Accounting Information Systems

Kozma Company's chart of accounts includes the following selected accounts.
101 Cash
112 Accounts Receivable
120 Inventory
301 Owner's Capital
401 Sales Revenue
414 Sales Discounts
505 Cost of Goods Sold

On April 1, the accounts receivable ledger of Kozma Company showed the following balances: Morrow $1,550, Rose $1,200, Jennings Co. $2,900, and Dent $2,200. The April transactions involving the receipt of cash were as follows.

Apr. 1The owner, T. Kozma, invested additional cash in the business $7,200
4Received check for payment of account from Dent less 2% cash discount.
5Received check for $920 in payment of invoice no. 307 from Jennings Co.
8Made cash sales of merchandise totaling $7,245. The cost of the merchandise sold was $4,347.
10Received check for $600 in payment of invoice no. 309 from Morrow
11Received cash refund from a supplier for damaged merchandise $740.
23Received check for $1,000 in payment of invoice no. 310 from Jennings Co.
29Received check for payment of account from Rose (no cash discount allowed).

Instructions

  1. Journalize the transactions above in a six-column cash receipts journal with columns for Cash Dr., Sales Discounts Dr., Accounts Receivable Cr., Sales Revenue Cr., Other Accounts Cr., and Cost of Goods Sold Dr/Inventory Cr. Foot and cross-foot the journal.
  2. Insert the beginning balances in the Accounts Receivable control and subsidiary accounts, and post the April transactions to these accounts.
  3. Prove the agreement of the control account and subsidiary account balances.

Reineke Company's chart of accounts includes the following selected accounts.
101 Cash
120 Merchandise Inventory
130 Prepaid Insurance
157 Equipment
201 Accounts Payable
306 Owner's Drawings
505 Cost of Goods Sold

On October 1, the accounts payable ledger of Reineke Company showed the following balances: Uggla Company $2,700, Orr Co. $2,500, Rosenthal Co. $1,800, and Clevenger Company $3,700. The October transactions involving the payment of cash were as follows.

Oct. 1Purchased merchandise, check no. 63, $300.
3Purchased equipment, check no. 64, $800.
5Paid Uggla Company balance due of $2,700, less 2% discount, check no. 65, $2,646.
10Purchased merchandise, check no. 66, $2,550.
15Paid Rosenthal Co. balance due of $1,800, check no. 67.
16Reineke, the owner, pays his personal insurance premium of $400, check no. 68.
19Paid Orr Co. in full for invoice no. 610, $2,000 less 2% discount, check no. 69, $1,960.
29Paid Clevenger Company in full for invoice no. 264, $2,500, check no. 70.

Instructions

  1. Journalize the transactions above in a four-column cash payments journal with columns for Other Accounts Dr., Accounts Payable Dr., Inventory Cr., and Cash Cr. Foot and cross-foot the Journal.
  2. Insert the beginning balances in the Accounts Payable control and subsidiary accounts, and post the October transactions to these accounts.
  3. Prove the agreement of the control account and subsidiary account balances.

The chart of accounts of LR Company includes the following selected accounts.
112 Accounts Receivable
120 Merchandise Inventory
126 Supplies
157 Equipment
201 Accounts Payable
401 Sales
412 Sales Returns and Allowances
505 Cost of Goods Sold
610 Advertising Expense

In July the following selected transactions were completed. All purchases and sales were on account. The cost of all merchandise sold was 70% of the sales price.

July 1Purchased merchandise from Eby Company $8,000.
2Received freight bill from Shaw Shipping on Eby purchase $400
3Made sales to Fort Company $1,300 and to Hefner Bros. $1,500.
5Purchased merchandise from Getz Company $3,200.
8Received Credit on merchandise returned to Getz Company $300.
13Purchased store supplies from Dayne Supply $720.
15Purchased merchandise from Eby Company $3,600 and from Bosco Company $4,300.
16Made sales to Aybar Company $3,450 and to Hefner Bros. $1,870.
18Received bill for advertising from Welton Advertisements $600.
21Sales were made for Fort Company $310 and to Duncan Company $2,800.
22Granted allowance to Fort Company for merchandise damaged in shipment $40.
24Purchased merchandise from Getz Company $3,000.
26Purchased equipment from Dayne Supply $900.
28Received freight bill from Shaw Shipping on Getz purchased of July 24, $380.
30Sales were made to Aybar Company $5,600.

Instructions

  1. Journalize the transactions above in a purchased journal, a sales journal, and a general journal. The purchases journal should have the following column headings: Date, Account Credited (Debited), Ref., Accounts Payable Cr., Inventory Dr., and Other Accounts Dr.
  2. Post to both the general and subsidiary ledger accounts. (Assume that all accounts have zero beginning balances.)
  3. Prove the agreement of the control and subsidiary accounts.

