chapter 9 cash receipts, cash payments, and banking … · · 2015-10-221. to reconcile any ......
TRANSCRIPT
• In 1990, Gary Erickson lived in a garage with his dog.
• In 2000, Clif Bar was nearly sold to Quaker Oats for $120 million—Erickson backed out of the deal
when he experienced panic attacks about the sale. The company has tripled in size since.
• Clif Bar currently has 330 employees.
• In 2012, Clif Bar & Co.'s 10-year compounded annual growth rate was 17%.
1. To reconcile any difference between depositor’s checkbook, Cash account, and bank statement.
2. To record items not yet entered in firm’s records.
3. Outstanding checks, deposits in transit, service charges.
4. Balance of Cash account in the general ledger.
5. Access to checkbook is restricted; use of prenumbered check forms; checks examined by someone
who did not prepare them before they are signed; bank statement reconciled by someone other than
employees who handle cash.
6. Day-by-day checking account activity, as well as beginning and ending balances.
7. Signed, authorized written order instructing a bank to pay a specific sum of money to a designated
person.
8. Date, amount, payee, current balance, purpose of check. Stub should be prepared before the check so
that it will not be forgotten.
9. Electronic processing of documents.
10. Restrictive endorsement.
11. Shortages are debited and overages are credited to the Cash Short or Over account.
Note to instructor : These questions are designed to check students’ understanding of new concepts, and
procedures presented in the chapter.
Discussion Questions
Chapter Opener: Thinking Critically
CASH RECEIPTS, CASH PAYMENTS, AND BANKING
PROCEDURES
CHAPTER 9
Business’s should write checks for most expenses as it provides proof of payment and provides assurance
that outlays of cash are for legitimate business purposes. However, sometimes payment by check is
impractical and businesses use a Petty Cash account.
Fast Facts
Managerial Implications: Thinking Critically
Answers will vary, but should recognize the need to weigh the earning power (interest income) and the
need for liquidity (access to the cash).
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distribution in any manner. 9-1
12. At month-end or when petty cash is replenished.
13. Use only for minor payments; establishment check made out to person to be in charge of funds; keep
funds locked; payments made from funds should be documented with signatures of recipient.
14. Contra cost account, deduction from Purchases.
15. Cash Payments Journal: total amount of purchase is a debit to Accounts Payable. Discount is recorded
as a credit to Purchases Discounts. Amount of cash paid is recorded as a credit to Cash.
16. Cash Receipts Journal: Original sale was recorded as a Credit to Accounts Receivable; amount of the
discount is recorded as a debit to Sales Discounts. Amount of cash received is recorded as a debit to
Cash.
17. Encourages fast payment.
18. Written promise to pay amount on specific date. Dr. Cash, Cr. Notes Rec., Cr. Interest Income. Cash
receipts journal.
19. Payments made by check and issued only with approved invoice; invoices approved only by
designated personnel; checks prepared and recorded in the checkbook or check register by someone
different from the person who approves the payments; use prenumbered checks.
20. Employees are investigated by an insurance company, and, if their backgrounds are satisfactory, their
employer is insured against losses that may occur because of employee theft or mishandling of funds.
21. Only approved employees can handle cash; keep cash in locked location; record cash receipts as they
arrive; check funds against receipt log before bank deposits are made; make deposits promptly;
separation of cash deposits, recording, reconciliation duties.
22. See Glossary for terms and definitions.
23. (a) Purchases Discounts. (b) Merchandise Inventory.
Discussion Questions (continued)
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distribution in any manner. 9-2
EXERCISE 9.1
PAGE
2016
Oct. 1 5 2 8 00 6 6 0 0 00 Cash Short or Over 1 2 00 7 1 4 0 00
2 8 9 0 00 8 9 0 00
3 4 4 0 00 5 5 0 0 00 5 9 4 0 00
4 24 0 0 0 00 24 0 0 0 00
6 5 9 2 00 7 4 0 0 00 Cash Short or Over ( 2 0 00) 7 9 7 2 00
EXERCISE 9.2
PAGE
POST.
