Question

Vendor Name Terms Date Invoice # Amount

Bridgestone Tire Net 40 Nov. 16 ??BT-329 $1,356

Snowmaster Tire 2% 15, Net 45 Nov. 27 ??ST-924 3,164

Michelin Tire 1% 25, Net 60 Nov. 28 ??MT-736 2,260

Total $6,780

Accounts Receivable Sub-Ledger @ 11/30/2019 (Inc. HST)

Customer Name Terms Date Invoice # Amount

John Bear 1% 25, Net 45 Nov. 21 ??198 $3,390

Molly Maid 1% 25, Net 45 Nov. 26 ??199 3,955

Lovely Homes 1% 25, Net 45 Nov. 29 ??200 3,616

Total $10,961

December 1-9, 2019 Transactions

When entering cheque numbers for payments, uncheck the Print Check box (Exercise 14-1) and enter the cheque numbers manually.

Do journal entires

Dec 1: Complete Tire repurchased and cancelled 15,000 of its common shares @ $1.25 per share. All 100,000 common shares outstanding prior to this transaction were issued on Jan. 1, 2018, when the company commenced operations. There have been no other common share transactions since Jan. 1, 2018 (cheque 300). There is no HST paid on this transaction. Payment is made to Complete Tire’s broker, TD bank. Use Misc. Payment – do not set up a vendor.

Dec 1: Received cheque #724 from Lovely Homes in full payment of invoice ??200, net of the available discount.

Dec 2: Paid Michelin Tire invoice ??MT-736 (cheque 301), net of the available discount.

Dec 6: Sold 4 winter tires to Your Name (you are the customer – enter your first and last name),

invoice ??201, $700 plus HST. You paid by personal cheque #37. Enter this transaction as a

Misc. Receipt – do not set up a new customer. Note: there are no sales discounts on cash sales.

Dec 7: Sold 12 winter tires for $200 each to Lorie Lynn on account (1% 25 Net 45), invoice ??202, $2,400
plus HST.

Dec 8: Purchased 4 winter tires for $600 plus HST from Dundas Automotive, invoice ??DA1018. Purchase terms are 3% 20, Net 60.

Dec 8: Received cheque #384 from Molly Maid in full payment of invoice ??199, net of the available discount.

Answer 1

Journal Entries

Date	Account Title	Folio no.	Debit	Credit
Dec 1	Misc. Payment		18750
	Cash			18750
	As the payment was made to TD Bank(Broker)(15000*$1.25) and in the question it is mentioned to show it under Misc payment so Misc payment is been debited.
Dec 1	Common Stock		18750
	Misc Payment			18750
	As the common stock is repurchased and cancelled so the account has been debited.
"	Bank		3579.84
	Lovely Homes			3579.84
	As Lovely homes has paid with in 10 days it will be given a discont of 1% so the net amount receivable is 3579.84(3616-1%)
Dec 2	Michelin Tire		2237.4
	Bank			2237.4
	Assuming that Michelin Tire is paid via cheque and as the amount is paid with in 25 days so a discount of 1% will be given by the vendor. Amount Payable - 2237.4(2260-1%).
Dec 6	Misc Receipt		700+HST
	Sales			700+HST
	Sale of 4 winter Tire made to a customer but as the question suggest not to create seperate Customer name so been debited to Misc Receipt.
"	Bank		700+HST
	Misc Receipt			700+HST
	The customer has paid the amount in full via Cheque No #37.
Dec 7	Lorie Lynn		2400
	Sales			2400
	Sales of 12 winter tyre made to Lorie Lynn at $200 each.
Dec 8	Purchases		600+HST
	Dundas Automotive			600+HST
	4 winter tyre purchased from Dundas Automotive at 600+HST.
"	Bank		3915.45
	Molly Maid			3915.45
	As the amount is received with in 25 days so a discount of 1% will be given. Amount - 3915.45(3955-1%).

Explanations is given below each entry. Incase of further doubts feel free to ask.