Fundamental Accounting Principles -Hardcover
Fundamental Accounting Principles -Hardcover
22nd Edition
ISBN: 9780077862275
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 7, Problem 1BPSB
To determine

Journals:

Journals are the books where all the original entries of business transactions are recorded on basis of its occurrence order and date.

Sales Journal:

The journal where all the credit sales of merchandise are recorded is called a Sales Journal.

Purchases Journal:

It is the journal where all the purchase on accounts or credit purchase of merchandise, supplies, equipment etc. are recorded.

Cash Receipts Journal:

Cash receipts journal records all type cash receipts of a business organization like cash sales, collections from debtors, loans and borrowings etc.

Cash Disbursements Journal:

The journal where all the cash payments are recorded is called a cash payment journal like cash purchases of equipment, supplies, inventories and payment to creditors.

General Journal:

The transactions which are not recorded in the special journals namely, sales journal, purchase journal, cash receipt journal, and cash disbursement journal are recorded in the general journal.

Accounts Receivable Subsidiary Ledger:

A subsidiary ledger of accounts receivable shows the amount of money paid and owed by debtors for the transactions made on credit individually.

Schedule of Accounts Receivable:

A schedule of accounts receivable represents the overall amount of money owed by the debtors for credit transactions during a specified period.

To determine:

1. Open the general ledger accounts and subsidiary ledger of accounts receivables and accounts payable.

2. Preparation of special journals; sales journal, purchases journal, cash receipts journal, cash disbursements journal and General Journal.

3. Preparation of trial balance and schedules of both accounts receivable and accounts payable to prove the accuracy of subsidiary ledgers.

Expert Solution & Answer
Check Mark

Explanation of Solution

Explanation:

1. General Ledger Accounts

Cash
Date Debit Credit Balance
Nov. 2 $88,500    
12   $32,830  
15   $6,585  
15 $18,170    
18 $6,419    
19 $13,230    
19   $1,960  
25 $5,145    
30   $6,585  
30 $16,703    
Nov. 30     $100,207
       
Accounts Receivable
Date Debit Credit Balance
Nov. 8 $6,550    
10 $13,500    
15 $5,250    
18   $6,550  
19   $13,500  
22 $3,695    
24 $4,280    
25   $5,250  
       
Nov. 30     $7,975
Inventory
Date Debit Credit Balance
Nov. 1     $40,000
4 $33,500    
8   $3,910  
10   $8,500  
11 $2,557    
12   $670  
15   $9,000  
15   $2,450  
17   $557  
19   $40  
22   $2,060  
24   $2,130  
30   $10,200  
Nov. 30     $36,540
Office Supplies
Date Debit Credit Balance
Nov. 16 $459   $459
       
Nov. 30     $459
Store Supplies
Date Debit Credit Balance
Nov. 5 $1,040    
       
Nov. 30     $1,040
Office Equipment
Date Debit Credit Balance
Nov. 1 $5,058    
26   $922  
Nov. 30     $4,136
Accounts Payable
Date Debit Credit Balance
Nov. 1   $5,058  
4   $33,500  
5   $1,040  
11   $2,557  
12 $33,500    
16   $459  
17 $557    
19 $2,000    
26 $922    
Nov. 30     $5,635
Long-term Notes Payable
Date Debit Credit Balance
Nov. 2   $88,500  
       
Nov. 30     $88,500
C. Grassley, Capital
Date Debit Credit Balance
Nov. 1     $40,000
Nov. 30     $40,000
Sales
Date Debit Credit Balance
Nov. 8   $6,550  
10   $13,500  
15   $5,250  
15   $18,170  
22   $3,695  
24   $4,280  
30   $16,703  
Nov. 30     $68,148
       
Sales Discount
Date Debit Credit Balance
Nov. 18 $131    
19 $270    
25 $105    
Nov. 30     $506
Cost of Goods Sold
Date Debit Credit Balance
Nov. 8 $3,910    
10 $8,500    
15 $9,000    
15 $2,450    
22 $2,060    
24 $2,130    
30 $10,200    
Nov. 30     $38,250
Sales Salaries Expense
Date Debit Credit Balance
Nov. 15 $6,585    
30 $6,585    
$38,250      
Nov. 30     $13,170

Accounts Receivable Subsidiary ledger

Cyd Rounder
Date Debit Credit Balance
Nov. 8 $6,550   $6,550
18   $6,550 0
Nov. 30     0
Carlos Mental
Date Debit Credit Balance
10 $13,500   $13,500
19   $13,500 0
22 $3,695   $3,695
Nov. 30     $3,695
Tori Tripp
Date Debit Credit Balance
15 $5,250   $5,250
24 $4,280   $9,530
25   $5,250 $4,280
Nov. 30     $4,280

Accounts Payable Subsidiary Ledger

Brun Supply
Date Debit Credit Balance
Nov. 1 $5,058   $5,058
26   $922  
Nov. 30     $4,136
BLR Industries
Date Debit Credit Balance
Nov. 4 $33,500   $33,500
12   $33,500 0
Nov. 30     0
       
