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(f) Prepare a post-closing trial balance, and determine whether the subsidiary l

ID: 2576817 • Letter: #

Question

(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

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)

Page 2 of 2

Instructions

(a) Record the January transactions in a sales journal, a single-column purchases journal, a cash receipts journal, a cash payments journal, and a two-column general journal.

(b) Post the journals to the general ledger.

(c) Prepare a trial balance at January 31, 2017, in the trial balance columns of the worksheet. Complete the worksheet using the following additional information.

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.

(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

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 Particulars Amount (Dr.) Amount (Cr.) January 3 Account receivable A/c Dr                                                 7,000.00 To Sales A/c           7,000.00 January 5 Purchases A/c Dr                                                 7,200.00 To Account Payable A/c           7,200.00 January 7 Cash A/c Dr.                                                 6,000.00 To Account Receivable A/c           6,000.00 January 8 Freight A/c Dr.                                                     235.00 To Cash A/c              235.00 January 9 Account Payable A/c Dr.                                               20,000.00 To Cash A/c        19,710.00 To Cash Discount Received              290.00 January 9 Sales Return A/c Dr.                                                     300.00 To Account receivable A/c              300.00 January 10 Cash A/c Dr.                                               15,500.00 To Sales A/c        15,500.00 January 11 Account receivable A/c Dr                                                 2,500.00 To Sales A/c           2,500.00 January 12 Rent A/c Dr                                                 1,000.00 To Cash A/c           1,000.00 January 13 Cash A/c Dr.                                                 6,566.00 Cash Discount A/c Dr.                                                     134.00 To Account receivable A/c           6,700.00 January 15 Drawing A/c Dr                                                     800.00 To Cash A/c              800.00 January 16 Purchases A/c Dr                                               33,700.00 To Account Payable A/c        33,700.00 January 17 Office Supplies A/c Dr                                                     400.00 To Cash A/c              400.00 January 18 Account Payable A/c Dr.                                                     200.00 To Purchase return A/c              200.00 January 20 Cash A/c Dr.                                               20,100.00 To Sales A/c        20,100.00 January 21 Account Payable a/c Dr.                                               15,000.00 To Notes Payable        15,000.00 January 21 Cash A/c Dr.                                                     882.00 Cash Discount A/c Dr.                                                       18.00 To Account receivable A/c              900.00 January 22 Account receivable A/c Dr                                                 4,000.00 To Sales A/c           4,000.00 January 23 Account Payable A/c Dr.                                               32,000.00 To Cash A/c        31,540.00 To Cash Discount Received              460.00 January 25 Account receivable A/c Dr                                                 9,600.00 To Sales A/c           9,600.00 January 27 Purchases A/c Dr                                               21,100.00 To Account Payable A/c        21,100.00 January 28 Office Supplies A/c Dr                                                     275.00 To Cash A/c              275.00 January 31 Cash A/c Dr.                                               21,300.00 To Sales A/c        21,300.00 January 31 Salaries & Wages A/c Dr                                                 8,100.00 To Cash A/c           8,100.00 Dr. Sales ledger Cr. Date Particulars Amount Date Particulars Amount January 9 To Account receivable A/c                                                     300.00 January 3 By Account receivable           7,000.00 January 31 To Balance C/f                                               79,700.00 January 10 By Cash        15,500.00 January 11 By Account receivable           2,500.00 January 20 By Cash        20,100.00 January 22 By Account receivable           4,000.00 January 25 By Account receivable           9,600.00 January 31 By Cash        21,300.00                                               80,000.00        80,000.00 Dr. Purchase ledger Cr. Date Particulars Amount Date Particulars Amount January 5 To Account Payable A/c                                                 7,200.00 January 18 By Account payable              200.00 January 16 To Account Payable A/c                                               33,700.00 January 31 By Balance C/f        61,800.00 January 27 To Account Payable A/c                                               21,100.00                                               62,000.00        62,000.00 Dr. Cash receipt and Payment Cr. Date Particulars Amount Date Particulars Amount January 7 To Account Receivable A/c                                                 6,000.00 January 3 By Freight              235.00 January 10 To Sales A/c                                               15,500.00 January 9 By Account payable        19,710.00 January 13 To Account Receivable A/c                                                 6,566.00 January 12 By Rent A/c           1,000.00 January 20 To Sales A/c                                               20,100.00 January 15 By Drawings              800.00 January 21 To Account Receivable A/c                                                     882.00 January 17 By Office supplies              400.00 January 31 To Sales A/c                                               21,300.00 January 23 By Account payable        31,540.00 January 28 By Office supplies              275.00 January 31 By Salaries & Wages           8,100.00 January 31 By Balance C/F           8,288.00                                               70,348.00        70,348.00 Cash Discount account Date Particulars Amount Date Particulars Amount To Account Receivable A/c 134 By Account payable 290 To Account Receivable A/c 18 By Account payable 460 To Balance C/F 598                                                     750.00              750.00 Trial Balance as on 31.10.2017 Particulars Amount (Dr.) Amount (Cr.) Purchases                                               61,800.00                        -   Sales        79,700.00 Account Receivable                                                 9,200.00 Account Payable                                                 5,200.00 Cash                                                 8,288.00 Office Supplies                                                     675.00 Notes payable        15,000.00 Rent                                                 1,000.00 Drawings                                                     800.00 Salary & Wages                                                 8,100.00 Cash Discount A/c              598.00 Freight                                                     235.00 Grand total                                               95,298.00        95,298.00 Notes 1 We have combines purchase with purcahse return, Sales with sales return and cash discount ledgers