Church Company completes these transactions and events during March of the curre

Question

Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 3/10, n/30).

Purchased $39,000 of merchandise from Van Industries, invoice dated March 1, terms 3/15, n/30.

Purchased $1,170 of office supplies on credit from Gabel Company, invoice dated March 3, terms n/10 EOM.

Purchased $19,500 of office equipment on credit from Spell Supply, invoice dated March 9, terms n/10 EOM.

Purchased $25,000 of merchandise from the CD Company, invoice dated March 13, terms 3/10, n/30.

Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first half of the month, $17,300. Cashed the check and paid the employees.

Cash sales for the first half of the month are $62,400 (cost is $49,920). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.)

Purchased $1,690 of store supplies on credit from Gabel Company, invoice dated March 16, terms n/10 EOM.

Received a $2,500 credit memorandum from CD Company for the return of unsatisfactory merchandise purchased on March 14.

Received a $585 credit memorandum from Spell Supply for office equipment received on March 9 and returned for credit.

Issued Check No. 418 to CD Company in payment of the invoice of March 13 less the March 17 return and the discount.

Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the month, $17,300. Cashed the check and paid the employees.

Cash sales for the last half of the month are $68,640 (cost is $41,184).

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 $62,000), Z. Church, Capital (March 1 beg. bal. is $62,000) and Church Company uses the perpetual inventory system.

Enter the transactions in a cash disbursements journal.

Enter the transactions in a general journal.

Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 3/10, n/30).

Explanation / Answer

Answer:

All accounts payable are creditors account and all accounts receivable are customers account.

Journal Entries Date Accounts Debit $ Credit $ Mar-01 Inventory    39,000.00 Accounts Payable    39,000.00 Mar-02 Accounts Receivable    15,600.00 Revenue    15,600.00 Mar-02 Cost of Goods Sold      7,800.00 Inventory      7,800.00 Mar-03 Office Supplies      1,170.00 Accounts Payable      1,170.00 Mar-03 Accounts Receivable      7,800.00 Revenue      7,800.00 Mar-03 Cost of Goods Sold      3,900.00 Inventory      3,900.00 Mar-06 Cash    72,000.00 Note Payable    72,000.00 Mar-09 Office Equipment    19,500.00 Accounts Payable    19,500.00 Mar-10 Accounts Receivable      3,900.00 Revenue      3,900.00 Mar-10 Cost of Goods Sold      1,950.00 Inventory      1,950.00 Mar-12 Cash    15,132.00 Discounts on sales          468.00 Accounts Receivable    15,600.00 Mar-13 Accounts Payable    39,000.00 Cash    39,000.00 Mar-13 Cash      7,566.00 Discounts on sales          234.00 Accounts Receivable      7,800.00 Mar-14 Inventory    25,000.00 Accounts Payable    25,000.00 Mar-15 Sales Salaries Expenses    17,300.00 Cash    17,300.00 Mar-15 Cash    62,400.00 Revenue    62,400.00 Mar-15 Cost of Goods Sold    49,920.00 Inventory    49,920.00 Mar-16 Stores Supplies      1,690.00 Accounts Payable      1,690.00 Mar-17 Accounts Payable      2,500.00 Inventory      2,500.00 Mar-18 Accounts Payable          585.00 Office Equipment          585.00 Mar-20 Cash      3,783.00 Discounts on sales          117.00 Accounts Receivable      3,900.00 Mar-23 Accounts Payable    22,500.00 Discounts on purchase          675.00 Cash    21,825.00 Mar-27 Accounts Receivable    11,700.00 Revenue    11,700.00 Mar-27 Cost of Goods Sold      4,680.00 Inventory      4,680.00 Mar-28 Accounts Receivable      4,680.00 Revenue      4,680.00 Mar-28 Cost of Goods Sold      1,872.00 Inventory      1,872.00 Mar-31 Sales Salaries Expenses    17,300.00 Cash    17,300.00 Mar-31 Cash    68,640.00 Revenue    68,640.00 Mar-31 Cost of Goods Sold    41,184.00 Inventory    41,184.00

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