2.
Journalize the given transactions.
2.
Explanation of Solution
Debit: A debit is an accounting term that refers to the left side of an account. The term debit is be denoted by (Dr). The recording amount on the left side of the account is known as debiting.
Credit: A credit is an accounting term that refers to the right side of an account. The term credit is denoted as (Cr). The recording amount on the right side of the account is known as crediting.
Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all the increase in the assets, the expenses and the dividends, all the decrease in liabilities, revenues and the stockholders’ equities.
- Credit, all the increase in the liabilities, the revenues, and the stockholders’ equities, and all decreases in the assets, and the expenses.
Pass the journal entries for the given transactions:
General Journal | Page - 1 | |||
Date | Description | Post Ref | Debit | Credit |
2019 | ||||
March 1 | 111 | $756 | ||
Sales | $700 | |||
Sales Tax Payable (1) | $56 | |||
(To record the sale on account to ME; Sales slip 101) | ||||
March 3 | Accounts receivable (4) | 111 | $324 | |
Sales | $300 | |||
Sales Tax Payable (3) | $24 | |||
(To record the sale on account to EA; Sales slip 102) |
Table (1)
General Journal | Page - 2 | |||
Date | Description | Post Ref | Debit | Credit |
2019 | ||||
March 8 | Sales Returns and Allowances | $ 100.00 | ||
Sales Tax Payable (5) | $ 8.00 | |||
Accounts receivable (6) | 111 | $ 108.00 | ||
(To record the sales returns from ME for the sales made on March 1 using sales slip 101, the credit memorandum is 1) | ||||
March 10 | Cash (7) | $ 648 | ||
Accounts receivable | 111 | $ 648 | ||
(To record the receipt of payment from ME) | ||||
March 12 | Accounts receivable (9) | 111 | $486 | |
Sales | $450 | |||
Sales Tax Payable (8) | $36 | |||
(To record the sale on account to AH; Sales slip 103) | ||||
March 15 | Cash (11) | $5,400 | ||
Sales | $5,000 | |||
Sales Tax Payable (10) | $400 | |||
(To record the cash sales) | ||||
Credit Card Expense (13) | $226.80 | |||
Cash (14) | $7,333.20 | |||
Sales | $7,000.00 | |||
Sales Tax Payable (12) | $560.00 | |||
(To record the credit card sales) | ||||
March 25 | Accounts receivable (16) | 111 | $324 | |
Sales | $300 | |||
Sales Tax Payable (15) | $24 | |||
(To record the sale on account to JC; Sales slip 104) |
Table (2)
General Journal | Page - 3 | |||
Date | Description | Post Ref | Debit | Credit |
2019 | ||||
March 26 | Accounts receivable (18) | 111 | $3,240 | |
Sales | $3,000 | |||
Sales Tax Payable (17) | $240 | |||
(To record the sale to customer using AE card) | ||||
March 28 | Cash | $100 | ||
Accounts receivable | 111 | $100 | ||
(To record the receipt of partial payment from AH) | ||||
March 31 | Cash (20) | $5,940 | ||
Sales | $5,500 | |||
Sales Tax Payable (19) | $440 | |||
(To record the cash sales) | ||||
Credit Card Expense (22) | $226.80 | |||
Cash (23) | $7,333.20 | |||
Sales | $7,000.00 | |||
Sales Tax Payable (21) | $560.00 | |||
(To record the credit card sales) | ||||
Credit Card Expense (24) | $129.60 | |||
Cash (25) | $3,110.40 | |||
Accounts receivable | 111 | $3,240.00 | ||
(To record the receipt of payment for the sales made on AE card) |
Table (3)
Working Notes (1):
Calculate the value of Sales Tax Payable on March 1.
Working Notes (2):
Calculate the value of Accounts receivable on March 1.
Working Notes (3):
Calculate the value of Sales Tax Payable on March 3.
Working Notes (4):
Calculate the value of Accounts receivable on March 3.
