Question

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., $7,580.
Apr. 5.		Received cash from Mendez Co. for the balance owed on its account.
Apr. 6.		Issued Invoice No. 794 to Pinecrest Co., $2,730.
Apr. 13.		Issued Invoice No. 795 to Shilo Co., $4,070.
		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., $8,500. 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., $11,190.
Apr. 25.		Received $3,090 note receivable in partial settlement of the balance due on the Shilo Co. account.
Apr. 30.		Received cash from fees earned, $19,090. 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	$16,990
12	Accounts Receivable	20,690
14	Notes Receivable	9,000
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 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.

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

Mendez Co.	$11,890
Ohr Co.	-
Pinecrest Co.	8,800
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.

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.

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

Cash
Date	Debit	Credit	Balance
			Debit	Credit
Apr.1			16990
Apr.5	11890		28880
Apr.15	8800		37680
Apr.19	7580		45260
Apr.20	2730		47990
Apr.30	19090		67080
			67080
			67080
			67080
			50090
Note Receivable
Date	Debit	Credit	Balance
			Debit	Credit
Apr.1			9000
Apr.25	3090		12090
			12090
Fee Earned
Date	Debit	Credit	Balance
			Debit	Credit
Apr.30		19090	19090
			19090
			19090

2.

Mendez Co.
Date	Debit	Credit	Balance
Apr.1			11890
Apr.5		11890	0
Apr.22	11190		11190
Ohr.Co.
Date	Debit	Credit	Balance
Apr.2	7580		7580
Apr.19		7580	0
			0
PineCrest Co.
Date	Debit	Credit	Balance
Apr.1			8800
Apr.6	2730		11530
Apr.15		8800	2730
Apr.16	8500		11230
Apr.20		2730	8500
Shilo Co.
Date	Debit	Credit	Balance
Apr.13	4070		4070
Apr.25		3090	980
			980
			980

3.

SALES JOURNAL
Date	Account	Invoice	Accounts	Cost of goods
	Debited	Number	Receivable Dr	Sold Dr
			Sales Cr	Inventory Cr
Apr.2	Ohr.Co.	793	7580
Apr.6	Pinecrest Co.	794	2730
Apr.13	Shilo Co.	795	4070
Apr.16	Pinecrest Co.	796	8500
Apr.22	Mendez.Co.	797	11190
Total			34070	0

4.

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
Apr.5	Mendez.Co.	11890		11890
Apr.15	Pinecrest Co.	8800		8800
Apr.19	Ohr Co.	7580		7580
Apr.20	Pinecrest Co.	2730		2730
Apr.30	Fee Earned	19090				19090
	Total	50090	0	31000	0	19090	0

5.

General Journal
Date	Account	Debit	Credit
Apr.25	Note Receivable	3090
	Accounts Receivable		3090
	(Note received from Shilo Co.)