PR 5-5B All journals and general ledger; trial balance

The transactions completed by AM Express Company during March 2014, the first month of the fiscal year, were as follows:

Mar. 1. Issued Check No. 205 for March rent, $2,450.
 2. Purchased a vehicle on account from McIntyre Sales Co., $26,900.
 3. Purchased office equipment on account from Office Mate Inc., $1,570.
 5. Issued Invoice No. 91 to Ellis Co., $7,000.
 6. Received check for $7,950 from Chavez Co. in payment of invoice.
 7. Issued Invoice No. 92 to Trent Co., $9,840.
 9. Issued Check No. 206 for fuel expense, $820.
10. Received check for $10,000 from Sajeev Co. in payment of invoice.
10. Issued Check No. 207 to Office City in payment of $450 invoice.

Mar. 10. Issued Check No. 208 to Bastille Co. in payment of $1,890 invoice.
11. Issued Invoice No. 93 to Jarvis Co., $7,200.
11. Issued Check No. 209 to Porter Co. in payment of $415 invoice.
12. Received check for $7,000 from Ellis Co. in payment of March 5 invoice.
13. Issued Check No. 210 to McIntyre Sales Co. in payment of $26,900 invoice of March 2.
16. Cash fees earned for March 1–16, $26,800.
16. Issued Check No. 211 for purchase of a vehicle, $28,500.
17. Issued Check No. 212 for miscellaneous administrative expense, $4,680.
18. Purchased maintenance supplies on account from Bastille Co., $2,430.
18. Received check for rent revenue on office space, $900.
19. Purchased the following on account from Master Supply Co.: maintenance supplies, $2,640, and office supplies, $1,500.
20. Issued Check No. 213 in payment of advertising expense, $8,590.
20. Used maintenance supplies with a cost of $4,400 to repair vehicles.
21. Purchased office supplies on account from Office City, $990.
24. Issued Invoice No. 94 to Sajeev Co., $9,200.
25. Received check for $14,000 from Chavez Co. in payment of invoice.
25. Issued Invoice No. 95 to Trent Co., $6,300.
26. Issued Check No. 214 to Office Mate Inc. in payment of $1,570 invoice of March 3.
27. Issued Check No. 215 to J. Wu as a personal withdrawal, $4,000.
30. Issued Check No. 216 in payment of driver salaries, $33,300.
31. Issued Check No. 217 in payment of office salaries, $21,200.
31. Issued Check No. 218 for office supplies, $600.
31. Cash fees earned for March 17–31, $29,400.


Instructions
1. Enter the following account balances in the general ledger as of March 1:


11 Cash $ 65,200 32 J. Wu, Drawing —
12 Accounts Receivable 31,950 41 Fees Earned —
14 Maintenance Supplies 7,240 42 Rent Revenue —
15 Office Supplies 3,690 51 Driver Salaries Expense —
16 Office Equipment 17,300 52 Maintenance Supplies Expense —
17 Accum. Depr.—Office Equip. 4,250 53 Fuel Expense —
18 Vehicles 62,400 61 Office Salaries Expense —
19 Accum. Depr.—Vehicles 17,800 62 Rent Expense —
21 Accounts Payable 2,755 63 Advertising Expense —
31 J. Wu, Capital 162,975 64 Miscellaneous Administrative Exp. —


2. Journalize the transactions for March 2014, using the following journals similar to those illustrated in this chapter: single-column revenue journal (p. 35), cash receipts journal (p. 31), purchases journal (p. 37, with columns for Accounts Payable, Maintenance Supplies, Office Supplies, and Other Accounts), cash payments journal (p. 34), and two-column general journal (p. 1). Assume that the daily postings to the individual accounts in the accounts payable subsidiary ledger and the accounts receivable subsidiary ledger have been made.

3. Post the appropriate individual entries to the general ledger.

4. Total each of the columns of the special journals, and post the appropriate totals to the general ledger; insert the account balances.

5. Prepare a trial balance.


Answer:













