Question

This company uses the perpetual system of inventory.

Check for these figures.

Cash Receipts Journal, total Cash DR: $68,094

Cash Payments Journal, total Cash CR: $62,185

Net Income: $19,351

Total Assets: $143,246

Total Post Closing Trial Balance: $144,871

Colorado Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidary ledger. Balances related to both the general ledger and the subsidary ledger for Colorado Co. are indicated in the working paper. Below are a series of transactions for the company for the month of January. Credit sales terms are 2/10, n/30. The cost of the merchandise sold was 62% of the sales price.

(Jan. 3) Sell merchandise on account to B. Richey $2,900, invoice no. 510, and to J. Forbes $1,800, invoice no. 511

(Jan. 5) Purchase merchandise from S. Vogel $5,000 and D. Lynch $2,200, terms n/30

(Jan. 7) Receive checks from S. Ladew $4000 and B. Garcia $2,000 after discount perios has lapsed.

(Jan. 8) Pay freight on merchandise purchased $235

(Jan. 9) Send checks to S. Hoyt for $9,000 less 2% cash discount, and to D. Omara for $11,000 less 1% cash discount.

(Jan. 9) Issue credit of $300 to J. Forbes for merchandise returned

(Jan. 10) Summary daily cash sales total $15,500

(Jan. 11) Sell merchandise on account to R. Dvorak $1,600, invoice no. 512, and to S. Ladew $900, invoice no. 513

(Jan. 12) Pay rent of $1000 for January.

(Jan. 13) Receive payment in full from B. Richey and J.Forbes less cash discounts.

(Jan. 15) Withdrawal of $800 cash by J. Colorado for her personal use.

(Jan. 15) Post all entries to the subsidary ledgers.

(Jan 16.) Purchase merchandise from D. Omara $18,000, terms 1/10, n/30; S. Hoyt $14,200, terms 2/10, n/30; and S. Vogel $1,500, terms n/30

(Jan. 17) Pay $600 cash for office supplies.

(Jan. 18) Return $200 of merchandise to S. Hoyt and receive credit.

(Jan. 20) Summary daily cash sales total $20,100.

(Jan. 21) Issue $15,000 note, maturing in 90 days, to R. Moses in payment of balance due.

(Jan. 21) Receive payment in full from S. LaDew less cash discount

(Jan. 22) Sell merchandise on account to B. Richey $2,700, invoice no. 514, and to R. Dvorak $2,800, invoice no. 517.

(Jan. 22) Post all entries to the subsidary ledgers.

(Jan. 23) Send checks to D. Omara and S. Hoyt in full payment less cash discount.

(Jan. 25) Sell merchandise on account to B. Garcia $3,500, invoice no. 516, and to J. Forbes $6,100, invoice no. 517.

(Jan. 27) Purchase merchandise from D. Omara $14,500, terms 1/10, n/30; D Lynch $1,200, terms n/30; and S. Vogel $5,400, terms n/30

(Jan. 27) Post all entries to the subsidary ledgers

(Jan. 28) Pay $200 cash for office supplies

(Jan. 31) Summary daily cash sales total $21,300.

(Jan. 31) Pay total salaries of $8,100.

Instructions

(a) Record the January transactions in a Sales Journal, a single-column Purchases Journal, a Cash Receipts Journal, a Cash Payments Journal, and a two- column General Journal.

(b) Post the journals to the General Ledger

(c) Prepare a Trial Balance at January 31, 2018, in the Trial Balance columns of the worksheet. Complete the worksheet using the following additional information.

1. Office supplies at January 31 total $750

2. Insurance coverage expires on October 31, 2018

3. Annual depreciation on equipment is $1,500.

4. Interest of $50 has accrued on the note payable.

(d) Prepare a multiple-step Income Statement an on Owner's Equity Statement for January and a Classified Balance Sheet at the end of January.

(e) Prepare and post adjusting and closing entries.

(f) Prepare a Post-Closing Trial Balance, and determine whether the subsidary ledgers agree with the control accounts in the General Ledger.

