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., $7,520.
Apr. 5.		Received cash from Mendez Co. for the balance owed on its account.
Apr. 6.		Issued Invoice No. 794 to Pinecrest Co., $2,710.
Apr. 13.		Issued Invoice No. 795 to Shilo Co., $4,040.
		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., $8,430. 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., $11,100.
Apr. 25.		Received $3,070 note receivable in partial settlement of the balance due on the Shilo Co. account.
Apr. 30.		Received cash from fees earned, $18,950. 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	$17,240
12	Accounts Receivable	21,000
14	Notes Receivable	9,140
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 Cash Receipts begins with “R”. For example journal/ Cash Receipts/ Cash Receipts, page 1/36/40 respectively. POST. REF. is simply J1, CR36, and R40.

GENERAL LEDGER
Date	Item	Post. Ref.	Debit	Credit	Balance Dr.	Balance Cr.
Account: Cash # 11
Apr. 1	Balance	✔
Account: Accounts Receivable # 12
Apr. 1	Balance	✔
Account: Notes Receivable # 14
Apr. 1	Balance	✔
Account: Fees Earned # 41

2. Insert the following balances in the accounts receivable subsidiary ledger as of April 1:

Mendez Co.	$12,070
Ohr Co.	-
Pinecrest Co.	8,930
Shilo Co.	-

After completing the recording of the transactions in the journals in part 3, post to the accounts receivable subsidiary ledger in chronological order, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customer's account before recording a cash receipt. 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 Cash Receipts begins with “R”. For example journal/ Cash Receipts/ Cash Receipts, page 1/36/40 respectively. POST. REF. is simply J1, CR36, and R40.

ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Date	Item	Post. Ref.	Debit	Credit	Balance
Account: Mendez Co.
Apr. 1	Balance	✔
Account: Ohr Co.
Account: Pinecrest Co.
Apr. 1	Balance	✔
Account: Shilo Co.

3. Prepare a single-column revenue journal (p. 40) and a cash receipts journal (p. 36). Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. The Fees Earned column is used to record cash fees.

4. Using the two special journals and the two-column general journal (p. 1), journalize the transactions for April. Post to the accounts receivable subsidiary ledger, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customer’s account before recording a cash receipt.

5. 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.

If an amount box does not require an entry, leave it blank.

REVENUE JOURNAL				PAGE 40
Date	Invoice No.	Account Debited	Post. Ref.	Accounts Rec. Dr. Fees Earned Cr.
			✔
			✔
			✔
			✔
			✔
				() ()

CASH RECEIPTS JOURNAL					PAGE 36
Date	Account Credited	Post. Ref.	Fees Earned Cr.	Accts. Rec. Cr.	Cash Dr.
		✔
		✔
		✔
		✔
		✔
			()	()	()

JOURNAL				PAGE 1
Date	Description	Post Ref.	Debit	Credit

6. What is the sum of the customer balances?
$

Does the sum of the customer balances agree with the accounts receivable controlling account in the general ledger?
  

7. Would an automated system omit postings to a controlling account as performed in step 5 for Accounts Receivable?

Answer 1

General Ledger
Account : Cash #11
					Balance
Date	Item	Post Ref	Debit	Credit	Debit	credit
Apr.1	Balance				17240
Apr.5	A/R		12070		29310
Apr.15	A/R		8930		38240
Apr.19	A/R		7520		45760
Apr.20	A/R		2710		48470
Apr.30	Fee Earned		18950		67420
Account : Accounts Receivable #12
					Balance
Date	Item	Post Ref	Debit	Credit	Debit	credit
Apr.1	Balance				21000
Apr.13	Sale		14270		35270
Apr.13	Cash			12070	23200
Apr.16	Sale		8430		31630
Apr.16	Cash			8930	22700
Apr.30	Sale		11100		33800
Apr.30	Cash			10230	23570
Apr.30	Note			3070	20500
Account : Notes Receivable #14
					Balance
Date	Item	Post Ref	Debit	Credit	Debit	credit
Apr.1	Balance				9140
Apr.25	A/R		3070		12210
					12210
Account : Fee Earned # 41
					Balance
Date	Item	Post Ref	Debit	Credit	Debit	credit
Apr.1	Balance					0
Oct.30	Purchase			16940		16940
						16940
Accounts Receivable Subsidiary Ledger
Date	Item	Post Ref	Debit	Credit	Balance
Account: Mendez Co.
Apr.1	Balance				12070
Apr.5	Cash			12070	0
Apr.22	Sales		11100		11100
Account: Ohr Co.
Oct.1	Balance				0
Apr.2	Sale		7520		7520
Apr.19	Cash			7520	0
Account: Pinecrest Co.
Oct.1	Balance				8930
Apr.6	Sale		2710		11640
Apr.15	Cash			8930	2710
Apr.16	Sale		8430		11140
Apr.20	Cash			2710	8430
					8430
Account: Shilo Co.
Apr.1	Balance				0
Apr.13	Sales		4040		4040
Apr.25	Note Rec.			3070	970

REVENUE JOURNAL				PAGE 40
				Accounts Receivable Dr.
		Account Debited	Post. Ref.
Date	Invoice No.
				Fee Earned Cr
Apr.2	793	Ohr Co.	✔	7520
Apr.6	794	Pinecrest Co.	✔	2710
Apr.13	795	Shilo	✔	4040
Apr.16	796	Pinecrest Co.	✔	8430
Apr.22	797	Mendez co.	✔	11100
Apr.30		Total		33800