1., 3., and 4.
Account: Cash
GENERAL LEDGER
Account No. 11
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 Balance √ 65,200
31 CR31 96,050 161,250
31 CP34 135,365 25,885
Account: Accounts Receivable Account No. 12
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 Balance √ 31,950
31 R35 39,540 71,490
31 CR31 38,950 32,540
Account: Maintenance Supplies Account No. 14
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 Balance √ 7,240
20 J1 4,400 2,840
31 P37 5,070 7,910
Account: Office Supplies
Account: Office Equipment
Account No. 15
Account No. 16
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 Balance √ 17,300
3 P37 1,570 18,870
Account: Accumulated Depreciation—Office Equipment Account No. 17
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 Balance √ 4,250
Account: Vehicles Account No. 18
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 Balance √ 62,400
2 P37 26,900 89,300
16 CP34 28,500 117,800
Account: Accumulated Depreciation—Vehicles Account No. 19
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 Balance √ 17,800
Account: Accounts Payable Account No. 21
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 Balance √ 2,755
31 P37 36,030 38,785
31 CP34 31,225 7,560
Account: J. Wu, Capital Account No. 31
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 Balance √ 162,975
Account: J. Wu, Drawing Account No. 32
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 27 CP34 4,000 4,000
Account: Fees Earned Account No. 41
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 16 CR31 26,800 26,800
31 CR31 29,400 56,200
31 R35 39,540 95,740
Account: Rent Revenue Account No. 42
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 18 CR31 900 900
Account: Driver Salaries Expense Account No. 51
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 30 CP34 33,300 33,300
Account: Maintenance Supplies Expense Account No. 52
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 20 J1 4,400 4,400
Account: Fuel Expense Account No. 53
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 9 CP34 820 820
Account: Office Salaries Expense Account No. 61
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 31 CP34 21,200 21,200
Account: Rent Expense Account No. 62
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 1 CP34 2,450 2,450
Account: Advertising Expense
Account: Miscellaneous Administrative Expense
Account No. 63
Account No. 64
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Mar. 17 CP34 4,680 4,680
2. and 4.
PURCHASES JOURNAL Page 37
Date Account Credited
Post.
Ref.
Accounts
Payable
Cr.
Maintenance
Supplies Dr.
Office
Supplies
Dr.
Other
Accounts
Dr.
Post.
Ref. Amount
2014
Mar. 2 McIntyre Sales Co. √ 26,900 Vehicles 18 26,900
3 Office Mate Inc. √ 1,570 Office Equipment 16 1,570
18 Bastille Co. √ 2,430 2,430
19 Master Supply Co. √ 4,140 2,640 1,500
21 Office City √ 990 990
31 36,030 5,070 2,490 28,470
(21) (14) (15) (√)
CASH RECEIPTS JOURNAL Page 31
Date Account Credited
Post.
Ref.
Other
Accounts
Cr.
Accounts
Receivable
Cr.
Cash
Dr.
2014
Mar. 6 Chavez Co. √ 7,950 7,950
10 Sajeev Co. √ 10,000 10,000
12 Ellis Co. √ 7,000 7,000
16 Fees Earned 41 26,800 26,800
18 Rent Revenue 42 900 900
25 Chavez Co. √ 14,000 14,000
31 Fees Earned 41 29,400 29,400
57,100 38,950 96,050
(√) (12) (11)
2. and 4.
REVENUE JOURNAL Page 35
Date
Invoice
No. Account Debited
Post.
Ref.
Accounts Rec. Dr.
Fees Earned Cr.
2014
Mar. 5 91 Ellis Co. √ 7,000
7 92 Trent Co. √ 9,840
11 93 Jarvis Co. √ 7,200
24 94 Sajeev Co. √ 9,200
25 95 Trent Co. √ 6,300
31 39,540
(41) (12)
CASH PAYMENTS JOURNAL Page 34
Date
Ck.
No. Account Debited
Post.
Ref.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Cash
Cr.
2014
Mar. 1 205 Rent Expense 62 2,450 2,450
9 206 Fuel Expense 53 820 820
10 207 Office City √ 450 450
10 208 Bastille Co. √ 1,890 1,890
11 209 Porter Co. √ 415 415
13 210 McIntyre Sales Co. √ 26,900 26,900
16 211 Vehicles 18 28,500 28,500
17 212 Misc. Admin. Expense 64 4,680 4,680
20 213 Advertising Expense 63 8,590 8,590
26 214 Office Mate Inc. √ 1,570 1,570
27 215 J. Wu, Drawing 32 4,000 4,000
30 216 Driver Salaries Expense 51 33,300 33,300
31 217 Office Salaries Expense 61 21,200 21,200
31 218 Office Supplies 15 600 600
31 104,140 31,225 135,365
(√) (21) (11)
3. JOURNAL Page 1
Date Description
Post.
Ref. Debit Credit
2014
Mar. 20 Maintenance Supplies Expense 52 4,400
Maintenance Supplies 14 4,400
5.
 AM EXPRESS COMPANY
Unadjusted Trial Balance
March 31, 2014
Debit
Balances
Credit
Balances
Cash 25,885
Accounts Receivable 32,540
Maintenance Supplies 7,910
Office Supplies 6,780
Office Equipment 18,870
Accumulated Depreciation—Office Equipment 4,250
Vehicles 117,800
Accumulated Depreciation—Vehicles 17,800
Accounts Payable 7,560
J. Wu, Capital 162,975
J. Wu, Drawing 4,000
Fees Earned 95,740
Rent Revenue 900
Driver Salaries Expense 33,300
Office Salaries Expense 21,200
Advertising Expense 8,590
Maintenance Supplies Expense 4,400
Rent Expense 2,450
Fuel Expense 820
Miscellaneous Administrative Expense 4,680
289,225 289,225

