit	Balance
April 8	Inv. 3913	5,100
April 15	Cr. Memo 105		1,600
April 17			3,500
Bal., April 30				0
Oldies Sounds
Date	Ref. No.	Debit	Credit	Balance
Bal. April 1				1,600
April 19			1,600
April 30	3917	1,800
Bal., April 30				1,800

3.

Schedule of Accounts Receivable April 30, 2019
Country Tunes	$ 7,200
Modern Sounds	9,040
Oldies Sounds	1,800
Total	$ 18,040

Total sales on account in April : $ 36,400