Question

Revenue and cash receipts journals; accounts receivable subsidiary and general ledgers

Transactions related to revenue and cash receipts completed by Crowne Business Services Co. during the period April 2–30 are as follows:

Apr. 2. Issued Invoice No. 793 to Ohr Co., $4,680.

Apr. 5. Received cash from Mendez Co. for the balance owed on its account.

Apr. 6. Issued Invoice No. 794 to Pinecrest Co., $1,990.

Apr. 13. Issued Invoice No. 795 to Shilo Co., $3,450.

Post revenue and collections to the accounts receivable subsidiary ledger.

Apr. 15. Received cash from Pinecrest Co. for the balance owed on April 1.

Apr. 16. Issued Invoice No. 796 to Pinecrest Co., $5,500.

Post revenue and collections to the accounts receivable subsidiary ledger.

Apr. 19. Received cash from Ohr Co. for the balance due on invoice of April 2.

Apr. 20. Received cash from Pinecrest Co. for balance due on invoice of April 6.

Apr. 22. Issued Invoice No. 797 to Mendez Co., $7,470.

Apr. 25. Received $3,200 note receivable in partial settlement of the balance due on the Shilo Co. account.

Apr. 30. Received cash from fees earned, $12,890.

Post revenue and collections to the accounts receivable subsidiary ledger.

Required:

1. Insert the following balances in the general ledger as of April 1:

11 Cash $11,350

12 Accounts Receivable 14,830

14 Notes Receivable 6,000

41 Fees Earned -

After completing the recording of the transactions in the journals in part 3, total each of the columns of the special journals, and post the individual entries and totals to the general ledger. Insert account balances after the last posting. When posting to the general ledger, post in chronological order. However, if there is more than one entry on the same date, be sure to post transactions from the revenue journal before posting transactions from the cash receipts journal.

If an amount box does not require an entry, leave it blank. In CNOW, Journal pages begin with “J”, Cash Receipts begin with “CR” and Revenue Journal begins with “R”. For example journal/ Cash Receipts/ Revenue Journal, page 1/36/40 respectively. POST. REF. is simply J1, CR36, and R40.

Answer 1

Prepare the general ledger for given account as follows:

                   CASH

Date	Item	Post. ref	Debit($)	Credit($)	Debit balance($)	Credit balance($)
April 1	Balance				11,350
April 30		CR36	34,890		45,740

          

    ACCOUNTS RECEIVABLE

Date	Item	Post. ref	Debit($)	Credit($)	Debit balance($)	Credit balance($)
April 1	Balance				14,380
April 25		J1		3,200	11,630
April 30		R40	23,090		34,720
April 30		CR30		21,500	13,220

Explanation of solution

General ledger

General ledger refers to the ledger that records all the transactions of the business related to the company assets,liablities, owners equities, revenues and expenses. each subsidiary ledger is represented in the general ledger by summarizing the account.

Account receviable subsidiary ledger:

Account receviable subsidiary ledger is the ledger which is used to post the customer transaction in one particular ledger account.it helps the business for locate the error in the customer ledger balance.after all transaction are posted,the balance in the accounts receviable subsidiary ledger should be totaled and compare with the balance in the general ledger of accounts receivable.if both the balance does not agree, the error has been loacted and corrected.