PR 5-4B Purchases and cash payments journals; accounts payable subsidiary and general ledgers

West Texas Exploration Co. was established on October 15, 2014, to provide oil-drilling services. West Texas uses field equipment (rigs and pipe) and field supplies (drill bits and lubricants) in its operations. Transactions related to purchases and cash payments during the remainder of October are as follows:

Oct. 16. Issued Check No. 1 in payment of rent for the remainder of October, $7,000.
16. Purchased field equipment on account from Petro Services Inc., $32,600.
17. Purchased field supplies on account from Midland Supply Co., $9,780.
18. Issued Check No. 2 in payment of field supplies, $4,570, and office supplies, $650.
20. Purchased office supplies on account from A-One Office Supply Co., $1,320.
Post the journals to the accounts payable subsidiary ledger.

24. Issued Check No. 3 to Petro Services Inc., in payment of October 16 invoice.
Oct. 26. Issued Check No. 4 to Midland Supply Co. in payment of October 17 invoice.
28. Issued Check No. 5 to purchase land, $240,000.
28. Purchased office supplies on account from A-One Office Supply Co., $3,670.
Post the journals to the accounts payable subsidiary ledger.

30. Purchased the following from Petro Services Inc. on account: field supplies, $25,300 and office equipment, $5,500.
30. Issued Check No. 6 to A-One Office Supply Co. in payment of October 20 invoice.
30. Purchased field supplies on account from Midland Supply Co., $12,450.
31. Issued Check No. 7 in payment of salaries, $32,000.
31. Rented building for one year in exchange for field equipment having a cost of $15,000.

Post the journals to the accounts payable subsidiary ledger

Instructions
1. Journalize the transactions for October. Use a purchases journal and a cash payments journal, similar to those illustrated in this chapter, and a two-column general journal. Set debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:


11 Cash 18 Office Equipment
14 Field Supplies 19 Land
15 Office Supplies 21 Accounts Payable
16 Prepaid Rent 61 Salary Expense
17 Field Equipment 71 Rent Expense




At the points indicated in the narrative of transactions, post to the following subsidiary accounts in the accounts payable ledger:

A-One Office Supply Co.
Midland Supply Co.
Petro Services Inc

2. Post the individual entries (Other Accounts columns of the purchases journal and the cash payments journal; both columns of the general journal) to the appropriate general ledger accounts.

3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger. (Because the problem does not include transactions related to cash receipts, the cash account in the ledger will have a credit balance.)

4. Sum the balances of the accounts payable creditor balances.

5. Why might West Texas consider using a subsidiary ledger for the field equipment?


Answer:










