College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
Question
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Chapter 12, Problem 8SPA

1.

To determine

Prepare the transaction in the sales journal, cash receipts journal and general journal and verify the total column and rule the column.

1.

Expert Solution
Check Mark

Explanation of Solution

Sales Journal

Sales journal is one form of special journal book, which records all the sales transactions that are sold to customers on credit. In a single column sales journal, debit aspect of accounts receivable and credit aspect of inventory are recorded, and then posted to individual subsidiary customer account.

Prepare the given transaction in a sales journal and verify the total column and rule the column:

College Accounting, Chapters 1-27, Chapter 12, Problem 8SPA , additional homework tip  1

Table (1)

Working note 1:

Calculate the amount of accounts receivable (debit) on dated 1st March:

Accounts receivable (debit) on dated 1stMarch}=(Sales + 8% on sales tax)=[$1,800+(8%×$1,800)]=[$1,800+$144]=$1,944

Working note 2:

Calculate the amount of accounts receivable (debit) on dated 3rd March:

Accounts receivable (debit) on dated 3rdMarch}=(Sales + 8% on sales tax)=[$2,240+(8%×$2,240)]=[$2,240+$179.20]=$2,419.20

Working note 3:

Calculate the amount of accounts receivable (debit) on dated 11th March:

Accounts receivable (debit) on dated 11thMarch}=(Sales + 8% on sales tax)=[$1,210+(8%×$1,210)]=[$1,210+$96.80]=$1,306.80

Working note 4:

Calculate the amount of accounts receivable (debit) on dated 18th March:

Accounts receivable (debit) on dated 18thMarch}=(Sales + 8% on sales tax)=[$2,620+(8%×$2,620)]=[$2,620+$209.60]=$2,829.60

Working note 5:

Calculate the amount of accounts receivable (debit) on dated 25th March:

Accounts receivable (debit) on dated 25thMarch}=(Sales + 8% on sales tax)=[$1,915+(8%×$1,915)]=[$1,915+$153.20]=$2,068.20

Working note 6:

Calculate the amount of accounts receivable (debit) on dated 27th March:

Accounts receivable (debit) on dated 27thMarch}=(Sales + 8% on sales tax)=[$2,016+(8%×$2,016)]=[$2,016+$161.28]=$2,177.28

Verification of total debit and credit column:

Total Debit = Total Credit$12,745.08=($11,801.00+$944.08)

Cash Receipts Journal:  It is a special book where only cash receipts transactions that are received from customers, merchandise sales and service made in cash and collection of accounts receivable are recorded.

The following are the some examples of transactions that would be recorded in the Other Accounts credit column of the cash receipts journal:

  • • Cash received as interest on notes payable
  • • Interest revenue received from debtors
  • • Cash receipts from bank loans
  • • Cash receipts for capital investments

Prepare the given transactions in the cash receipts journal and verify the total column and rule the column:

College Accounting, Chapters 1-27, Chapter 12, Problem 8SPA , additional homework tip  2

Table (2)

Working note 1:

Calculate the amount of cash on dated 7th March:

Cash(debit)on dated 1stMarch}=(Cash sales + 8% on sales tax)=[$3,160+(8%×$3,160)]=[$3,160+$252.8]=$3,412.8

Working note 2:

Calculate the amount of cash on dated 14th March:

Cash(debit)on dated 14thMarch}=(Cash sales + 8% on sales tax)=[$4,200+(8%×$4,200)]=[$4,200+$336]=$4,536

Working note 3:

Calculate the amount of cash on dated 21st March:

Cash(debit)on dated 21stMarch}=(Cash sales + 8% on sales tax)=[$2,400+(8%×$2,400)]=[$2,400+$192]=$2,592

Working note 4:

Calculate the amount of cash on dated 28th March:

Cash(debit)on dated 28thMarch}=(Cash sales + 8% on sales tax)=[$3,500+(8%×$3,500)]=[$3,500+$280]=$3,780

Verification of total debit and credit column:

Total Debit = Total Credit$19,910.88=($5,590.08+$13,260.00+$1,060.80)

Use the general journal to record the sales returns and allowances:

General Journal: It is a book where all the monetary transactions are recorded in the form of journal entries on the date of their occurrence in a chronological order.

Transaction on March 5:

General Journal
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
March5Sales Returns and Allowances401.130.00 
  Sales Tax Payable2312.40 
   Accounts Receivable, A &Company122/✓ 32.40
  (Record merchandise returned)   

Table (3)

Description:

  • ■ Sales Returns and Allowances is a contra-revenue account, and contra-revenue accounts decrease the equity value, and a decrease in equity is debited.
  • ■ Sales Tax Payable is a liability account. Since the payable decreased due to returns, the liability decreased, and a decrease in liability is debited.
  • ■ Accounts Receivable, A &Company is an asset account. Since inventory is returned, amount to be received has decreased, asset account is decreased, and a decrease in asset is credited.

Working Note:

Compute sales tax payable amount.

Sales tax payable = Sales returns×Sales tax percentage= $30×8%= $2.40

Transaction on March 16:

General Journal
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
March16Sales Returns and Allowances401.144.00 
  Sales Tax Payable2313.52 
   Accounts Receivable, BB122/✓ 47.52
  (Record merchandise returned)   

Table (4)

Description:

  • ■ Sales Returns and Allowances is a contra-revenue account, and contra-revenue accounts decrease the equity value, and a decrease in equity is debited.
  • ■ Sales Tax Payable is a liability account. Since the payable decreased due to returns, the liability decreased, and a decrease in liability is debited.
  • ■ Accounts Receivable, BB is an asset account. Since inventory is returned, amount to be received has decreased, asset account is decreased, and a decrease in asset is credited.

