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

/in /by

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

Mar. 1   Purchased $32,000 of merchandise from Van Industries, invoice dated March 1, terms 3/15, n/30.  2   Sold merchandise on credit to Min Cho, Invoice No. 854, for $12,800 (cost is $6,400).  3 (a) Purchased $960 of office supplies on credit from Gabel Company, invoice dated March 3, terms n/10 EOM.  3 (b) Sold merchandise on credit to Linda Witt, Invoice No. 855, for $6,400 (cost is $3,200).  6   Borrowed $72,000 cash from Federal Bank by signing a long-term note payable.  9   Purchased $16,000 of office equipment on credit from Spell Supply, invoice dated March 9, terms n/10 EOM.  10   Sold merchandise on credit to Jovita Albany, Invoice No. 856, for $3,200 (cost is $1,600).  12   Received payment from Min Cho for the March 2 sale less the discount.  13 (a) Sent Van Industries Check No. 416 in payment of the March 1 invoice less the discount.  13 (b) Received payment from Linda Witt for the March 3 sale less the discount.  14   Purchased $30,000 of merchandise from the CD Company, invoice dated March 13, terms 3/10, n/30.  15 (a) Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first half of the month, $17,200. Cashed the check and paid the employees.  15 (b) Cash sales for the first half of the month are $51,200 (cost is $40,960). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.)  16   Purchased $1,480 of store supplies on credit from Gabel Company, invoice dated March 16, terms n/10 EOM.  17   Received a $3,000 credit memorandum from CD Company for the return of unsatisfactory merchandise purchased on March 14.  19   Received a $480 credit memorandum from Spell Supply for office equipment received on March 9 and returned for credit.  20   Received payment from Jovita Albany for the sale of March 10 less the discount.  23   Issued Check No. 418 to CD Company in payment of the invoice of March 13 less the March 17 return and the discount.  27   Sold merchandise on credit to Jovita Albany, Invoice No. 857, for $9,600 (cost is $3,840).  28   Sold merchandise on credit to Linda Witt, Invoice No. 858, for $3,840 (cost is $1,536).  31 (a) Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the month, $17,200. Cashed the check and paid the employees.  31 (b) Cash sales for the last half of the month are $56,320 (cost is $33,792).  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 3

Post information from the journals in Part 2 to the general ledger and the accounts receivable and accounts payable subsidiary ledgers.

 

To post the information from the journals in Part 2 to the general ledger and the accounts receivable and accounts payable subsidiary ledgers, we need to summarize the transactions and update the respective accounts.

Let’s start by creating the necessary ledger accounts and subsidiary ledgers:

General Ledger Accounts:
1. Accounts Receivable
2. Accounts Payable
3. Inventory
4. Office Supplies
5. Office Equipment
6. Notes Payable
7. Z. Church, Capital
8. Sales Salaries Expense
9. Cost of Goods Sold
10. Sales

Accounts Receivable Subsidiary Ledger:
– Min Cho
– Linda Witt
– Jovita Albany

Accounts Payable Subsidiary Ledger:
– Van Industries
– Gabel Company
– Spell Supply
– CD Company

Now, let’s go through each transaction and update the respective accounts:

Mar. 1: Purchased $32,000 of merchandise from Van Industries
– Debit Inventory $32,000
– Credit Accounts Payable (Van Industries) $32,000

Mar. 2: Sold merchandise on credit to Min Cho
– Debit Accounts Receivable (Min Cho) $12,800
– Credit Sales $12,800
– Debit Cost of Goods Sold $6,400
– Credit Inventory $6,400

Mar. 3:
(a) Purchased $960 of office supplies on credit from Gabel Company
– Debit Office Supplies $960
– Credit Accounts Payable (Gabel Company) $960

(b) Sold merchandise on credit to Linda Witt
– Debit Accounts Receivable (Linda Witt) $6,400
– Credit Sales $6,400
– Debit Cost of Goods Sold $3,200
– Credit Inventory $3,200