1., 2., and 3.
PURCHASES JOURNAL Page 1
Date Account Credited
Post.
Ref.
Accounts
Payable
Cr.
Field
Supplies
Dr.
Office
Supplies
Dr.
Other
Accounts
Dr.
Post.
Ref. Amount
2014
Oct. 16 Petro Services Inc. √ 32,600 Field Equipment 17 32,600
17 Midland Supply Co. √ 9,780 9,780
20 A-One Office Supply Co. √ 1,320 1,320
28 A-One Office Supply Co. √ 3,670 3,670
30 Petro Services Inc. √ 30,800 25,300 Office Equipment 18 5,500
30 Midland Supply Co. √ 12,450 12,450
31 90,620 47,530 4,990 38,100
(21) (14) (15)
1. and 2.
JOURNAL Page 1
Date Description
Post.
Ref. Debit Credit
2014
Oct. 31 Prepaid Rent 16 15,000
Field Equipment 17 15,000
1., 2., and 3.
CASH PAYMENTS JOURNAL Page 1
Date
Ck.
No. Account Debited
Post.
Ref.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Cash
Cr.
2014
Oct. 16 1 Rent Expense 71 7,000 7,000
18 2 Field Supplies 14 4,570 4,570
Office Supplies 15 650 650
24 3 Petro Services Inc. √ 32,600 32,600
26 4 Midland Supply Co. √ 9,780 9,780
28 5 Land 19 240,000 240,000
30 6 A-One Office Supply Co. √ 1,320 1,320
31 7 Salary Expense 61 32,000 32,000
31 284,220 43,700 327,920
(√) (21) (11)
1.
Name:
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
A-One Office Supply Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Oct. 20 P1 1,320 1,320
28 P1 3,670 4,990
30 CP1 1,320 3,670
Name: Midland Supply Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Oct. 17 P1 9,780 9,780
26 CP1 9,780 —
30 P1 12,450 12,450
Name: Petro Services Inc.
Date Item
Post.
Ref. Debit Credit Balance
2014
Oct. 16 P1 32,600 32,600
24 CP1 32,600 —
30 P1 30,800 30,800
2. and 3.
Account: Cash
GENERAL LEDGER
Account No. 11
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 31 CP1 327,920 327,920
Account: Field Supplies Account No. 14
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 18 CP1 4,570 4,570
31 P1 47,530 52,100
Account: Office Supplies Account No. 15
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 18 CP1 650 650
31 P1 4,990 5,640
Account: Prepaid Rent Account No. 16
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 31 J1 15,000 15,000
Account: Field Equipment Account No. 17
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 16 P1 32,600 32,600
31 J1 15,000 17,600
Account: Office Equipment Account No. 18
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 31 P1 5,500 5,500
Account: Land Account No. 19
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 28 CP1 240,000 240,000
Account: Accounts Payable Account No. 21
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 31 P1 90,620 90,620
31 CP1 43,700 46,920
Account: Salary Expense Account No. 61
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 31 CP1 32,000 32,000
Account: Rent Expense Account No. 71
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Oct. 16 CP1 7,000 7,000
4.
WEST TEXAS EXPLORATION CO.
Accounts Payable Creditor Balances
October 31, 2014
A-One Office Supply Co. $ 3,670
Midland Supply Co. 12,450
Petro Services Inc. 30,800
Total accounts payable* $46,920
* The total of the schedule of accounts payable is equal to the balance of the accounts
payable control account.
5. A subsidiary ledger for the field equipment would allow the company to track
each individual piece of equipment with respect to cost, location, useful life,
and other data. Such information would be useful for safeguarding equipment
and determining depreciation.

PR 5-3B Purchases, accounts payable account, and accounts payable subsidiary ledger

Plumb Line Surveyors provides survey work for construction projects. The office staff use office supplies, while surveying crews use field supplies. Purchases on account completed by Plumb Line Surveyors during May 2014 are as follows:

May 1. Purchased field supplies on account from Wendell Co., $3,240.
3. Purchased office supplies on account from Lassiter Co., $340.
8. Purchased field supplies on account from Tri Cities Supplies, $4,500.
12. Purchased field supplies on account from Wendell Co., $3,670.
15. Purchased office supplies on account from J-Mart Co., $500.
19. Purchased office equipment on account from Accu-Vision Supply Co., $8,150.
23. Purchased field supplies on account from Tri Cities Supplies, $2,450.
26. Purchased office supplies on account from J-Mart Co., $265.
30. Purchased field supplies on account from Tri Cities Supplies, $3,040.

Instructions
1. Insert the following balances in the general ledger as of May 1:


14 Field Supplies $ 6,200
15 Office Supplies 1,490
18 Office Equipment 19,400
21 Accounts Payable 5,145




2. Insert the following balances in the accounts payable subsidiary ledger as of May 1:


Accu-Vision Supply Co. $3,900
J-Mart Co. 730
Lassiter Co. 515
Tri Cities Supplies —
Wendell Co. —




3. Journalize the transactions for May, using a purchases journal (p. 30) similar to the one illustrated in this chapter. Prepare the purchases journal with columns for Accounts Payable, Field Supplies, Office Supplies, and Other Accounts. Post to the creditor accounts in the accounts payable subsidiary ledger immediately after each entry.

4. Post the purchases journal to the accounts in the general ledger.

5.
a. What is the sum of the creditor balances in the subsidiary ledger at May 31?
b. What is the balance of the accounts payable controlling account at May 31?

6. What type of e-commerce application would be used to plan and coordinate transactions with suppliers?


Answer:






