Wise Company completes
these transactions during April of the current year (the terms of all its credit
sales are 2y10, ny30).
P7-1A Special journals,
subsidiary ledgers, and schedule of accounts receivable—perpetual
P7-1A Wise Company
completes these transactions during April of the current year (the terms of all
its credit sales are 2y10, ny30).
Apr. 2 Purchased $13,300
of merchandise on credit from Negi Company, invoice dated April 2, terms 2y10,
ny60.
3 Sold merchandise on
credit to Brooke Sledd, Invoice No. 760, for $3,000 (cost is $2,000).
3 Purchased $1,380 of
office supplies on credit from Madison, Inc. Invoice dated April 2, terms ny10 EOM.
4 Issued Check No. 587
to U.S. View for advertising expense, $999.
5 Sold merchandise on
credit to Paul Kohr, Invoice No. 761, for $8,000 (cost is $6,500).
6 Received an $85 credit
memorandum from Madison, Inc., for the return of some of the office supplies received
on April 3.
9 Purchased $11,125 of
store equipment on credit from Ned’s Supply, invoice dated April 9, terms ny10 EOM.
11 Sold merchandise on
credit to Amy Nilson, Invoice No 762, for $9,500 (cost is $7,000).
12 Issued Check No. 588
to Negi Company in payment of its April 2 invoice, less the discount.
13 Received payment from
Brooke Sledd for the April 3 sale, less the discount.
13 Sold $4,100 of
merchandise on credit to Brooke Sledd (cost is $2,600), Invoice No. 763.
14 Received payment from
Paul Kohr for the April 5 sale, less the discount.
16 Issued Check No. 589,
payable to Payroll, in payment of sales salaries expense for the first half of
the month, $9,750. Cashed the check and paid employees.
16 Cash sales for the
first half of the month are $50,840 (cost is $33,880). (Cash sales are recorded
daily from cash register data but are recorded only twice in this problem to
reduce repetitive entries.)
17 Purchased $12,750 of
merchandise on credit from Price Company, invoice dated April 17, terms 2y10, ny30.
18 Borrowed $50,000 cash
from First State Bank by signing a long-term note payable.
20 Received payment from
Amy Nilson for the April 11 sale, less the discount.
20 Purchased $730 of
store supplies on credit from Ned’s Supply, invoice dated April 19, terms ny10
EOM.
23 Received a $400
credit memorandum from Price Company for the return of defective merchandise received
on April 17.
23 Received payment from
Brooke Sledd for the April 13 sale, less the discount.
25 Purchased $10,375 of
merchandise on credit from Negi Company, invoice dated April 24, terms 2y10, ny60.
26 Issued Check No. 590
to Price Company in payment of its April 17 invoice, less the return and the
discount.
27 Sold $3,070 of
merchandise on credit to Paul Kohr, Invoice No. 764 (cost is $2,420).
27 Sold $5,700 of
merchandise on credit to Amy Nilson, Invoice No. 765 (cost is $3,305).
30 Issued Check No. 591,
payable to Payroll, in payment of the sales salaries expense for the last half
of the month, $9,750.
30 Cash sales for the
last half of the month are $70,975 (cost is $55,900).
Required
1. Prepare a sales
journal like that in Exhibit 7.5 and a cash receipts journal like that in
Exhibit 7.7. Number both journal pages as page 3. Then review the transactions
of Wise Company and enter those that should be journalized in the sales journal
and those that should be journalized in the cash receipts journal. Ignore any
transactions that should be journalized in a purchases journal, a cash
disbursements journal, or a general journal.
2. Open the following
general ledger accounts: Cash, Accounts Receivable, Inventory, Long-Term Notes Payable,
B. Wise, Capital, Sales, Sales Discounts, and Cost of Goods Sold. Enter the
March 31 balances for Cash ($85,000), Inventory ($125,000), Long-Term Notes
Payable ($110,000), and B. Wise, Capital ($100,000). Also open accounts
receivable subsidiary ledger accounts for Paul Kohr, Brooke Sledd, and Amy
Nilson.
3. Verify that amounts
that should be posted as individual amounts from the journals have been posted.
(Such items are immediately posted.) Foot and crossfoot the journals and make
the month-end postings.
4. Prepare a trial
balance of the general ledger and prove the accuracy of the subsidiary ledger
by preparing a schedule of accounts receivable.
Analysis Component
5. Assume that the total
for the schedule of Accounts Receivable does not equal the balance of the controlling
account in the general ledger. Describe steps you would take to discover the
error(s).
TUTORIAL
PREVIEW
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CASH RECEIPTS JOURNAL
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Page 3
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Sales
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Accounts
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Other
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Cost of Goods Sold Dr.
Inventory Cr.
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Cash
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Discount
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Receivable
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Sales
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Accts.
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Date
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Account Credited
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Explanation
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PR
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Dr.
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Dr.
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Cr.
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Cr.
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Cr.
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Apr. 13
|
Brooke Sledd
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Sale of 4/3
|
ü
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2,940
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60
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3,000
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14
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Paul Kohr
|
Sale of 4/5
|
ü
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7,840
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160
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8,000
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16
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Sales
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Cash Sales
|
ü
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50,840
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50,840
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33,880
|
|
File
name: P7-1A-wise-company.xls
File type: XLS Price: $15