Working Note 1:

Compute sales tax payable amount.

Sales tax payable = Sales returns×Sales tax percentage= $44×8%= $3.52

Working note 2:

Compute accounts receivable amount.

Accounts receivable, Bakery E} = Sales returns+Sales tax payable= $44.00+$3.52= $47.52

2.

To determine

Post the prepared journals to the general ledger, and the accounts receivable ledger accounts.

2.

Expert Solution
Check Mark

Explanation of Solution

Posting transactions: The process of transferring the journalized transactions into the accounts of the ledger is known as posting the transactions.

Post the prepared journals to the general ledger:

ACCOUNT    Cash                                                                       ACCOUNT NO. 101
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
March1Balance  9,741.00 
 31 CR919,910.88 29,651.88 

Table (5)

ACCOUNT    Accounts Receivable                                             ACCOUNT NO. 122
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
March1Balance  1,058.25 
 5 J5 32.401,025.85 
 16 J5 47.52978.33 
 31 S612,745.08 13,723.41 
 31 CR9 5,590.088,133.33 

Table (6)

ACCOUNT    Sales Tax Payable                                                 ACCOUNT NO. 231
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
March5 J52.40 2.40 
 16 J53.52 5.92 
 31 S6 944.08 938.16
 31 CR9 1,060.80 1,998.96

Table (7)

ACCOUNT    Sales                                                                         ACCOUNT NO. 401
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
March31 S6 11,801.00 11,801.00
 31 CR9 13,260.00 25,061.00

Table (8)

ACCOUNT    Sales Returns and Allowances                            ACCOUNT NO. 401.1
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
March5 J530.00 30.00 
 16 J544.00 74.00 

Table (9)

Post the journals to the accounts receivable ledger:

NAME          Corporation A & Company
ADDRESS 1424 J Creek Road, N, In 47448-2245
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
March1 S61,944.00 1,944.00
 5 J5 32.401,911.60
 10 CR9 1,911.600

Table (10)

NAME          BB
ADDRESS   6422 E. B Road, B, In 47401-7756
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
March11 S61,306.80 1,306.80
 16 J5 47.521,259.28
 20 CR9 1,259.280
 25 S62,068.20 2,068.20

Table (11)

NAME          RJ Incorporation
ADDRESS  3315 l Avenue, B, in 47401-7223
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
March3 S62,419.20 2,419.20
 13 CR9 2,419.200
 18 S62,829.60 2,829.60

Table (12)

NAME           T Group
ADDRESS     2300 E. National Road, Cd, IN 46229-4824
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
March1Balance  1,058.25
 27 S62,177.28 3,235.53

Table (13)

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Chapter 12 Solutions

College Accounting, Chapters 1-27

Ch. 12 - Prob. 1CECh. 12 - LO3 Enter the following transactions in a cash...Ch. 12 - LO4 Enter the following transaction in a purchases...Ch. 12 - Enter the following transactions in a cash...Ch. 12 - Prob. 1RQCh. 12 - List four items of information about each sale...Ch. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQCh. 12 - Prob. 11RQCh. 12 - What steps are followed in posting from the cash...Ch. 12 - What steps are followed in posting from the cash...Ch. 12 - RECORDING TRANSACTIONS IN THE PROPER JOURNAL...Ch. 12 - Prob. 2SEACh. 12 - JOURNALIZING CASH RECEIPTS Enter the following...Ch. 12 - JOURNALIZING PURCHASES TRANSACTIONS Enter the...Ch. 12 - Prob. 5SEACh. 12 - SALES JOURNAL Futi Ishanyan owns a retail business...Ch. 12 - Prob. 7SPACh. 12 - Prob. 8SPACh. 12 - PURCHASES JOURNAL J. B. Speck, owner of Specks...Ch. 12 - PURCHASES JOURNAL, GENERAL LEDGER, AND ACCOUNTS...Ch. 12 - Prob. 11SPACh. 12 - PURCHASES JOURNAL, CASH PAYMENTS JOURNAL, AND...Ch. 12 - RECORDING TRANSACTIONS IN THE PROPER JOURNAL...Ch. 12 - Prob. 2SEBCh. 12 - Prob. 3SEBCh. 12 - JOURNALIZING PURCHASES TRANSACTIONS Enter the...Ch. 12 - JOURNALIZING CASH PAYMENTS Sandcastles Northwest...Ch. 12 - SALES JOURNAL T. M. Maxwell owns a retail business...Ch. 12 - Prob. 7SPBCh. 12 - SALES JOURNAL, CASH RECEIPTS JOURNAL, AND GENERAL...Ch. 12 - PURCHASES JOURNAL Ann Benton, owner of Bentons...Ch. 12 - PURCHASES JOURNAL, GENERAL LEDGER, AND ACCOUNTS...Ch. 12 - Prob. 11SPBCh. 12 - PURCHASES JOURNAL, CASH PAYMENTS JOURNAL, AND...Ch. 12 - Prob. 1MYWCh. 12 - Judy Baresford, the store manager of Comfort...Ch. 12 - During the month of October 20--, The Pink Petal...Ch. 12 - Screpcap Co. had the following transactions during...
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