1. and 4.
Account: Field Supplies
GENERAL LEDGER
Account No. 14
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
May 1 Balance √ 6,200
31 P30 16,900 23,100
Account: Office Supplies Account No. 15
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
May 1 Balance √ 1,490
31 P30 1,105 2,595
Account: Office Equipment Account No. 18
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
May 1 Balance √ 19,400
19 P30 8,150 27,550
Account: Accounts Payable Account No. 21
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
May 1 Balance √ 5,145
31 P30 26,155
2. and 4.
Name:
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
Accu-Vision Supply Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
May 1 Balance √ 3,900
19 P30 8,150 12,050
Name: J-Mart Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
May 1 Balance √ 730
15 P30 500 1,230
26 P30 265 1,495
Name: Lassiter Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
May 1 Balance √ 515
3 P30 340 855
Name: Tri Cities Supplies
Date Item
Post.
Ref. Debit Credit Balance
2014
May 8 P30 4,500 4,500
23 P30 2,450 6,950
30 P30 3,040 9,990
Name: Wendell Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
May 1 P30 3,240 3,240
12 P30 3,670 6,910
3. and 4.
PURCHASES JOURNAL Page 30
Date Account Credited
Post.
Ref.
Accounts
Payable
Cr.
Field
Supplies
Dr.
Office
Supplies
Dr.
Other
Accounts
Dr.
Post.
Ref. Amount
2014
May 1 Wendell Co. √ 3,240 3,240
3 Lassiter Co. √ 340 340
8 Tri Cities Supplies √ 4,500 4,500
12 Wendell Co. √ 3,670 3,670
15 J-Mart Co. √ 500 500
19 Accu-Vision Supply Co. √ 8,150 Office Equipment 18 8,150
23 Tri Cities Supplies √ 2,450 2,450
26 J-Mart Co. √ 265 265
30 Tri Cities Supplies √ 3,040 3,040
31 26,155 16,900 1,105 8,150
(21) (14) (15) (√)
5. a. $31,300 ($12,050 + $1,495 + $855 + $9,990 + $6,910)
b. $31,300
6. Supply chain management e-commerce applications are used to plan and coordinate transactions with suppliers.

PR 5-2B Revenue and cash receipts journals; accounts receivable subsidiary and general ledgers

Transactions related to revenue and cash receipts completed by Sterling Engineering Services during the period June 2–30, 2014, are as follows:

June 2. Issued Invoice No. 717 to Yee Co., $1,430.
 3. Received cash from Auto-Flex Co. for the balance owed on its account.
 7. Issued Invoice No. 718 to Cooper Development Co., $670.
10. Issued Invoice No. 719 to Ridge Communities, $2,840.
Post revenue and collections to the accounts receivable subsidiary ledger.

14. Received cash from Cooper Development Co. for the balance owed on June 1.
16. Issued Invoice No. 720 to Cooper Development Co., $400.
Post revenue and collections to the accounts receivable subsidiary ledger.

18. Received cash from Yee Co. for the balance due on invoice of June 2.
20. Received cash from Cooper Development Co. for invoice of June 7.
23. Issued Invoice No. 721 to Auto-Flex Co., $860.
30. Recorded cash fees earned, $4,520.
30. Received office equipment of $1,800 in partial settlement of balance due on the Ridge Communities account.

Post revenue and collections to the accounts receivable subsidiary ledger.


Instructions
1. Insert the following balances in the general ledger as of June 1:



11 Cash $18,340
12 Accounts Receivable 2,650
18 Office Equipment 34,700
41 Fees Earned —





2. Insert the following balances in the accounts receivable subsidiary ledger as of June 1:


Auto-Flex Co. $1,670
Cooper Development Co. 980
Ridge Communities —
Yee 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 June. 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 accounts agrees with the accounts receivable controlling account in the general ledger.

7. Why would an automated system omit postings to a control 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
June 1 Balance √ 18,340
30 CR36 9,270 27,610
Account: Accounts Receivable Account No. 12
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 1 Balance √ 2,650
30 J1 1,800 850
30 R40 6,200 7,050
30 CR36 4,750 2,300
Account: Office Equipment Account No. 18
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 1 Balance √ 34,700
30 J1 1,800 36,500
Account: Fees Earned Account No. 41
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 30 R40 6,200 6,200
30 CR36 4,520 10,720
2. and 4.
Name:
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Auto-Flex Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
June 1 Balance √ 1,670
3 CR36 1,670 —
23 R40 860 860
Name: Cooper Development Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
June 1 Balance √ 980
7 R40 670 1,650
14 CR36 980 670
16 R40 400 1,070
20 CR36 670 400
Name: Ridge Communities
Date Item
Post.
Ref. Debit Credit Balance
2014
June 10 R40 2,840 2,840
30 J1 1,800 1,040
Name: Yee Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
June 2 R40 1,430 1,430
18 CR36 1,430 —