Working Notes (5):
Calculate the value of Sales Tax Payable on March 8.
Working Notes (6):
Calculate the value of Accounts receivable on March 8.
Working Notes (7):
Calculate the value of Cash on March 10.
Working Notes (8):
Calculate the value of Sales Tax Payable on March 12.
Working Notes (9):
Calculate the value of Accounts receivable on March 12.
Working Notes (10):
Calculate the value of Sales Tax Payable on March 15.
Working Notes (11):
Calculate the value of Cash on March 15.
Working Notes (12):
Calculate the value of Sales Tax Payable on March 15.
Working Notes (13):
Calculate the value of Credit Card Expense on March 15.
Working Notes (14):
Calculate the value of Cash on March 15.
Working Notes (15):
Calculate the value of Sales Tax Payable on March 25.
Working Notes (16):
Calculate the value of Accounts receivable on March 25.
Working Notes (17):
Calculate the value of Sales Tax Payable on March 26.
Working Notes (18):
Calculate the value of Accounts receivable on March 26.
Working Notes (19):
Calculate the value of Sales Tax Payable on March 31.
Working Notes (20):
Calculate the value of Cash on March 31.
Working Notes (21):
Calculate the value of Sales Tax Payable on March 31.
Working Notes (22):
Calculate the value of Credit Card Expense on March 31.
Working Notes (23):
Calculate the value of Cash on March 31.
Working Notes (24):
Calculate the value of Credit Card Expense on March 31.
Working Notes (25):
Calculate the value of Cash on March 31.
1 and 3
1 and 3
Explanation of Solution
General ledger: General ledger is a record of all accounts of assets, liabilities, and
Post the journal entries in the General Ledger:
GENERAL LEDGER | ||||||
ACCOUNT: Accounts receivable | Account No.: 111 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
March 1 | J1 | $756.00 | $756.00 | |||
March 3 | J1 | $324.00 | $1,080.00 | |||
March 8 | J2 | $108.00 | $972.00 | |||
March 10 | J2 | $648.00 | $324.00 | |||
March 12 | J2 | $486.00 | $810.00 | |||
March 25 | J2 | $324.00 | $1,134.00 | |||
March 26 | J3 | $3,240.00 | $4,374.00 | |||
March 28 | J3 | $100.00 | $4,274.00 | |||
March 31 | J3 | $3,240.00 | $1,034.00 |
Table (4)
4.
Using the Schedule of Accounts Receivable compare the Accounts receivable balances with the total.
4.
Explanation of Solution
Schedule of accounts receivable: This is the schedule which reports all the debtors of a company during the given period and the balances to be recovered from them.
Prepare the Accounts receivable Subsidiary Ledger:
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER | |||||
NAME: EA | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
March 3 | Sales Slip 102 | J1 | $324.00 | $324.00 | |
NAME: AE Card | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
March 26 | J3 | $3,240.00 | $3,240.00 | ||
March 31 | J3 | $3,240.00 | $0.00 | ||
NAME: JC | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
March 25 | Sales Slip 104 | J2 | $324.00 | $324.00 | |
NAME: ME | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
March 1 | Sales Slip 101 | J1 | $756.00 | $756.00 | |
March 8 | Credit Memorandum 1 | J2 | $108.00 | $648.00 | |
March 10 | J2 | $648.00 | $0.00 | ||
NAME: AH | |||||
ADDRESS: | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance |
2019 | |||||
March 12 | Sales Slip 103 | J2 | $486.00 | $486.00 | |
March 28 | J3 | $100.00 | $386.00 |
Table (5)
Prepare the Schedule of Accounts Receivable:
Company AXSG | |
Schedule of Accounts Receivable | |
March 31, 2019 | |
Particulars | Amount ($) |
EA | $324.00 |
AE | $0.00 |
JC | $324.00 |
ME | $0.00 |
AH | $386.00 |
Total accounts receivable | $1,034.00 |
Table (6)
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Chapter 7 Solutions
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