Question

Problem 7-1A Special journals, subsidiary ledgers, trial balance-perpetual LO C3, P1, P2

[The following information applies to the questions displayed below.]

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 $39,000 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 $15,600 (cost is $7,800).
		3		(a)		Purchased $1,170 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 $7,800 (cost is $3,900).
		6				Borrowed $72,000 cash from Federal Bank by signing a long-term note payable.
		9				Purchased $19,500 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 $3,900 (cost is $1,950).
		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 $32,000 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, $16,400. Cashed the check and paid the employees.
		15		(b)		Cash sales for the first half of the month are $62,400 (cost is $49,920). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.)
		16				Purchased $1,690 of store supplies on credit from Gabel Company, invoice dated March 16, terms n/10 EOM.
		17				Received a $3,200 credit memorandum from CD Company for the return of unsatisfactory merchandise purchased on March 14.
		19				Received a $585 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 $11,700 (cost is $4,680).
		28				Sold merchandise on credit to Linda Witt, Invoice No. 858, for $4,680 (cost is $1,872).
		31		(a)		Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the month, $16,400. Cashed the check and paid the employees.
		31		(b)		Cash sales for the last half of the month are $68,640 (cost is $41,184).
		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 $61,000), Z. Church, Capital (March 1 beg. bal. is $61,000) and Church Company uses the perpetual inventory system.

Problem 7-1A Part 2

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

2-a.

SALES JOURNAL
Date	Account Debited	Invoice Number	Accounts Receivable Dr. Sales Cr.	Cost of Goods Sold Dr. Inventory Cr.
Mar. 2	Min Cho	854	15600	7800
Mar. 3	Linda Witt	855	7800	3900
Mar. 10	Jovita Albany	856	3900	1950
Mar. 27	Jovita Albany	857	11700	4680
Mar. 28	Linda Witt	858	4680	1872
Mar. 31	Totals		43680	20202

2-b.

PURCHASES JOURNAL
Date	Account	Date of Invoice	Terms	Accounts Payable Cr.	Inventory Dr.	Office Supplies Dr.	Other Accounts Dr.
Mar. 1	Van Industries	Mar. 1	2/15, n/30	39000	39000
Mar. 3	Gabel Company	Mar. 3	n/10 EOM	1170		1170
Mar. 9	Spell Supply	Mar. 9	n/10 EOM	19500			19500
Mar. 14	CD Company	Mar. 13	2/10, n/30	32000	32000
Mar. 16	Gabel Company	Mar. 16	n/10 EOM	1690			1690
Mar. 31	Totals			93360	71000	1170	21190

2-c.

CASH RECEIPTS JOURNAL
Date	Account Credited	Cash Dr.	Sales Discount Dr.	Accounts Receivable Cr.	Sales Cr.	Other Accounts Cr.	Cost of Goods Sold Dr. Inventory Cr.
Mar. 6	Note payable	72000				72000
Mar. 12	Min Cho	15288	312	15600
Mar. 13	Linda Witt	7644	156	7800
Mar. 15	Sales	62400			62400		49920
Mar. 20	Jovita Albany	3822	78	3900
Mar. 31	Sales	68640			68640		41184
Mar. 31	Totals	229794	546	27300	131040	72000	91104

2-d.

CASH DISBURSEMENTS JOURNAL
Date	Ck. No.	Payee	Account Debited	Cash Cr.	Inventory Cr.	Other Accounts Dr.	Accounts Payable Dr.
Mar. 13	416	Van Industries	Accounts payable	38220	780		39000
Mar. 15	417	Payroll	Sales salaries expense	16400		16400
Mar. 23	418	CD Company	Accounts payable	28224	576		28800
Mar. 31	419	Payroll	Sales salaries expense	16400		16400
Mar. 31		Totals		99244	1356	32800	67800

2-e.

Date	General Journal	Debit	Credit
Mar. 17	Accounts payable	3200
	Inventory		3200
	(To record credit memo for purchase returns)
Mar. 19	Accounts payable	585
	Office equipment		585
	(To record credit memo for equipment returned)