Selected accounts from the chart of accounts of Mercer Company are shown below
101 Cash
112 Accounts Receivable
120 Inventory
126 Supplies
157 Equipment
201 Accounts Payable
401 Sales
412 Sales Returns and Allowances
414 Sales Discounts
505 Cost of Goods Sold
726 Salaries and Wages Expense

The cost of all merchandise sold was 60% of the sales price. During January, Mercer completed the following transactions.

Jan. 3Purchased merchandise on account to from Gallagher Co. $9,000.
4Purchased supplies for cash $80.
4Sold merchandise on account to Wheeler $5,250, invoice no. 371, terms 1/10, n/30
5Returned $300 worth of damaged goods purchased on account from Gallagher Co. on January 3.
6Made cash sales for the week totaling $3,150.
8Purchased merchandise on account from Phegle Co. $4,500.
9Sold merchandise on account to Linton Corp. $5,400, Invoice no. 372, terms 1/10, n/30.
11Purchased merchandise on account from Cora Co. $3,700.
13Paid in full Gallagher Co. on account less a 2% discount.
13Made cash sales for the week totaling $6,260.
15Received payment from Linton Corp. for invoice no. 372.
15Paid semi-monthly salaries of $14,300 to employees.
17Received payment from Wheeler for invoice no. 371.
17Sold merchandise on account to Delaney Co. $1,200, invoice no. 373, terms 1/10, n/30.
19Purchased equipment on account from Dozier Corp. $5,500.
20 Cash Sales for the week totaled $3,200.
20Paid in full Phegley Co. on account less a 2% discount.
23Purchased merchandise on account from Gallagher Co. $7,800.
24Purchased merchandise on account from Atchison Corp. $5,100.
27Made cash sales for the week totaling $4,230.
30Received payment from Delaney Co. for invoice no. 373.
31Paid semi-monthly salaries of $13,200 to employees.
31Sold merchandise on account to wheeler $9,330, invoice no. 374, terms 1/10, n/30
Mercer Company uses the following journals
  1. Sales journal.
  2. Single-column purchases journal.
  3. Cash receipts journal with columns for cash Dr., Sales Discounts Dr., Accounts Receivable Cr., Sales Revenue Cr., Other Accounts Cr., Cost of Goods Sold Dr., and Inventory Cr.
  4. Cash payments journal with columns for Other Accounts Cr., Accounts Payable Dr., Inventory Cr., and Cash Cr.
  5. General journal.

Instructions

Using the selected accounts provided:
  1. Record the January transactions in the appropriate journal noted
  2. Foot and cross-foot all special journals.
  3. Show how postings would be made by placing ledger account numbers and check-marks as needed in the journals. (Actual posting to ledger accounts is not required.)

Presented below are the purchases and cash payments journals for Fornelli Co. for the first month of operations
In addition, the following transactions have not been journalized for July. The cost of all merchandise sold was 65% of the sales price.
July 1The founder, N. Fornelli, invests $80,000 in cash.
6Sell merchandise on account to Dow Co. $6,200 terms 1/10, n/30.
7Make cash sales totaling $8,000
8Sell merchandise on account to S. Goebel $4,600, terms 1/10, n/30.
10Sell merchandise on account to W. Leiss $4,900, terms 1/10, n/30.
13Receive payment in full from S. Goebel
16Receive payment in full from W. Leiss
20Receive payment in full from Dow Co.
21Sell merchandise on account to H. Kenney $5,000, terms 1/10, n/30.
29Returned damaged goods to N. Alvarado and received cash refund of $420.

Instructions

  1. Open the following accounts in the general ledger
    101 Cash
    112 Accounts Receivable
    120 Merchandise Inventory
    126 Supplies
    131 Prepaid Rent
    201 Accounts Payable
    301 Owner's Capital
    306 Owner's Drawings
    401 Sales Revenue
    414 Sales Discounts
    505 Cost of Goods Sold
    631 Supplies Expense
    729 Rent Expense
  2. Journalize the transactions that have not been journalized in the sales journal and the cash receipts journal.
  3. Post to the accounts receivable and accounts payable subsidiary ledgers. Follow the sequence of transactions as shown in the problem.
  4. Post the individual entries and totals to the general ledger.
  5. Prepare a trial balance at July 31, 2020
  6. Determine whether the subsidiary ledgers agree with the control accounts in the general ledger.
  7. The following adjustments at the end of July are necessary.
    1. A count of supplies indicates that $140 is still on hand.
    2. Recognize rent expense for July, $500.
    Prepare the necessary entries in the general journal. Post the entries to the general ledger.
  8. Prepare an adjusted trial balance at July 31, 2020

The post-closing trial balance for Horner Co. is shown below.
HORNER CO.
Post-Closing Trial Balance
December 31, 2019.
The subsidiary ledgers contain the following information: (1) accounts receivable - B. Hannigan $2,500, I. Kirk $7,500, and T. Hodges $5,000, (2) accounts payable - T. Igawa $12,000, D Danford $18,000, and K.Thayer $13,000. The cost of all merchandise sold was 60% of the sales price.

