Problem 7-1A Special journals, subsidiary ledgers, trial balance-perpetual LO C3

Question

Problem 7-1A Special journals, subsidiary ledgers, trial balance-perpetual LO C3, P1, P2

[The following information applies to the questions displayed below.]

Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 3/10, n/30).

Assume the following ledger account amounts Inventory (March 1 beg. bal. is $62,000), Z. Church, Capital (March 1 beg. bal. is $62,000) and Church Company uses the perpetual inventory system.

Mar. 1 Purchased $37,000 of merchandise from Van Industries, invoice dated March 1, terms 3/15, n/30. 2 Sold merchandise on credit to Min Cho, Invoice No. 854, for $14,800 (cost is $7,400). 3 (a) Purchased $1,110 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 $7,400 (cost is $3,700). 6 Borrowed $72,000 cash from Federal Bank by signing a long-term note payable. 9 Purchased $18,500 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 $3,700 (cost is $1,850). 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 $30,000 of merchandise from the CD Company, invoice dated March 13, terms 3/10, n/30. 15 (a) Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first half of the month, $13,200. Cashed the check and paid the employees. 15 (b) Cash sales for the first half of the month are $59,200 (cost is $47,360). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.) 16 Purchased $1,630 of store supplies on credit from Gabel Company, invoice dated March 16, terms n/10 EOM. 17 Received a $3,000 credit memorandum from CD Company for the return of unsatisfactory merchandise purchased on March 14. 19 Received a $555 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 $11,100 (cost is $4,440). 28 Sold merchandise on credit to Linda Witt, Invoice No. 858, for $4,440 (cost is $1,776). 31 (a) Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the month, $13,200. Cashed the check and paid the employees. 31 (b) Cash sales for the last half of the month are $65,120 (cost is $39,072). 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. Required information Problem 7-1A Special journals, subsidiary ledgers, trial balance-perpetual LO C3, P1, P2 The following information applies to the questions displayed below.] Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 3/10, n/30). Mar.1 Purchased $37,000 of merchandise from Van Industries, invoice dated March 1, terms 3/15, n/30 2 Sold merchandise on credit to Min Cho, Invoice No. 854, for $14,800 (cost is $7,400) 3 (a) Purchased $1,118 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 $7,400 (cost is $3,700) Borrowed $72,000 cash from Federal Bank by signing a long-term note payable Purchased $18,500 of office equipment on credit from Spell Supply, invoice dated March 9, terms n/10 EOM Sold merchandise on credit to Jovita Albany, Invoice No. 856, for $3,700 (cost is $1,850) Received payment from Min Cho for the March 2 sale less the discount 12 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 15 (a) Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first half of the Purchased $30,000 of merchandise from the CD Company, invoice dated March 13, terms 3/10, n/30 month, $13,200. Cashed the check and paid the employees. 15 (b) Cash sales for the first half of the month are $59,200 (cost is $47,360). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.) Purchased $1,630 of store supplies on credit from Gabel Company, invoice dated March 16, terms n/10 EOM Received a $3,000 credit memorandum from CD Company for the return of unsatisfactory merchandise purchased on March 14 Received a $555 credit memorandum from Spell Supply for office equipment received on March 9 and returned for credit Received payment from Jovita Albany for the sale of March 10 less the discount Issued Check No. 418 to CD Company in payment of the invoice of March 13 less the March 17 return and the discount 16 17 19 23 27 Sold merchandise on credit to Jovita Albany, Invoice No. 857, for $11,100 (cost is $4,440) 28 31 (a) Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the Sold merchandise on credit to Linda Witt, Invoice No. 858, for $4,440 (cost is $1,776) month, $13,200. Cashed the check and paid the employees. 31 (b) Cash sales for the last half of the month are $65,120 (cost is $39,072) 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 $62,000), Z. Church, Capital (March 1 beg bal. is $62,000) and Church Company uses the perpetual inventory system

