Accounting Information Systems

Problem-6: Accounting Information Systems

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.

Solution

a.
Horner Co.
General Ledger and Subsidiary Accounts
 
b.
Horner Co.
 
Horner Co.
 
Horner Co.
 
Horner Co.
 
Horner Co.
 
c.
Horner Co.
General Ledger
d.
Horner Co.
Trial Balance
January 31, 2020
e.
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