REF.
2016
Oct. 1 3850 October rent Rent Expense 3 6 0 0 00 3 6 0 0 00
1 3851 Fisher Company 3 2 0 0 00 3 2 0 0 00
2 3852 Bought equipment Equipment 13 1 0 0 00 13 1 0 0 00
2 3853 Paid sales tax Sales Tax Payable 1 5 2 0 00 1 5 2 0 00
3 3854 Sports Emporium 2 0 0 0 00 4 0 00 1 9 6 0 00
4 3855 Cash purchase Purchases 3 9 2 5 00 3 9 2 5 00
6 3856 Withdrawal by owner Eddie Reynolds, Drawing 4 9 0 6 00 4 9 0 6 00
12
AMOUNT
POST.
REF.DATE
POST.
REF.
ACCOUNTS
RECEIVABLE
CR.
SALES TAX
PAY. CR.
CASH RECEIPTS JOURNAL
POST.
REF.DESCRIPTION
DESCRIPTION
OTHER ACCOUNTS DEBIT
SALES
CREDIT ACCOUNT NAME
OTHER ACCOUNTS CREDIT
15CASH PAYMENTS JOURNAL
Cash sales
Jerry Lin
Cash sales
Investment by owner
DATE
CK.
NO.
Cash sales
CASH DEBIT
PUR. DIS. CR.
CASH
CREDITAMOUNT
Eddie Reynolds,
Capital
ACCOUNTS
PAYABLE
DEBIT ACCOUNT NAME
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distribution in any manner. 9-3
EXERCISE 9.3
PAGE
ACCOUNT NAME
POST.
REF.
2016
Jan. 2 2108 Established petty cash fund Petty Cash 4 5 0 00 4 5 0 00
EXERCISE 9.4
PAGE
ACCOUNT NAME
POST.
REF.
2016
Jan. 31 3159 Replenished petty cash fund Supplies 5 8 00
Delivery Expense 9 9 00
Miscellaneous Expense 3 4 00 1 9 1 00
1
DESCRIPTION
CK.
NO.
PURCHASES
DISCOUNT
CREDIT
CASH
CREDITAMOUNT
OTHER ACCOUNTS DEBIT
CASH
CREDITAMOUNT
CASH PAYMENTS JOURNAL
DATE
CK.
NO.
POST.
REF.
ACOUNTS
PAYABLE
DEBIT
OTHER ACCOUNTS DEBIT PURCHASES
DISCOUNT
CREDIT
CASH PAYMENTS JOURNAL
DESCRIPTION
1
DATE
POST.
REF.
ACCOUNTS
PAYABLE
DEBIT
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distribution in any manner. 9-4
EXERCISE 9.5
15 2 0 0 00
8 6 7 00
16 0 6 7 00
Check 7017 1 3 4 00
Check 7098 6 5 00
Check 7107 1 6 6 0 00
Total outstanding checks 1 8 5 9 00
14 2 0 8 00
14 6 7 2 00
Deductions:
Bank service charge 3 0 00
NSF check from James Dear 4 3 4 00 4 6 4 00
Adjusted book balance 14 2 0 8 00
PAGE
DESCRIPTION
1 2016 1
2 Oct. 31 Miscellaneous Expense 3 0 00 2
3 Cash 3 0 00 3
4 Bank service charge for October 4
5 5
6 31 Accounts Receivable/James Dear 4 3 4 00 6
7 Cash 4 3 4 00 7
8 To record check returned by the bank 8
Balance on bank statement
Additions:
DATE
Adjusted bank balance
Balance in books
GENERAL JOURNAL
POST.
REF. DEBIT CREDIT
Deductions for outstanding checks:
Deposit in transit
Chan Corporation
Bank Reconciliation
October 31, 2016
14
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distribution in any manner. 9-5
EXERCISE 9.6
Bank Balance
1. X
2.