3., 4., and 5.
REVENUE JOURNAL Page 40
Date
Invoice
No. Account Debited
Post.
Ref.
Accounts Rec. Dr.
Fees Earned Cr.
2014
June 2 717 Yee Co. √ 1,430
7 718 Cooper Development Co. √ 670
10 719 Ridge Communities √ 2,840
16 720 Cooper Development Co. √ 400
23 721 Auto-Flex Co. √ 860
30 6,200
(12) (41)
CASH RECEIPTS JOURNAL Page 36
Date Account Credited
Post.
Ref.
Fees
Earned
Cr.
Accts.
Rec.
Cr.
Cash
Dr.
2014
June 3 Auto-Flex Co. √ 1,670 1,670
14 Cooper Development Co. √ 980 980
18 Yee Co. √ 1,430 1,430
20 Cooper Development Co. √ 670 670
30 Fees Earned 4,520 4,520
30 4,520 4,750 9,270
(41) (12) (11)
JOURNAL Page 1
Date Description
Post.
Ref. Debit Credit
2014
June 30 Office Equipment 18 1,800
Accounts Receivable—Ridge
Communities 12/√ 1,800
The subsidiary account for Ridge Communities must also be posted for an $1,800
credit.
6. The sum of the customer balances is in agreement with the controlling account.
Both have balances of $2,300 ($860 + $400 + $1,040).
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.

PR 5-1B Revenue journal; accounts receivable subsidiary and general ledgers

Guardian Security Services was established on January 15, 2014, to provide security services. The services provided during the remainder of the month are listed below.

Jan. 18. Issued Invoice No. 1 to Murphy Co. for $490 on account.
20. Issued Invoice No. 2 to Qwik-Mart Co. for $340 on account.
24. Issued Invoice No. 3 to Hopkins Co. for $750 on account.
27. Issued Invoice No. 4 to Carson Co. for $680 on account.
28. Issued Invoice No. 5 to Amber Waves Co. for $120 on account.
28. Provided security services, $100, to Qwik-Mart Co. in exchange for supplies.
30. Issued Invoice No. 6 to Qwik-Mart Co. for $200 on account.
31. Issued Invoice No. 7 to Hopkins Co. for $295 on account.

Instructions
1. Journalize the transactions for January, using a single-column revenue journal and a two-column general journal. Post to the following customer accounts in the accounts receivable ledger, and insert the balance immediately after recording each entry: Amber Waves Co.; Carson Co.; Hopkins Co.; Murphy Co.; Qwik-Mart Co.

2. Post the revenue journal to the following accounts in the general ledger, inserting the account balances only after the last postings:

12 Accounts Receivable
14 Supplies
41 Fees Earned

3.
a. What is the sum of the balances of the customer accounts in the subsidiary ledger at January 31?
b. What is the balance of the accounts receivable controlling account at January 31?

4. Assume Guardian Security Services began using a computerized accounting system to record the sales transactions on February 1. What are some of the benefits of the computerized system over the manual system?


Answer:






1. and 2.
REVENUE JOURNAL Page 1
Date
Invoice
No. Account Debited
Post.
Ref.
Accounts Rec. Dr.
Fees Earned Cr.
2014
Jan. 18 1 Murphy Co. √ 490
20 2 Qwik-Mart Co. √ 340
24 3 Hopkins Co. √ 750
27 4 Carson Co. √ 680
28 5 Amber Waves Co. √ 120
30 6 Qwik-Mart Co. √ 200
31 7 Hopkins Co. √ 295
31 2,875
(12) (41)
JOURNAL Page 1
Date Description
Post.
Ref. Debit Credit
2014
Jan. 28 Supplies 14 100
Fees Earned 41 100
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Name: Amber Waves Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Jan. 28 R1 120 120
Name: Carson Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Jan. 27 R1 680 680
Name: Hopkins Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Jan. 24 R1 750 750
31 R1 295 1,045
Name: Murphy Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Jan. 18 R1 490 490
Name: Qwik-Mart Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
Jan. 20 R1 340 340
30 R1 200 540
GENERAL LEDGER
Account: Accounts Receivable Account No. 12
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Jan. 31 R1 2,875 2,875
Account: Supplies Account No. 14
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Jan. 28 J1 100 100
Account: Fees Earned Account No. 41
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Jan. 28 J1 100 100
31 R1 2,875 2,975
3. a. $2,875 ($120 + $680 + $1,045 + $490 + $540)
b. $2,875
4. The computerized system is much more efficient. Each sales transaction
would be entered into an electronic invoice form. The postings to the accounts
receivable subsidiary and fees earned ledgers would be automatic. Also, all
sums and totals in the subsidiary ledgers are calculated automatically. There
would be no separate postings to an accounts receivable control account,
because there would be no need to verify the accuracy of account totals. There
would not be a math or posting error. The computerized system would also
provide management current customer account balance information, since the
postings are automatic.

