(a) Record the January transactions in a two-column general journal. Check figur
ID: 2576810 • Letter: #
Question
(a) Record the January transactions in a two-column general journal.
Check figures:
Cash Receipts Journal, total Cash DR: $ 70,348
Cash Payments Journal, total Cash CR: 62,060
Net Income: 25,218 Total Assets: 149,568
Total Post Closing Trial Balance: 151,193
Sun & Surf Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Sun & Surf are indicated in the working papers. Below are a series of transactions for Sun & Surf Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 55% of the sales price.
Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.
5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30.
7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.
8 Pay freight on merchandise purchased $235.
9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.
9 Issue credit of $300 to C. Ryder for merchandise returned.
10 Summary daily cash sales total $15,500.
11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828.
12 Pay rent of $1,000 for January.
13 Receive payment in full from M. Knast and C. Ryder less cash discounts.
15 Withdrawal of $800 cash by J. Sandy for personal use.
15 Post all entries to the subsidiary ledgers.
16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.
17 Pay $400 cash for office supplies.
18 Return $200 of merchandise to K. Xerxes and receive credit.
20 Summary daily cash sales total $20,100.
21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.
21 Receive payment in full from V. Arnold less cash discount.
22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.
22 Post all entries to the subsidiary ledgers.
23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.
25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.
27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.
27 Post all entries to the subsidiary ledgers.
28 Pay $275 cash for office supplies.
31 Summary daily cash sales total $21,300.
31 Pay salaries and wages of $8,100. (continued)
(a) Record the January transactions in a two-column general journal.
1. Office supplies at January 31 total $900.
2. Insurance coverage expires on September 30, 2017.
3. Annual depreciation on the equipment is $1,500.
4. Interest of $50 has accrued on the note payable.
General Ledger
Cash
No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 37,150
Accounts Receivable
No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 13,000
Notes Receivable
No. 115
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 39,000
Inventory
No. 120
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 17,795
Office Supplies
No. 125
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 1,200
Prepaid Insurance
No. 130
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 2,205
Equipment
No. 157
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 6,450
Accumulated Depreciation - Equipment
No. 158
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 1,500
Notes Payable
No. 200
Date
Explanation
Ref.
Debit
Credit
Balance
Accounts Payable
No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 35,000
Interest Payable
Date
Explanation
Ref.
Debit
Credit
Balance
J. Sandy, Capital
No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 80,300
J. Sandy, Drawing
No. 306
Date
Explanation
Ref.
Debit
Credit
Balance
Income Summary
No. 350
Date
Explanation
Ref.
Debit
Credit
Balance
Sales
No. 401
Date
Explanation
Ref.
Debit
Credit
Balance
Sales Returns and Allowances
No. 412
Date
Explanation
Ref.
Debit
Credit
Balance
Sales Discounts
No. 414
Date
Explanation
Ref.
Debit
Credit
Balance
Cost of Goods Sold
No. 505
Date
Explanation
Ref.
Debit
Credit
Balance
Salaries and Wages Expense
No. 627
Date
Explanation
Ref.
Debit
Credit
Balance
Depreciation Expense
No. 711
Date
Explanation
Ref.
Debit
Credit
Balance
Interest Expense
No. 718
Date
Explanation
Ref.
Debit
Credit
Balance
Insurance Expense
No. 722
Date
Explanation
Ref.
Debit
Credit
Balance
Office Supplies Expense
No. 728
Date
Explanation
Ref.
Debit
Credit
Balance
Rent Expense
No. 729
Date
Explanation
Ref.
Debit
Credit
Balance
General Ledger
Cash
No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 37,150
Accounts Receivable
No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 13,000
Notes Receivable
No. 115
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 39,000
Inventory
No. 120
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 17,795
Office Supplies
No. 125
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 1,200
Prepaid Insurance
No. 130
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 2,205
Explanation / Answer
Date General Journal Debit Credit Jan-03 Accounts receivable-M.Knast 5100 Accounts receivable-C.Ryder 1900 Sales revenue 7000 (Sales on account) Cost of goods sold ($7000 x 55%) 3850 Merchandise inventory 3850 (Cost of sales) Jan-05 Merchandise inventory 7200 Accounts payable-R.Drifter 5000 Accounts payable-N.Sova 2200 (Purchases on account) Jan-07 Cash 6000 Accounts payable-V. Arnold 4000 Accounts payable-I.Tan 2000 (Collections on account) Jan-08 Merchandise inventory 235 Cash 235 (Freight paid on purchases) Jan-09 Accounts payable-K.Xerxes 9000 Accounts payable-T.Caper 11000 Merchandise inventory 290 Cash 19710 (Payments within discount period) Jan-09 Sales returns and allowances 300 Accounts receivable-C.Ryder 300 (Credit memo issued for returns) Merchandise inventory 165 Cost of goods sold ($300 x 55%) 165 (Cost of goods returned) Jan-10 Cash 15500 Sales revenue 15500 (Summary daily cash sales) Cost of goods sold ($15500 x 55%) 8525 Merchandise inventory 8525 (Cost of sales) Jan-11 Accounts receivable-D.Gallagher 1600 Accounts receivable-V. Arnold 900 Sales revenue 2500 (Sales on account) Cost of goods sold ($2500 x 55%) 1375 Merchandise inventory 1375 (Cost of sales) Jan-12 Rent expense 1000 Cash 1000 (Payment of rent) Jan-13 Cash 6860 Sales discounts 140 Accounts receivable-M.Knast 5100 Accounts receivable-C.Ryder 1900 (Collections within discount period) Jan-15 J. Sandy, Drawings 800 Cash 800 (Cash withdrawals) Jan-16 Merchandise inventory 33700 Accounts payable-T.Caper 18000 Accounts payable-K.Xerxes 14200 Accounts payable-R.Drifter 1500 (Purchases on account) Jan-17 Office supplies 400 Cash 400 (Office supplies purchased for cash) Jan-18 Accounts payable-K.Xerxes 200 Merchandise inventory 200 (Purchase returns) Jan-20 Cash 20100 Sales revenue 20100 (Summary daily cash sales) Cost of goods sold ($20100 x 55%) 11055 Merchandise inventory 11055 (Cost of sales) Jan-21 Accounts payable-M.Griffen 15000 Notes payable 15000 (Note issued against payables) Jan-21 Cash 882 Sales discount 18 Accounts receivable-V. Arnold 900 (Collection within discount period) Jan-22 Accounts receivable-M.Knast 2700 Accounts receivable-D.Gallagher 1300 Sales revenue 4000 (Sales on account) Cost of goods sold ($4000 x 55%) 2200 Merchandise inventory 2200 (Cost of sales) Jan-23 Accounts payable-K.Xerxes 14000 Accounts payable-T.Caper 18000 Merchandise inventory 460 Cash 31540 (Payments within discount period) Jan-25 Accounts receivable-I.Tan 3500 Accounts receivable-C.Ryder 6100 Sales revenue 9600 (Sales on account) Cost of goods sold ($9600 x 55%) 5280 Merchandise inventory 5280 (Cost of sales) Jan-27 Merchandise inventory 21100 Accounts payable-T.Caper 14500 Accounts payable-N.Sova 1200 Accounts payable-R.Drifter 5400 (Purchases on account) Jan-28 Office supplies 275 Cash 275 (Office supplies purchased for cash) Jan-31 Cash 21300 Sales revenue 21300 (Summary daily cash sales) Cost of goods sold ($21300 x 55%) 11715 Merchandise inventory 11715 (Cost of sales) Jan-31 Salaries and wages expense 8100 Cash 8100 (Payment of salaries and wages)
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