Grebe Company
Date Debit Credit Balance
Nov. 5 $1,040   $1,040
16 $459   $1,499
Nov. 30     $1,499
Lo Company
Date Debit Credit Balance
Nov. 11 $2,557   $2,557
17   $557 $2,000
19   $2,000 0
Nov. 30     $1,499

2. Special Journals and General Journal

Sales Journal
Date Account debited Invoice
Number
Accounts Receivable Dr.
Sales CR.
Cost of Goods Sold Dr.
Inventory Cr
Nov. 8 Cyd Rounder 439 $6,550 $3,910
10 Carlos Mental 440 $13,500 $8,500
15 Tori Tripp 441 $5,250 $2,450
22 Carlos Mental 442 $3,695 $2,060
24 Tori Tripp 443 $4,280 $2,130
         
Nov. 30 Totals   $33,275 $19,050

Foot and crossfoot of sales journal

Debit Columns Credit Columns
Accounts Receivable Dr. $33,275 Sales CR. $33,275
Cost of Goods Sold Dr. $19,050 Inventory Cr $19,050
Total $52,325   $52,325
Purchase Journal
Date Account Date of Invoice Terms Accounts Payable Cr. Inventory Dr. Office Supplies Dr. Other Accounts Dr.
Nov. 1 Brun Supply 11/1 n/10 EOM $5,058     $5,058
4 BLR Industries 11/3 2/10, n/30 $33,500 $33,500    
5 Grebe Company 11/5 n/10 EOM $1,040     $1,040
11 Lo Company 11/10 2/10, n/30 $2,557 $2,557    
16 Grebe Company 11/16 n/10 EOM $459   $459  
Nov. 30 Totals     $42,614 $36,057 $459 $6,098

Foot and crossfoot of purchase journal

Debit Columns Credit Columns
Inventory Dr. $36,057 Accounts Payable Cr. $42,614
Office Supplies Dr. $459    
Other Accounts Dr. $6,098    
Total $42,614   $42,614
Cash Receipt Journal
Date Account Credited Cash Dr. Sales Discount Dr. Accounts Receivables Cr. Sales Cr Other Account Cr. Cost of Goods Sold Dr.
Inventory Cr.
Nov. 2 Long-term note payable $88,500       $88,500  
15 Sales $18,170     $18,170   $9,000
18 Cyd Rounder $6,419 $131 $6,550      
19 Carlos Mental $13,230 $270 $13,500      
25 Tori Tripp $5,145 $105 $5,250      
30 Sales $16,703     $16,703   $10,200
               
Nov. 30 Totals $148,167 $506 $25,300 $34,873 $88,500 $19,200

Foot and crossfoot of cash receipts journal

Debit Columns Credit Columns
Cash Dr. $148,167 Accounts Receivables Cr. $25,300
Sales Discount Dr. $506 Sales Cr. $34,873
Cost of Goods Sold Dr. $19,200 Other Account Cr. $88,500
    Inventory Cr. $19,200
Total $167,873   $167,873
Cash Disbursements Journal
Date Check Number Payee Account Debited Cash Cr. Inventory Cr Other Account Dr. Accounts Payable Dr.
Nov. 12 633 BRL Industries BRL Industries $32,830 $670   $33,500
15 634 Payroll Sales Salaries expense $6,585   $6,585  
19 635 Lo Company Lo Company $1,960 $40   $2,000
30 636 Payroll Sales Salaries expense $6,585   $6,585  
               
Nov. 30   Totals   $47,960 $710 $13,170 $35,500

Foot and crossfoot of cash disbursements journal

Debit Columns Credit Columns
Other Account Dr. $13,170 Cash Cr $47,960
Accounts Payable Dr. $35,500 Inventory Cr $710
Total $48,670   $48,670
General Journal
Date Accounts name Debit Credit
Mar. 17 Accounts Payable – Lo Company $557  
  Merchandise inventory   $557
       
26 Accounts Payable – Brun Supply $922  
  Office Equipment   $922

Foot and crossfoot of general journal

Debit Columns Credit Columns
Accounts Payable Dr. $1,479 Merchandise inventory Cr. $557
    Office Equipment Cr $922
Total $1,479   $1,479

3. Trial balance and schedules of accounts receivable and accounts payable

GRASSELY COMPANY
Trial balance
November 30.
Accounts Debit Credit
Cash $100,207  
Accounts Receivable $7,975  
Inventory $36,540  
Office supplies $459  
Store supplies $1,040  
Office equipment $4,136  
Accounts Payable   $5,635
Long-term notes payable   $88,500
C G. Capital   $40,000
Sales   $68,148
Sales Discount $506  
Cost of Goods Sold $38,250  
Sales salaries expense $13,170  
Total $202,283 $202,283

Schedule of accounts receivable

GRASSELY COMPANY
Schedule of Accounts Receivable
November 30.
Carlos Mantel $3,695
Tori Tripp $4,280
Total Accounts Receivable $7,975

Schedule of accounts payable

CHURCH COMPANY
Schedule of Accounts Payable
November 30.
Brun Supply $4,136
Grebe Company $1,499
Total Accounts Receivable $5,635

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Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License