Mar. 6: Borrowed $72,000 cash from Federal Bank by signing a long-term note payable
– Debit Cash $72,000
– Credit Notes Payable $72,000

Mar. 9: Purchased $16,000 of office equipment on credit from Spell Supply
– Debit Office Equipment $16,000
– Credit Accounts Payable (Spell Supply) $16,000

Mar. 10: Sold merchandise on credit to Jovita Albany
– Debit Accounts Receivable (Jovita Albany) $3,200
– Credit Sales $3,200
– Debit Cost of Goods Sold $1,600
– Credit Inventory $1,600

Mar. 12: Received payment from Min Cho for the March 2 sale less the discount
– Debit Cash $12,368 [($12,800 – ($12,800 * 0.03))]
– Credit Accounts Receivable (Min Cho) $12,800

Mar. 13:
(a) Sent Van Industries Check No. 416 in payment of the March 1 invoice less the discount
– Debit Accounts Payable (Van Industries) $31,040 [($32,000 – ($32,000 * 0.03))]
– Credit Cash $31,040

(b) Received payment from Linda Witt for the March 3 sale less the discount
– Debit Cash $6,208 [($6,400 – ($6,400 * 0.03))]
– Credit Accounts Receivable (Linda Witt) $6,400

Mar. 14: Purchased $30,000 of merchandise from CD Company
– Debit Inventory $30,000
– Credit Accounts Payable (CD Company) $30,000

Mar. 15:
(a) Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first half of the month, $17,200. Cashed the check and paid the employees.
– Debit Sales Salaries Expense $17,200
– Credit Cash $17,200

(b) Cash sales for the first half of the month are $51,200 (cost is $40,960)
– Debit Cash $51,200
– Credit Sales $51,200
– Debit Cost of Goods Sold $40,960
– Credit Inventory $40,960

Mar. 16: Purchased $1,480 of store supplies on credit from Gabel Company
– Debit Office Supplies $1,480
– Credit Accounts Payable (Gabel Company) $1,480

Mar. 17: Received a $3,000 credit memorandum from CD Company for the return of unsatisfactory merchandise purchased on March 14
– Debit Accounts Payable (CD Company) $3,000
– Credit Inventory $3,000

Mar. 19: Received a $480 credit memorandum from Spell Supply for office equipment received on March 9 and returned for credit
– Debit Accounts Payable (Spell Supply) $480
– Credit Office Equipment $480

Mar. 20: Received payment from Jovita Albany for the sale of March 10 less the discount
– Debit Cash $3,104 [($3,200 – ($3,200 * 0.03))]
– Credit Accounts Receivable (Jovita Albany) $3,200

Mar. 23: Issued Check No. 418 to CD Company in payment of the invoice of March 13 less the March 17 return and the discount
– Debit Accounts Payable (CD Company) $26,112 [($30,000 – $3,000 – ($30,000 * 0.03))]
– Credit Cash $26,112

Mar. 27: Sold merchandise on credit to Jovita Albany
– Debit Accounts Receivable (Jovita Albany) $9,600
– Credit Sales $9,600
– Debit Cost of Goods Sold $3,840
– Credit Inventory $3,840

Mar. 28: Sold merchandise on credit to Linda Witt
– Debit Accounts Receivable (Linda Witt) $3,840
– Credit Sales $3,840
– Debit Cost of Goods Sold $1,536
– Credit Inventory $1,536

Mar. 31:
(a) Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the month, $17,200. Cashed the check and paid the employees.
– Debit Sales Salaries Expense $17,200
– Credit Cash $17,200

(b) Cash sales for the last half of the month are $56,320 (cost is $33,792)
– Debit Cash $56,320
– Credit Sales $56,320
– Debit Cost of Goods Sold $33,792
– Credit Inventory $33,792

(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.

Ensure that all the transactions are correctly posted to their respective accounts in the general ledger and the accounts receivable and accounts payable subsidiary ledgers.