PR 5-5A All journals and general ledger; trial balance

The transactions completed by Revere Courier Company during December 2014, the first month of the fiscal year, were as follows:

Dec. 1. Issued Check No. 610 for December rent, $4,500.
 2. Issued Invoice No. 940 to Capps Co., $1,980.
 3. Received check for $5,100 from Trimble Co. in payment of account.
 5. Purchased a vehicle on account from Boston Transportation, $39,500.
 6. Purchased office equipment on account from Austin Computer Co., $4,800.
 6. Issued Invoice No. 941 to Dawar Co., $5,680.
 9. Issued Check No. 611 for fuel expense, $800.
10. Received check from Sing Co. in payment of $4,850 invoice.
10. Issued Check No. 612 for $360 to Office To Go Inc. in payment of invoice.
10. Issued Invoice No. 942 to Joy Co., $2,140.
11. Issued Check No. 613 for $3,240 to Essential Supply Co. in payment of account.
11. Issued Check No. 614 for $650 to Porter Co. in payment of account.
12. Received check from Capps Co. in payment of $1,980 invoice of December 2.
13. Issued Check No. 615 to Boston Transportation in payment of $39,500 balance of December 5.
16. Issued Check No. 616 for $40,900 for cash purchase of a vehicle.
16. Cash fees earned for December 1–16, $21,700.
17. Issued Check No. 617 for miscellaneous administrative expense, $600.
18. Purchased maintenance supplies on account from Essential Supply Co., $1,750.
19. Purchased the following on account from McClain Co.: maintenance supplies, $1,500; office supplies, $325.
20. Issued Check No. 618 in payment of advertising expense, $1,990.
20. Used $3,600 maintenance supplies to repair delivery vehicles.
23. Purchased office supplies on account from Office To Go Inc., $440.
24. Issued Invoice No. 943 to Sing Co., $6,400.
24. Issued Check No. 619 to S. Holmes as a personal withdrawal, $3,200.
25. Issued Invoice No. 944 to Dawar Co., $5,720.
25. Received check for $4,100 from Trimble Co. in payment of balance.
26. Issued Check No. 620 to Austin Computer Co. in payment of $4,800 invoice of December 6.
30. Issued Check No. 621 for monthly salaries as follows: driver salaries, $16,900; office salaries, $7,600.
31. Cash fees earned for December 17–31, $19,700.
31. Issued Check No. 622 in payment for office supplies, $310.

Instructions
1. Enter the following account balances in the general ledger as of December 1:


11 Cash $160,900 32 S. Holmes, Drawing —
12 Accounts Receivable 14,050 41 Fees Earned —
14 Maintenance Supplies 10,850 51 Driver Salaries Expense —
15 Office Supplies 4,900 52 Maintenance Supplies Exp. —
16 Office Equipment 28,500 53 Fuel Expense —
17 Accum. Depr.—Office Equip. 6,900 61 Office Salaries Expense —
18 Vehicles 95,900 62 Rent Expense —
19 Accum. Depr.—Vehicles 14,700 63 Advertising Expense —
21 Accounts Payable 4,250 64 Miscellaneous Administrative Expense —
31 S. Holmes, Capital 289,250


2. Journalize the transactions for December 2014, using the following journals similar to those illustrated in this chapter: cash receipts journal (p. 31), purchases journal (p. 37, with columns for Accounts Payable, Maintenance Supplies, Office Supplies, and Other Accounts), singlecolumn revenue journal (p. 35), cash payments journal (p. 34), and two-column general journal (p. 1). Assume that the daily postings to the individual accounts in the accounts payable subsidiary ledger and the accounts receivable subsidiary ledger have been made.

3. Post the appropriate individual entries to the general ledger.

4. Total each of the columns of the special journals, and post the appropriate totals to the general ledger; insert the account balances.

5. Prepare a trial balance.


Answer:














