(f) Prepare a post-closing trial balance, and determine whether the subsidiary l
ID: 2576817 • Letter: #
Question
(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.
Check figures:
Cash Receipts Journal, total Cash DR: $ 70,348
Cash Payments Journal, total Cash CR: 62,060
Net Income: 25,218 Total Assets: 149,568
Total Post Closing Trial Balance: 151,193
Sun & Surf Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Sun & Surf are indicated in the working papers. Below are a series of transactions for Sun & Surf Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 55% of the sales price.
Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.
5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30.
7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.
8 Pay freight on merchandise purchased $235.
9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.
9 Issue credit of $300 to C. Ryder for merchandise returned.
10 Summary daily cash sales total $15,500.
11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828.
12 Pay rent of $1,000 for January.
13 Receive payment in full from M. Knast and C. Ryder less cash discounts.
15 Withdrawal of $800 cash by J. Sandy for personal use.
15 Post all entries to the subsidiary ledgers.
16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.
17 Pay $400 cash for office supplies.
18 Return $200 of merchandise to K. Xerxes and receive credit.
20 Summary daily cash sales total $20,100.
21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.
21 Receive payment in full from V. Arnold less cash discount.
22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.
22 Post all entries to the subsidiary ledgers.
23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.
25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.
27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.
27 Post all entries to the subsidiary ledgers.
28 Pay $275 cash for office supplies.
31 Summary daily cash sales total $21,300.
31 Pay salaries and wages of $8,100. (continued)
Page 2 of 2
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, 2017, in the trial balance columns of the worksheet. Complete the worksheet using the following additional information.
1. Office supplies at January 31 total $900.
2. Insurance coverage expires on September 30, 2017.
3. Annual depreciation on the equipment is $1,500.
4. Interest of $50 has accrued on the note payable.
(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.
General Ledger
Cash
No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 37,150
Accounts Receivable
No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 13,000
Notes Receivable
No. 115
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 39,000
Inventory
No. 120
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 17,795
Office Supplies
No. 125
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 1,200
Prepaid Insurance
No. 130
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 2,205
Equipment
No. 157
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 6,450
Accumulated Depreciation - Equipment
No. 158
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 1,500
Notes Payable
No. 200
Date
Explanation
Ref.
Debit
Credit
Balance
Accounts Payable
No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 35,000
Interest Payable
Date
Explanation
Ref.
Debit
Credit
Balance
J. Sandy, Capital
No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 80,300
J. Sandy, Drawing
No. 306
Date
Explanation
Ref.
Debit
Credit
Balance
Income Summary
No. 350
Date
Explanation
Ref.
Debit
Credit
Balance
Sales
No. 401
Date
Explanation
Ref.
Debit
Credit
Balance
Sales Returns and Allowances
No. 412
Date
Explanation
Ref.
Debit
Credit
Balance
Sales Discounts
No. 414
Date
Explanation
Ref.
Debit
Credit
Balance
Cost of Goods Sold
No. 505
Date
Explanation
Ref.
Debit
Credit
Balance
Salaries and Wages Expense
No. 627
Date
Explanation
Ref.
Debit
Credit
Balance
Depreciation Expense
No. 711
Date
Explanation
Ref.
Debit
Credit
Balance
Interest Expense
No. 718
Date
Explanation
Ref.
Debit
Credit
Balance
Insurance Expense
No. 722
Date
Explanation
Ref.
Debit
Credit
Balance
Office Supplies Expense
No. 728
Date
Explanation
Ref.
Debit
Credit
Balance
Rent Expense
No. 729
Date
Explanation
Ref.
