Sept. 2. Issued Invoice No. 793 to Nickle Co., $5,200.
5. Received cash from Mendez Co. for the balance owed on its account.
6. Issued Invoice No. 794 to Rahal Co., $2,140.
13. Issued Invoice No. 795 to Shilo Co., $3,420.
Post revenue and collections to the accounts receivable subsidiary ledger.
15. Received cash from Rahal Co. for the balance owed on September 1.
16. Issued Invoice No. 796 to Rahal Co., $6,000.
Post revenue and collections to the accounts receivable subsidiary ledger.
19. Received cash from Nickle Co. for the balance due on invoice of September 2.
20. Received cash from Rahal Co. for invoice of September 6.
22. Issued Invoice No. 797 to Mendez Co., $7,590.
25. Received $2,500 note receivable in partial settlement of the balance due on the Shilo Co. account.
30. Recorded cash fees earned, $11,970.
Post revenue and collections to the accounts receivable subsidiary ledger.
Instructions
1. Insert the following balances in the general ledger as of September 1:
11 Cash $11,350
12 Accounts Receivable 14,340
14 Notes Receivable 6,000
41 Fees Earned —
2. Insert the following balances in the accounts receivable subsidiary ledger as of September 1:
Mendez Co. $8,230
Nickle Co. —
Rahal Co. 6,110
Shilo Co. —
3. Prepare a single-column revenue journal (p. 40) and a cash receipts journal (p. 36). Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. The Fees Earned column is used to record cash fees. Insert a check mark () in the Post. Ref. column when recording cash fees.
4. Using the two special journals and the two-column general journal (p. 1), journalize the transactions for September. Post to the accounts receivable subsidiary ledger, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customer’s account before recording a cash receipt.
5. Total each of the columns of the special journals, and post the individual entries and totals to the general ledger. Insert account balances after the last posting.
6. Determine that the sum of the customer balances agrees with the accounts receivable controlling account in the general ledger.
7. Why would an automated system omit postings to a controlling account as performed in step 5 for Accounts Receivable?
Answer:
1. and 5.
Account: Cash
GENERAL LEDGER
Account No. 11
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Sept. 1 Balance √ 11,350
30 CR36 33,650 45,000
Account: Accounts Receivable Account No. 12
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Sept. 1 Balance √ 14,340
25 J1 2,500 11,840
30 R40 24,350 36,190
30 CR36 21,680 14,510
Account: Notes Receivable Account No. 14
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Sept. 1 Balance √ 6,000
25 J1 2,500 8,500
Account: Fees Earned Account No. 41
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Sept. 30 R40 24,350 24,350
30 CR36 11,970 36,320
2. and 4.
Name:
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Mendez Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Sept. 1 Balance √ 8,230
5 CR36 8,230 —
22 R40 7,590 7,590
Name: Nickle Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Sept. 2 R40 5,200 5,200
19 CR36 5,200 —
Name: Rahal Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Sept. 1 Balance √ 6,110
6 R40 2,140 8,250
15 CR36 6,110 2,140
16 R40 6,000 8,140
20 CR36 2,140 6,000
Name: Shilo Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Sept. 13 R40 3,420 3,420
25 J1 2,500 920
3., 4., and 5.
REVENUE JOURNAL Page 40
Date
Invoice
No. Account Debited
Post.
Ref.
Accounts Rec. Dr.
Fees Earned Cr.
2014
Sept. 2 793 Nickle Co. √ 5,200
6 794 Rahal Co. √ 2,140
13 795 Shilo Co. √ 3,420
16 796 Rahal Co. √ 6,000
22 797 Mendez Co. √ 7,590
30 24,350
(12) (41)
CASH RECEIPTS JOURNAL Page 36
Date Account Credited
Post.
Ref.
Fees
Earned
Cr.
Accts.
Rec.
Cr.
Cash
Dr.
2014
Sept. 5 Mendez Co. √ 8,230 8,230
15 Rahal Co. √ 6,110 6,110
19 Nickle Co. √ 5,200 5,200
20 Rahal Co. √ 2,140 2,140
30 Fees Earned 11,970 11,970
30 11,970 21,680 33,650
(41) (12) (11)
JOURNAL Page 1
Date Description
Post.
Ref. Debit Credit
2014
Sept. 25 Notes Receivable 14 2,500
Accounts Receivable—Shilo Co. 12/√ 2,500
The subsidiary account of Shilo Co. must also be posted for a $2,500 credit.
6. The sum of the customer balances is in agreement with the controlling account. Both
have balances of $14,510 ($7,590 + $6,000 + $920).
7. In an automated system, individual sales transactions are posted automatically
to the general ledger at the time of the original transaction. Thus, there is no
need to post summary totals to the general ledger accounts. The accounts
receivable account reported on the balance sheet is often merely the sum of
the individual customer accounts.