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Problem 7-1A Special journals, subsidiary ledgers, trial balance LO P1, P2, P3, P4

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Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 1/10, n/30).

Mar.		1			Purchased $33,000 of merchandise from Van Industries, terms 1/15, n/30.
		2			Sold merchandise on credit to Min Cho, Invoice No. 854, for $13,200 (cost is $6,600).
		3		(a)	Purchased $990 of office supplies on credit from Gabel Company, terms n/30.
		3		(b)	Sold merchandise on credit to Linda Witt, Invoice No. 855, for $6,600 (cost is $3,300).
		6			Borrowed $72,000 cash from Federal Bank by signing a long-term note payable.
		9			Purchased $16,500 of office equipment on credit from Spell Supply, terms n/30.
		10			Sold merchandise on credit to Jovita Albany, Invoice No. 856, for $3,300 (cost is $1,650).
		12			Received payment from Min Cho for the March 2 sale less the discount of $132.
		13		(a)	Sent Van Industries Check No. 416 in payment of the March 1 invoice less the discount of $330.
		13		(b)	Received payment from Linda Witt for the March 3 sale less the discount of $66.
		14			Purchased $29,000 of merchandise from the CD Company, terms 1/10, n/30.
		15		(a)	Issued Check No. 417 for $16,900, payee is Payroll, in payment of sales salaries expense for the first half of the month.
		15		(b)	Cash sales for the first half of the month are $52,800 (cost is $42,240). These cash sales are recorded in the cash receipts journal on March 15.
		16			Purchased $1,510 of store supplies on credit from Gabel Company, terms n/30.
		17			Returned $2,900 of unsatisfactory merchandise purchased on March 14 to CD Company. Church reduces accounts payable by that amount.
		19			Returned $495 of office equipment purchased on March 9 to Spell Supply. Church reduces accounts payable by that amount.
		20			Received payment from Jovita Albany for the sale of March 10 less the discount of $33.
		23			Issued Check No. 418 to CD Company in payment of the March 14 purchase less the March 17 return and the $261 discount.
		27			Sold merchandise on credit to Jovita Albany, Invoice No. 857, for $9,900 (cost is $3,960).
		28			Sold merchandise on credit to Linda Witt, Invoice No. 858, for $3,960 (cost is $1,584).
		31		(a)	Issued Check No. 419 for $16,900, payee is Payroll, in payment of sales salaries expense for the last half of the month.
		31		(b)	Cash sales for the last half of the month are $58,080 (cost is $34,848). These cash sales are recorded in the cash receipts journal on March 31.
		31		(c)	Verify that amounts impacting customer and creditor accounts were posted and that any amounts that should have been posted as individual amounts to the general ledger accounts were posted. Foot and crossfoot the journals and make the month-end postings.

Assume the following ledger account amounts Inventory (March 1 beg. bal. is $61,000), Z. Church, Capital (March 1 beg. bal. is $61,000) and Church Company uses the perpetual inventory system.

Problem 7-1A Part 2

Required:
2-a. Enter the transactions in a sales journal.
2-b. Enter the transactions in a purchases journal.
2-c. Enter the transactions in a cash receipts journal.
2-d. Enter the transactions in a cash payments journal.
2-e. Enter the transactions in a general journal.

Answer 1

2-a.

SALES JOURNAL
Date	Account Debited	Invoice Number	Accounts Receivable Dr. Sales Cr.	Cost of Goods Sold Dr. Inventory Cr.
Mar. 2	Min Cho	854	13200	6600
Mar. 3	Linda Witt	855	6600	3300
Mar. 10	Jovita Albany	856	3300	1650
Mar. 27	Jovita Albany	857	9900	3960
Mar. 28	Linda Witt	858	3960	1584
Mar. 31	Totals		36960	17094

2-b.

PURCHASES JOURNAL
Date	Account	Date of Invoice	Terms	Accounts Payable Cr.	Inventory Dr.	Office Supplies Dr.	Other Accounts Dr.
Mar. 1	Van Industries	Mar. 1	1/15, n/30	33000	33000
Mar. 3	Gabel Company	Mar. 3	n/30	990		990
Mar. 9	Spell Supply	Mar. 9	n/30	16500			16500
Mar. 14	CD Company	Mar. 14	1/10, n/30	29000	29000
Mar. 16	Gabel Company	Mar. 16	n/30	1510			1510
Mar. 31	Totals			81000	62000	990	18010

2-c.

CASH RECEIPTS JOURNAL
Date	Account Credited	Cash Dr.	Sales Discount Dr.	Accounts Receivable Cr.	Sales Cr.	Other Accounts Cr.	Cost of Goods Sold Dr. Inventory Cr.
Mar. 6	Note payable	72000				72000
Mar. 12	Min Cho	13068	132	13200
Mar. 13	Linda Witt	6534	66	6600
Mar. 15	Sales	52800			52800		42240
Mar. 20	Jovita Albany	3267	33	3300
Mar. 31	Sales	58080			58080		34848
Mar. 31	Totals	205749	231	23100	110880	72000	77088

2-d.

CASH PAYMENTS JOURNAL
Date	Ck. No.	Payee	Account Debited	Cash Cr.	Inventory Cr.	Other Accounts Dr.	Accounts Payable Dr.
Mar. 13	416	Van Industries	Accounts payable	32670	330		33000
Mar. 15	417	Payroll	Sales salaries expense	16900		16900
Mar. 23	418	CD Company	Accounts payable	25839	261		26100
Mar. 31	419	Payroll	Sales salaries expense	16900		16900
Mar. 31		Totals		92309	591	33800	59100

2-e.

Date	General Journal	Debit	Credit
Mar. 17	Accounts payable-CD Company	2900
	Inventory		2900
	(To record merchandise returned)
Mar. 19	Accounts payable-Spell Supply	495
	Office equipment		495
	(To record office equipment returned)