The transactions for January 2010 are as follows

Jan. 3Sell merchandise to M. Ziesmer $8,000, terms 2/10, n/30..
5Purchase merchandise from E. Pheatt $2,000, terms 2/10, n/30.
7Receive a check from T. Hodges $3,500.
11Pay freight on merchandise purchased $300.
12Pay rent of $1,000 for January.
13Receive payment in full from M. Ziesmer.
14Post all entries to the subsidiary ledgers. Issued credit of $300 to B. Hannigan for returned merchandise.
15Send K. Thayer a check for $12,870 in full payment of account, discount $130.
17Purchase merchandise from G. Roland $1,600, terms 2/10, n/30.
18Pay sales salaries of $2,800 and office salaries $2,000.
20Give D. Danford a 60-day note for $18,000 in full payment of account payable.
23Total cash sales amount to $9,100.
24Post all entries to the subsidiary ledgers. Sell merchandise on account to I. Kirk $7,400, terms 1/10, n/30.
27Send E. Pheatt a check for $950.
29Receive payment on a note of $40,000 from B. Stout.
30Post all entries to the subsidiary legers. Return merchandise of $300 to G. Roland for credit.

Instructions

  1. Open general and subsidiary ledger accounts for the following.
    101 Cash
    112 Accounts Receivable
    115 Notes Receivable
    120 Merchandise Inventory
    157 Equipment
    158 Accumulated Depreciation-Equipment
    200 Notes Payable
    201 Accounts Payable
    301 Owner's Capital
    401 Sales Revenue
    412 Sales Returns and Allowances
    414 Sales Discounts
    505 Cost of Goods Sold
    726 Salaries and Wages Expense
    729 Rent Expense
  2. Record the January transactions in a sales journal, a single-column purchases journal, a cash receipts journal, a cash payments journal, and a general journal.
  3. Post the appropriate amounts to the general ledger.
  4. Prepare a trial balance at January 31, 2020
  5. Determine whether the subsidiary ledgers agree with controlling accounts in the general ledger.

Nex Company uses both special journals and a general journal. On June 30, after all monthly postings had been completed, the Accounts Receivable control account in the general ledger had a debit balance of $340,000, the Accounts Payable control account had a credit balance of $77,000.

The July transactions recorded in the special journals are summarized below. No entries affecting accounts receivable and accounts payable were recorded in the general journal for July.
Sales journalTotal sales $161,400
Purchases journalTotal purchases $66,400
Cash receipts journalAccounts receivable column total $131,000
Cash payments journalAccounts payable column total $47,500

Instructions

  1. What is the balance of the Accounts Receivable control account after the monthly postings on July 31?
  2. What is the balance of the Accounts Payable control account after the monthly postings on July 31?
  3. To what account(s) is the column total of $161,400 in the sales journal posted?
  4. To what account(s) is the accounts receivable column total of $131,000 in the cash receipts journal posted?

Solution

Presented below is the subsidiary accounts receivable account of Jill Longley.

Instructions

-----Write a memo to Sara Fogelman, chief financial officer, that explains each transaction.

On September 1, the balance of the accounts Receivable control account in the general ledger of Montgomery company was $10,960. The customers' subsidiary ledger contained account balance as follows: Hurley $1,440, Andino $2,640, Fowler $2,060, and Sogard $4,820. At the end of September, the various journals contained the following information.

Sales journal: Sales to Sogard $800, to Hurley $1,260, to Giambi $1,330, and to Fowler $1,600

Cash Receipt journal: Cash received from Fowler $1,310, from Sogard $3,300, from Giami $380, from Andino $1,800, and from Hurley $1,240.

General Journal journal: An allowance is granted to Sogard $220.

Instructions

  1. Set up control and subsidiary accounts and enter the beginning balances. Do not construct the journals
  2. Post the various journals. Post the items as individual items or as totals, whichever would be the appropriate procedure. (No sales discounts given.)
  3. Prepare a schedule of accounts receivable and prove the agreement of the controlling account with the subsidiary ledger at September 30, 2019.

Solution

a.
Montgomery company
General Ledger
 
b.
Montgomery company
General Ledger
 
c.
Montgomery company
Schedule of Customers and Proof of Agreement
As of September 30, 2019
Kieschnick company has a balance in its Account Receivable control account of $10,000 on January 1,2017. The subsidiary ledger contains there accounts: Bixler company, balance $4,000; Cuddyer company, balance $2,500; and Freeze Company. During January, the following receivable related transactions occurred.
 Credit SalesCollectionsReturns
Bixler Company$9,000$8,000$-0-
Cuddyer Company7,0002,500$3,000
Freeze Company8,5009,000$-0-

Instructions

  1. What is the January 1 balance in the Freeze company subsidiary account?
  2. What is the January 31 balance in the control account?
  3. Compute the balances in the subsidiary accounts at the end of the month.
  4. Which January transaction would not be recorded in a special Journal?

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