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

During the month of October 20--, The Pink Petal flower shop engaged in the following transactions:

Chapter 12, Problem 1MP, During the month of October 20--, The Pink Petal flower shop engaged in the following transactions: , example  1

Selected account balances as of October 1 were as follows:

Chapter 12, Problem 1MP, During the month of October 20--, The Pink Petal flower shop engaged in the following transactions: , example  2

The Pink Petal also had the following subsidiary ledger balances as of October 1:

Chapter 12, Problem 1MP, During the month of October 20--, The Pink Petal flower shop engaged in the following transactions: , example  3

Chapter 12, Problem 1MP, During the month of October 20--, The Pink Petal flower shop engaged in the following transactions: , example  4

REQUIRED

  1. 1. Record the transactions in a sales journal (page 7), cash receipts journal (page 10), purchases journal (page 6), cash payments journal (page 11), and general journal (page 5). Total, verify, and rule the columns where appropriate at the end of the month.
  2. 2. Post from the journals to the general ledger, accounts receivable ledger, and accounts payable ledger accounts. Use account numbers as shown in the chapter.

1.

Expert Solution
Check Mark
To determine

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

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 1MP , additional homework tip  1

Table (1)

Verification of total debit and credit column:

Total Debit = Total Credit$6,300.00=($6,000.00+$300.00)

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 1MP , additional homework tip  2

Table (2)

Verification of total debit and credit column:

Total Debit = Total Credit$10,910.00=($7,235.00+$3,500.00+$175.00)

Purchase Journal: Purchase journal records all the merchandise purchase on credit. In a single column purchase journal, debit aspect of inventory and credit aspect of accounts payable are recorded, and then posted to individual subsidiary supplier account.

Prepare the transactions in the purchase journal:

College Accounting, Chapters 1-27, Chapter 12, Problem 1MP , additional homework tip  3

Table (3)

Cash payments journal: Cash payments journal refers to the journal that is used to record the all transaction which is involve the cash payments. For example, the business paid cash to employees (salary paid to employees).

Cash payments journal is used to record merchandise purchases made in cash and payments of accounts payable. It also records all other cash payments to various purposes. To include all these transactions, companies use multi-column cash payments journal.

Prepare the transactions in a cash payments journal and total the each column of cash payments journal:

College Accounting, Chapters 1-27, Chapter 12, Problem 1MP , additional homework tip  4

Table (4)

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 October 14:

General Journal
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
October14Sales Returns and Allowances401.1300.00 
  Sales Tax Payable23115.00 
   Accounts Receivable, MJ122/✓ 315.00
  (Record merchandise returned)   

Table (5)

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, MJ 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.

Transaction on October 17:

Page: 3
DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
20--    
October17Accounts Payable, V Etc.202/✓900 
   Purchases Returns and Allowances501.1 900
  (Record merchandise returned)   

Table (6)

Description:

  • ■ Accounts Payable, V Etc, is a liability account. Since inventory is returned, amount to be paid has decreased, liability account is decreased, and a decrease in liability is debited.
  • ■ Purchases Returns and Allowances is a contra-cost account, and contra-cost accounts increase the equity value, and an increase in equity is credited.

2.

Expert Solution
Check Mark
To determine

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

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--      
October1Balance   18,225 
 31 CR1010,910 29,135 
 31 CP11 3,72625,409 

Table (7)

ACCOUNT    Accounts Receivable                                             ACCOUNT NO. 122
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
October1Balance   9,619 
 14 J5 3159,304 
 31 S76,300 15,604 
 31 CR10 7,2358,369 

Table (8)

ACCOUNT    Accounts Payable                                              ACCOUNT NO. 202
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
October1Balance   5,120
 17 J5900  4,220
 31 P6 4,700 8,920
 31 CP112,700  6,220

Table (9)

ACCOUNT    Sales Tax Payable                                                 ACCOUNT NO. 231
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
October14 J515 15 
 31 S7 300 285
 31 CR10 175 460

Table (10)

ACCOUNT    Sales                                                                         ACCOUNT NO. 401
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
October31 S7 6,000 6,000
 31 CR10 3,500 9,500

Table (11)

ACCOUNT    Sales Returns and Allowances                            ACCOUNT NO. 401.1
DateItemPost. Ref.Debit ($)Credit ($)Balance
Debit ($)Credit ($)
20--      
October14 J5300.00 300.00 

Table (12)

ACCOUNT    Purchases                                                            ACCOUNT NO. 501
DateItemPost. Ref.Debit ($)Credit ($)Balance
 
Debit ($)Credit ($)
20--      
October31 P64,700 4,700 

Table (13)

ACCOUNT    Purchases Return and Allowances                      ACCOUNT NO. 501.1                                       
DateItemPost. Ref.Debit ($)Credit ($)Balance
 
Debit ($)Credit ($)
20--      
October17 J5 900 900

Table (14)

ACCOUNT    Purchases Discounts                                           ACCOUNT NO. 501.2                                       
DateItemPost. Ref.Debit ($)Credit ($)Balance
 
Debit ($)Credit ($)
20--      
October31 CP11 24 24

Table (15)

ACCOUNT    Wages Expense                                                   ACCOUNT NO. 511                                       
DateItemPost. Ref.Debit ($)Credit ($)Balance
 
Debit ($)Credit ($)
20--      
October29 CP11900 900 

Table (16)

ACCOUNT    Phone Expense                                                   ACCOUNT NO. 5125                                      
DateItemPost. Ref.Debit ($)Credit ($)Balance
 
Debit ($)Credit ($)
20--      
October5 CP11150 150 

Table (17)

Post the prepared journals to the accounts receivable ledger:

NAME          D Decorating
ADDRESS 12 J Lane, H, CT  06117
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
October1Balance  3,340
 24 CR10 2,1351,205
 27 S73,150 4,355

Table (18)

NAME          MJ
ADDRESS   700 H DR., AVON, CT  06108
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
October1Balance  4,000
 12 CR10 3,100900
 14 J5 315585

Table (19)

NAME          E Shoe Maker
ADDRESS  52 J Road, H, CT 06118
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
October1Balance  279
 1 S71,050 1,329

Table (20)

NAME           L Summers
ADDRESS     5200 H Avenue., H CT 06111
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
October1Balance  2,000
 9 CR10 2,000 
 12 S72,100 2,100

Table (21)

Post the journals to the accounts payable ledger:

NAME           F Wholesalers
ADDRESS     43 L Lane., B CT 06007
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
October1Balance  1,500
 2 P6 4,0005,500
 11 CP111,500 4,000

Table (22)

NAME           J Hand
ADDRESS     1009 D Rd., F CT 06082
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
October1Balance  500
 2 CP11500 0

Table (23)

NAME           S Enterprises
ADDRESS     88 A Street, N, CT 06789
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
October4 P6 700700
 13 CP11700 0

Table (24)

NAME           V Etc.
ADDRESS     34 h Avenue.,  East H, CT 05234
DateItemPost. Ref.Debit ($)Credit ($)Balance ($)
20--     
October1Balance  3,120
 17 J5900 2,220

Table (25)

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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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