Answer 1

SALES JOURNAL JAN
DATE	DETAILS	INV NO.
JAN 3	B RICHLEY	510	2900
	J FORBES	511	1800
JAN 11	R DVORAK	512	1600
	S LADEW	513	900
JAN 22	RICHLEY	514	2700
	DVORAK	515	2800
JA31N	GARCIA	516	3500
	FORBES	517	6100
			22300

PURCHASE JOURNAL
DATE	DETAILS
JAN 5	S VOGEL	5000
	D LYNCH	2200
JAN 16	D OMARA	18000
	S HOYT	14200
	VOGEL	1500
JAN 27	OMARA	14500
	D LYNCH	1200
	S VOGEL	5400
		62000

CASH RECEIPTS JOURNAL
DATE	DETAILS
JAN 7	S LADEW		4000
	B GARCIA		2000
JAN 10	CASH SALES		15500
JAN 12	RENT JAN		1000
JAN 13	B RICHLEY	58	2842
JAN 13	J FORBES	32	1568
JAN 22	LADEW	18	882
JAN 31	SALES		21300
		108	49092

CASH PAYMENTS JOURNAL
DATE	DETAILS
JAN 8	FREIGHT		235
JAN 9	S HOYT	180	8820
	D OMARA	110	10890
JAN 15	DRAWINGS		800
JAN 16	OFFICE SUPPLIES		600
JAN 23	OMARA	1800	16200
JAN 23	HOYT	284	13916
JAN 28	OFFICE SUPPLIES		200
JAN 31	SALARIES		8100
		2084	59761

GENERAL JOURNAL
DATE	DETAILS	DEBIT $	CREDIT $
JAN 9	SALES RETURNS	300
	ACC REC - J FORBES		300
JAN 18	ACC PAYABLE S HOIYT	200
	PURCHASE RETURN		200

SUBSIDIARY LEDGERS

ACCOUNTS RECEIVABLE

RICHLEY
DATE	DETAILS	$	DATE	DETAILS	$
JAN    15	SALES #510	2900	JAN 13	CASH	2842
JAN 22	SALES # 514	2700	JAN 13	DIS ALL	58

FORBES
DATE	DETAILS	$	DATE	DETAILS	$
JAN 15	SALES #511	1800	JAN 15	SALES RETURN	200
JAN 22			JAN 13	CASH	1568
	SALES # 517	6100	JAN 13	DIS ALL	32

DVORAK
DATE	DETAILS	$	DATE	DETAILS	$
JAN 15	SALES #512	1600
	SALES # 515	2800

LADEW
DATE	DETAILS	$	DATE	DETAILS	$
JAN 1	BAL B/F	4000	JAN 15	CASH RECEIPT	4000
JAN 15	SALES #513	900	JAN 21	CASH RECEIPT	882
				DIS ALLED	18

GARCIA
DATE	DETAILS	$	DATE	DETAILS	$
JAN 1	BAL B/F	2000	JAN 15	CASH RECEIPT	2000
	SALES INV # 516	3500

ACCOUNTS PAYABLE

VOGEL
DATE	DETAILS	$	DATE	DETAILS	$
JAN 5			JAN 15	PURCHASES	5000
			27	PURCHASES	5400

LYNCH
DATE	DETAILS	$	DATE	DETAILS	$
JAN 5			JAN 15	PURCHASES	2200
			27	PURCHASES	1200

D OMARA
DATE	DETAILS	$	DATE	DETAILS	$
JAN 15	CASH PAID	10890	JAN 1	BAL B/F	11000
	DIS RECD	110	27	PURCHSES	14500
JAN 23	CASH PAID	16800
	DIS RECD	1800

HOIYT
DATE	DETAILS	$	DATE	DETAILS	$
JAN 5	CASH PAID	8820	JAN 1	BAL B/F	9000
	DIS RECD	180
JAN 16	PURCHASE RETURN	200
JAN 23	CASH PAID	13916
	DIS RECD	284
R MOSES
DATE	DETAILS	$	DATE	DETAILS	$
JAN 21	NOTES PAYABLE	15000	JAN 1	BAL B/F	15000

GENERAL LEDGER

NOTE PAYABLE
DATE	DETAILS	$	DATE	DETAILS	$
			JAN 21	R MOSES	15000
			JAN 31	INTEREST	50

OFFICE SUPPLIES
DATE	DETAILS	$	DATE	DETAILS	$
JAN 31	B/F	750
	CASH	600
	CASH	200
		1550

DEPRECIATION EQUIP
DATE	DETAILS	$	DATE	DETAILS	$
JAN 31	DEP PROV	1500

INTEREST ON NOTE PAYABLE
DATE	DETAILS	$	DATE	DETAILS	$
JAN 31	NOTE PAYABE	50