Debit
Credit
Balance
General Ledger
Cash
No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 37,150
Accounts Receivable
No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 13,000
Notes Receivable
No. 115
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 39,000
Inventory
No. 120
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 17,795
Office Supplies
No. 125
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 1,200
Prepaid Insurance
No. 130
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
$ 2,205
Explanation / Answer
Date Particulars Amount (Dr.) Amount (Cr.) January 3 Account receivable A/c Dr 7,000.00 To Sales A/c 7,000.00 January 5 Purchases A/c Dr 7,200.00 To Account Payable A/c 7,200.00 January 7 Cash A/c Dr. 6,000.00 To Account Receivable A/c 6,000.00 January 8 Freight A/c Dr. 235.00 To Cash A/c 235.00 January 9 Account Payable A/c Dr. 20,000.00 To Cash A/c 19,710.00 To Cash Discount Received 290.00 January 9 Sales Return A/c Dr. 300.00 To Account receivable A/c 300.00 January 10 Cash A/c Dr. 15,500.00 To Sales A/c 15,500.00 January 11 Account receivable A/c Dr 2,500.00 To Sales A/c 2,500.00 January 12 Rent A/c Dr 1,000.00 To Cash A/c 1,000.00 January 13 Cash A/c Dr. 6,566.00 Cash Discount A/c Dr. 134.00 To Account receivable A/c 6,700.00 January 15 Drawing A/c Dr 800.00 To Cash A/c 800.00 January 16 Purchases A/c Dr 33,700.00 To Account Payable A/c 33,700.00 January 17 Office Supplies A/c Dr 400.00 To Cash A/c 400.00 January 18 Account Payable A/c Dr. 200.00 To Purchase return A/c 200.00 January 20 Cash A/c Dr. 20,100.00 To Sales A/c 20,100.00 January 21 Account Payable a/c Dr. 15,000.00 To Notes Payable 15,000.00 January 21 Cash A/c Dr. 882.00 Cash Discount A/c Dr. 18.00 To Account receivable A/c 900.00 January 22 Account receivable A/c Dr 4,000.00 To Sales A/c 4,000.00 January 23 Account Payable A/c Dr. 32,000.00 To Cash A/c 31,540.00 To Cash Discount Received 460.00 January 25 Account receivable A/c Dr 9,600.00 To Sales A/c 9,600.00 January 27 Purchases A/c Dr 21,100.00 To Account Payable A/c 21,100.00 January 28 Office Supplies A/c Dr 275.00 To Cash A/c 275.00 January 31 Cash A/c Dr. 21,300.00 To Sales A/c 21,300.00 January 31 Salaries & Wages A/c Dr 8,100.00 To Cash A/c 8,100.00 Dr. Sales ledger Cr. Date Particulars Amount Date Particulars Amount January 9 To Account receivable A/c 300.00 January 3 By Account receivable 7,000.00 January 31 To Balance C/f 79,700.00 January 10 By Cash 15,500.00 January 11 By Account receivable 2,500.00 January 20 By Cash 20,100.00 January 22 By Account receivable 4,000.00 January 25 By Account receivable 9,600.00 January 31 By Cash 21,300.00 80,000.00 80,000.00 Dr. Purchase ledger Cr. Date Particulars Amount Date Particulars Amount January 5 To Account Payable A/c 7,200.00 January 18 By Account payable 200.00 January 16 To Account Payable A/c 33,700.00 January 31 By Balance C/f 61,800.00 January 27 To Account Payable A/c 21,100.00 62,000.00 62,000.00 Dr. Cash receipt and Payment Cr. Date Particulars Amount Date Particulars Amount January 7 To Account Receivable A/c 6,000.00 January 3 By Freight 235.00 January 10 To Sales A/c 15,500.00 January 9 By Account payable 19,710.00 January 13 To Account Receivable A/c 6,566.00 January 12 By Rent A/c 1,000.00 January 20 To Sales A/c 20,100.00 January 15 By Drawings 800.00 January 21 To Account Receivable A/c 882.00 January 17 By Office supplies 400.00 January 31 To Sales A/c 21,300.00 January 23 By Account payable 31,540.00 January 28 By Office supplies 275.00 January 31 By Salaries & Wages 8,100.00 January 31 By Balance C/F 8,288.00 70,348.00 70,348.00 Cash Discount account Date Particulars Amount Date Particulars Amount To Account Receivable A/c 134 By Account payable 290 To Account Receivable A/c 18 By Account payable 460 To Balance C/F 598 750.00 750.00 Trial Balance as on 31.10.2017 Particulars Amount (Dr.) Amount (Cr.) Purchases 61,800.00 - Sales 79,700.00 Account Receivable 9,200.00 Account Payable 5,200.00 Cash 8,288.00 Office Supplies 675.00 Notes payable 15,000.00 Rent 1,000.00 Drawings 800.00 Salary & Wages 8,100.00 Cash Discount A/c 598.00 Freight 235.00 Grand total 95,298.00 95,298.00 Notes 1 We have combines purchase with purcahse return, Sales with sales return and cash discount ledgers
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