Explanation / Answer

Church Company General Journal Date Particular Amount (Dr) Amount (Cr) 1-Mar Mercendise Inventory $         37,000.00     To Accounts Payable-Van Industries $                                          37,000.00 (Being Amount of Mercendise Purchased on account from Van Industries) 2-Mar Accounts receivable $         14,800.00       To Sales Revenue $                                          14,800.00 (Being amount of sales on credit to Min Cho against inv.no.854) 2-Mar Cost of goods sold $           7,400.00      To Mercendise Inventory $                                            7,400.00 (Being amount of cost of goods sold) 3-Mar Office Supplies $           1,110.00      To Accounts Payable $                                            1,110.00 (Being amount of Supplies   3-Mar Accounts receivable $           7,400.00       To Sales Revenue $                                            7,400.00 (Being amount of sales on credit to Linda Vitt against inv.no.855) 3-Mar Cost of goods sold $           3,700.00      To Mercendise Inventory $                                            3,700.00 (Being amount of cost of goods sold) 6-Mar Cash $         72,000.00     To Notes Payable $                                          72,000.00 (Being Amount borrowed from bank against Notes Payable) 9-Mar Office Equipment $         18,500.00     To Accounts Payable $                                          18,500.00 (Being Amount of Office Equipment Purchased from Spell Supply) 10-Mar Accounts receivable $           3,700.00       To Sales Revenue $                                            3,700.00 (Being amount of sales on credit to Jovita Albany against inv.no.856) 10-Mar Cost of goods sold $           1,850.00      To Mercendise Inventory $                                            1,850.00 (Being amount of cost of goods sold) 12-Mar Cash=($14800*97%) $         14,356.00 Sales Discount=($14800*3%) $               444.00      To Accounts Receivable $                                          14,800.00 (Being Amount Received from Nin Cho, after allowing 3% Sales Discount) 13-Mar Accounts Payable= $         37,000.00       To Cash (37000*97%) $                                          35,890.00         To Purchase Discount=($37000*3%) $                                            1,110.00 (Being Amount Paid after receiving 3% discount ) 13-Mar Cash=($7400*97%) $           7,178.00 Sales Discount=($7400*3%) $               222.00      To Accounts Receivable $                                            7,400.00 (Being Amount received from Linda Vitt) 14-Mar Mercendise nventory $         30,000.00      To Accounts Payable-CD Company $                                          30,000.00 (Being amount of Mercendise Purchased) 15-Mar Sales Salaries Expenses $         13,200.00           To Cash $                                          13,200.00 (Being Amount of Half months Salary Paid ) 15-Mar Cash   $         59,200.00         To Sales Revenue $                                          59,200.00 (Being Amount of cash sales) 15-Mar Cost of goods sold $         47,360.00      To Mercendise Inventory $                                          47,360.00 (Being Amount of cost of goods sold) 16-Mar Store Supplies $           1,630.00        To Accounts Payable-Gabel Company $                                            1,630.00 (Being amount of Mercendise Purchased from Grant company) 17-Mar Accounts Payable-CD company $           3,000.00      To Mercendise Inventory $                                            3,000.00 (Being Amount of Goods returned) 19-Mar Accounts Payable-Spell Company $               555.00       To Office Equipment $                                                555.00 (Being Amount of returned of office Equipment ) 20-Mar Cash=($3700*97%) $           3,589.00 Sales Discount=($3700*3%) $               111.00       To Accounts Receivable $                                            3,700.00 (Being Amount of cash received from Jovita Albany) 23-Mar Accounts Payable-CD Company=($30000-$3000) $         27,000.00      To Cash=($27000*97%) $                                          26,190.00        To Purchase Discount=($27000*3%) $                                                810.00 (Being Amount paid to Cd Company after adjusting return of $3000 and Discount of 3%) 27-Mar Accounts receivable $         11,100.00       To Sales Revenue $                                          11,100.00 (Being amount of sales on credit to Jovida Albany against inv.no.857 27-Mar Cost of goods sold $           4,440.00      To Mercendise Inventory $                                            4,440.00 (Being amount of cost of goods sold) 28-Mar Accounts receivable $           4,440.00       To Sales Revenue $                                            4,440.00 (Being amount of sales on credit to Linda Vitt against inv.no.858 28-Mar Cost of goods sold $           1,776.00      To Mercendise Inventory $                                            1,776.00 (Being amount of cost of goods sold) 31-Mar Sales Salaries Expenses $         13,200.00      To Cash $                                          13,200.00 (Being amount of Sales Salaries for half Month) 31-Mar Cash   $         65,120.00         To Sales Revenue $                                          65,120.00 (Being Amount of cash