1., 3., and 4.
Account: Cash
GENERAL LEDGER
Account No. 11
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 Balance √ 160,900
31 CR31 57,430 218,330
31 CP34 125,350 92,980
Account: Accounts Receivable Account No. 12
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 Balance √ 14,050
31 R35 21,920 35,970
31 CR31 16,030 19,940
Account: Maintenance Supplies Account No. 14
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 Balance √ 10,850
20 J1 3,600 7,250
31 P37 3,250 10,500
Account: Office Supplies
Account: Office Equipment
Account No. 15
Account No. 16
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 Balance √ 28,500
6 P37 4,800 33,300
Account: Accumulated Depreciation—Office Equipment Account No. 17
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 Balance √ 6,900
Account: Vehicles Account No. 18
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 Balance √ 95,900
5 P37 39,500 135,400
16 CP34 40,900 176,300
Account: Accumulated Depreciation—Vehicles Account No. 19
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 Balance √ 14,700
Account: Accounts Payable Account No. 21
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 Balance √ 4,250
31 P37 48,315 52,565
31 CP34 48,550 4,015
Account: S. Holmes, Capital Account No. 31
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 Balance √ 289,250
Account: S. Holmes, Drawing Account No. 32
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 24 CP34 3,200 3,200
Account: Fees Earned Account No. 41
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 16 CR31 21,700 21,700
31 CR31 19,700 41,400
31 R35 21,920 63,320
Account: Driver Salaries Expense Account No. 51
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 30 CP34 16,900 16,900
Account: Maintenance Supplies Expense Account No. 52
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 20 J1 3,600 3,600
Account: Fuel Expense Account No. 53
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 9 CP34 800 800
Account: Office Salaries Expense Account No. 61
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 30 CP34 7,600 7,600
Account: Rent Expense Account No. 62
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 1 CP34 4,500 4,500
Account: Advertising Expense
Account: Miscellaneous Administrative Expense
Account No. 63
Account No. 64
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
Dec. 17 CP34 600 600
2. and 4.
PURCHASES JOURNAL Page 37
Date Account Credited
Post.
Ref.
Accounts
Payable
Cr.
Maintenance
Supplies Dr.
Office
Supplies
Dr.
Other
Accounts
Dr.
Post.
Ref. Amount
2014
Dec. 5 Boston Transportation √ 39,500 Vehicles 18 39,500
6 Austin Computer Co. √ 4,800 Office Equipment 16 4,800
18 Essential Supply Co. √ 1,750 1,750
19 McClain Co. √ 1,825 1,500 325
23 Office To Go Inc. √ 440 440
31 48,315 3,250 765 44,300
(21) (14) (15) (√)
CASH RECEIPTS JOURNAL Page 31
Date Account Credited
Post.
Ref.
Other
Accounts
Cr.
Accounts
Receivable
Cr.
Cash
Dr.
2014
Dec. 3 Trimble Co. √ 5,100 5,100
10 Sing Co. √ 4,850 4,850
12 Capps Co. √ 1,980 1,980
16 Fees Earned 41 21,700 21,700
25 Trimble Co. √ 4,100 4,100
31 Fees Earned 41 19,700 19,700
31 41,400 16,030 57,430
(√) (12) (11)
2. and 4.
REVENUE JOURNAL Page 35
Date
Invoice
No. Account Debited
Post.
Ref.
Accounts Rec. Dr.
Fees Earned Cr.
2014
Dec. 2 940 Capps Co. √ 1,980
6 941 Dawar Co. √ 5,680
10 942 Joy Co. √ 2,140
24 943 Sing Co. √ 6,400
25 944 Dawar Co. √ 5,720
31 21,920
(12) (41)
CASH PAYMENTS JOURNAL Page 34
Date
Ck.
No. Account Debited
Post.
Ref.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Cash
Cr.
2014
Dec. 1 610 Rent Expense 62 4,500 4,500
9 611 Fuel Expense 53 800 800
10 612 Office To Go Inc. √ 360 360
11 613 Essential Supply Co. √ 3,240 3,240
11 614 Porter Co. √ 650 650
13 615 Boston Transportation √ 39,500 39,500
16 616 Vehicles 18 40,900 40,900
17 617 Misc. Admin. Expense 64 600 600
20 618 Advertising Expense 63 1,990 1,990
24 619 S. Holmes, Drawing 32 3,200 3,200
26 620 Austin Computer Co. √ 4,800 4,800
30 621 Driver Salaries Exp. 51 16,900 16,900
Office Salaries Exp. 61 7,600 7,600
31 622 Office Supplies 15 310 310
31 76,800 48,550 125,350
(√) (21) (11)
3. JOURNAL Page 1
Date Description
Post.
Ref. Debit Credit
2014
Dec. 20 Maintenance Supplies Expense 52 3,600
Maintenance Supplies 14 3,600
5.
 REVERE COURIER COMPANY
Unadjusted Trial Balance
December 31, 2014
Debit
Balances
Credit
Balances
Cash 92,980
Accounts Receivable 19,940
Maintenance Supplies 10,500
Office Supplies 5,975
Office Equipment 33,300
Accumulated Depreciation—Office Equipment 6,900
Vehicles 176,300
Accumulated Depreciation—Vehicles 14,700
Accounts Payable 4,015
S. Holmes, Capital 289,250
S. Holmes, Drawing 3,200
Fees Earned 63,320
Driver Salaries Expense 16,900
Office Salaries Expense 7,600
Rent Expense 4,500
Maintenance Supplies Expense 3,600
Advertising Expense 1,990
Fuel Expense 800
Miscellaneous Administrative Expense 600
378,185 378,185