Question

Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 1/10, n/30).

Mar.		1				Purchased $38,000 of merchandise from Van Industries, invoice dated March 1, terms 1/15, n/30.
		2				Sold merchandise on credit to Min Cho, Invoice No. 854, for $15,200 (cost is $7,600).
		3		(a)		Purchased $1,140 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 $7,600 (cost is $3,800).
		6				Borrowed $72,000 cash from Federal Bank by signing a long-term note payable.
		9				Purchased $19,000 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 $3,800 (cost is $1,900).
		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 $25,000 of merchandise from the CD Company, invoice dated March 13, terms 1/10, n/30.
		15		(a)		Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first half of the month, $13,000. Cashed the check and paid the employees.
		15		(b)		Cash sales for the first half of the month are $60,800 (cost is $48,640). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.)
		16				Purchased $1,660 of store supplies on credit from Gabel Company, invoice dated March 16, terms n/10 EOM.
		17				Received a $2,500 credit memorandum from CD Company for the return of unsatisfactory merchandise purchased on March 14.
		19				Received a $570 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 $11,400 (cost is $4,560).
		28				Sold merchandise on credit to Linda Witt, Invoice No. 858, for $4,560 (cost is $1,824).
		31		(a)		Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the month, $13,000. Cashed the check and paid the employees.
		31		(b)		Cash sales for the last half of the month are $66,880 (cost is $40,128).
		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.

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	Invoice	Accounts	Cost of goods
	Debited	Number	Receivable Dr	Sold Dr
			Sales Cr	Inventory Cr
Mar.2	Min.Cho	854	15200	7600
Mar.3	Linda Witt	855	7600	3800
Mar.10	Jovita Albany	856	3800	1900
Mar.27	Jovita Albany	857	11400	4560
Mar.28	Linda Witt	858	4560	1824
Total			42560	19684

2-b.

PURCHASE JOURNAL
Date	Account	Date of	Terms	Accounts	Inventory	Office	Other
		Invoice		Payable Cr	Dr	Supplies Dr	Accounts Dr
Mar.1	Van Inddustries	Mar.1	1/15, n/30	38000	38000
Mar.3	Gabel Company	Mar.3	n/10 EOM	1140		1140
Mar.9	Spell Supply	Mar.9	n/10 EOM	19000			19000
Mar.14	CD Company	Mar.13	1/10, n/30	25000	25000
Mar.16	Gabel Company	Mar.16	n/10 EOM	1660			1660
				84800	63000	1140	20660

2-c.

Cash Receipts Journal
Date	Account	Cash Dr	Cash	Accounts	Sales Cr	Other	Cost of goods
	Credited		Discount Dr	Receivable Cr		Account Cr	sold Dr
							Inventory Cr
Mar.6	Long term note payable	72000				72000
Mar.12	Min Cho	15048	152	15200
Mar.13	Linda Wit	7524	76	7600
Mar.15	Sales	60800			60800		48640
Mar.20	Jovita Albany	3762	38	3800
Mar.31	Sales	66880			66880		40128
	Total	226014	266	26600	127680	72000	88768

2-d.

Cash Disbursement Journal Journal
Date	Ck No.	Payee	Account	Cash Cr	Inventory	Other	Accounts
			Debited		Cr	Accounts Dr	Payable
							Dr
Mar.13	416	Van Inds.	38000	37620	380		38000
Mar.15	417	Self	Salaries and	13000		13000
			wages payable
Mar.23	418	CD company	CD company	22275	225		22500
Mar.31	419	Self	Salaries and	13000		13000
			wages payable
	Total			85895	605	26000	60500

2-e.

General Journal
Date	Account	Debit	Credit
Mar.6	Cash	72000
	Long term note payable		72000
	(Amount borrowed on note payable)
Mar.17	Accounts Payable	2500
	Inventory		2500
	(Credit received on return of goods to CD company)
Mar.19	Accounts Payable	570
	Office Equipment		570
	(Credit received on return of goods to Spell company)