sales) 31-Mar Cost of goods sold $         39,072.00      To Mercendise Inventory $                                          39,072.00 (Being Amount of cost of goods sold) Mercendise Inventory To Balance B/d $         62,000.00 By Cost of goods sold $                        7,400.00 To Accounts Payable-Van Indusrties $         37,000.00 By Cost of goods sold $                        3,700.00 To Accounts Payable-CD Company $         30,000.00 By Cost of goods sold $                        1,850.00 By Cost of goods sold $                      47,360.00 By Accounts Payable $                        4,440.00 By Cost of goods sold $                        1,776.00 By Cost of goods sold $                      39,072.00 By Bal c/d $                      23,402.00 Total $       129,000.00 Total $                    129,000.00 Sales Revenue Particular Amount Particular Amount To Balance C/d $       165,760.00 By Accounts Receivable $                      14,800.00 By Accounts Receivable $                        7,400.00 By Accounts Receivable $                        3,700.00 By Cash $                      59,200.00 By Accounts Receivable $                      11,100.00 By Accounts Receivable $                        4,440.00 By Cash $                      65,120.00 Total $       165,760.00 Total $                    165,760.00 Cost of goods sold Particular Amount Particular Amount To Mercendise Inventory $           7,400.00 By Balance C/d $                    105,598.00 To Mercendise Inventory $           3,700.00 To Mercendise Inventory $           1,850.00 To Mercendise Inventory $         47,360.00 To Mercendise Inventory $           4,440.00 To Mercendise Inventory $           1,776.00 To Mercendise Inventory $         39,072.00 Total $       105,598.00 Total $                    105,598.00 Accounts Receivable Particular Amount Particular Amount To Sales Revenue $         14,800.00 By Cash $                      14,356.00 To Sales Revenue $           7,400.00 By Sales Discount $                            444.00 To Sales Revenue $           3,700.00 By Cash $                        7,178.00 To Sales Revenue $         11,100.00 By Sales Discount $                            222.00 To Sales Revenue $           4,440.00 By Cash $                        3,589.00 By Sales Discount $                            111.00 By Bal c/d $                      15,540.00 Total $         41,440.00 Total $                      41,440.00 Office Supplies Particular Amount Particular Amount To Accounts Payable $           1,110.00 By Bal C/d $                        1,110.00 Total $           1,110.00 Total $                        1,110.00 Accounts Payable Particular Amount Particular Amount To Cash $         35,890.00 By Mercendise Inventory $                      37,000.00 To Purchase Discount $           1,110.00 By Office Supplies $                        1,110.00 To Mercendise Inventory $           3,000.00 By Store Supplies $                        1,630.00 To Office Equipment $               555.00 By Office Equipment $                      18,500.00 To Cash $         26,190.00 By Mercendise Inventory $                      30,000.00 To Purchase Discount $               810.00 To Bal C/d $         20,685.00 Total $         88,240.00 Total $                      88,240.00 Cash A/c Particular Amount Particular Amount To Accounts Receivable $         14,356.00 By Accounts Payable $                      35,890.00 To Notes Payable $         72,000.00 By Accounts Payable $                      26,190.00 To Accounts Receivable $           7,178.00 By Sales Salaries $                      13,200.00 To Sales Revene $         59,200.00 By Sales Salaries $                      13,200.00 To Accounts Receivable $           3,589.00 By Balance C/d $                    132,963.00 To Sales Revene $         65,120.00 Total $       221,443.00 $                    221,443.00 Notes Payable Particular Amount Particular Amount To Bal c/d $         72,000.00 By Cash $                      72,000.00 Total $         72,000.00 $                      72,000.00 Office Equipment Particular Amount Particular Amount To Accounts Payable $         18,500.00 By Accounts Payable $                            555.00 By Bal C/d $                      17,945.00 Total $         18,500.00 $                      18,500.00 Sales Discount Particular Amount Particular Amount To Accounts Receivable $               444.00 By Bal C/d $                            777.00 To Accounts Receivable $               222.00 To Accounts Receivable $               111.00 Total $               777.00 $                            777.00 Purchase Discount Particular Amount Particular Amount To Bal C/d $           1,920.00 By Accounts Payable $                        1,110.00 By Accounts Payable $                            810.00 Total $           1,920.00 $                        1,920.00 Sales Salaries Expenses Particular Amount Particular Amount To Cash $         13,200.00 By Bal c/d $                      26,400.00 To Cash $         13,200.00 Total $         26,400.00 $                      26,400.00 Store Supplies Particular Amount Particular Amount To Accounts Payable $           1,630.00 By Bal c/d $                        1,630.00 Total $           1,630.00 $                        1,630.00

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