3.
4.
5. X
6.
7. X
EXERCISE 9.7
68 5 0 5 00
4 2 0 0 00
2 5 8 00 4 4 5 8 00
72 9 6 3 00
Check 3782 2 7 0 0 00
Check 3840 1 6 1 00
2 8 6 1 00
70 1 0 2 00
69 5 4 7 00
Additions:
6 8 0 0 00
76 3 4 7 00
Deductions:
Bank collection fee for note 6 0 00
NSF check from Wilson Construction Company 6 1 8 5 00 6 2 4 5 00
Adjusted book balance 70 1 0 2 00
X
Di Sisto Office Supply Company
X
X
X
X
Noninterest-bearing note collected by bank
Deposit in transit
Deductions for outstanding checks:
Adjusted bank balance
Balance in books
Book Balance
Additions:
Check incorrectly charged
Total outstanding checks
Accounting Entry
XX
Balance on bank statement
Bank Reconciliation Statement
March 31, 2016
X
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distribution in any manner. 9-6
EXERCISE 9.7 (continued)
PAGE
POST.
REF.
1 2016 1
2 March 31 6 8 0 0 00 2
3 Notes Receivable 6 8 0 0 00 3
4 To record receipt of note collected by bank 4
5 5
6 31 Miscellaneous Expense 6 0 00 6
7 6 0 00 7
8 8
9 9
10 31 6 1 8 5 00 10
11 6 1 8 5 00 11
12 12
EXERCISE 9.8
Balance on Bank Statement 13 8 0 0 00
Additions:
Check incorrectly charged 1 6 1 00
Check 2782 written for $300; paid by bank as $1,300 1 0 0 0 00
Check 2920 for $95 paid by the bank twice 9 5 00
1 2 5 6 00
15 0 5 6 00
Deductions:
November 22 deposit of $690 credited by bank for $960 2 7 0 00
Outstanding checks 2 2 5 0 00 2 5 2 0 00
Adjusted Bank Balance 12 5 3 6 00
November 30, 2016
Accounts Receivable/Wilson Construction
Cash
To record NSF check returned by bank
Cash
Fierro Company
Bank Reconciliation Statement
To record bank collection fee
Cash
GENERAL JOURNAL 8
DATE DESCRIPTION DEBIT CREDIT
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distribution in any manner. 9-7
EXERCISE 9.9
PAGE
POST.
REF.
1 2016 1
2 Sept. 22 2 4 0 00 2
3 2 4 0 00 3
4 To record ATM withdrawal by Robert 4
5 Savage for personal use. 5
6 6
7 22 Cash 8 9 0 0 00 7
8 Accounts Receivable/Edwards UK 8 9 0 0 00 8
9 To record wire-transfer of funds 9
10 received on account from Edwards UK 10
11 11
12 23 Utilities Expense 3 6 05 12
13 Cash 3 6 05 13
14 14
15 Control Trash Services 15
16 16
17 24 Note Payable 3 5 0 0 00 17
18 Cash 3 5 0 0 00 18
19 To record loan payment to Central Motors 19
20 20
Cash
To record on-line payment to Waste
Robert Savage, Drawing
GENERAL JOURNAL 21
DATE DESCRIPTION DEBIT CREDIT
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distribution in any manner. 9-8
EXERCISE 9.10
1. Purchase 3,500.00$
Less return (550.00)
Subtotal 2,950.00
Less discount (2% * $2,950) (59.00)
Net purchase 2,891.00
Add freight 120.00
Payment amount 3,011.00$
2.
PAGE
DESCRIPTIONPOST.
REF.
2016 1
July 10 Accounts Payable/Fashion Expo 3 0 7 0 00 2
Merchandise Inventory 5 9 00 3
Cash 3 0 1 1 00 4
Paid amount due on Invoice 101 to Fashion 5
Expo after receipt of Credit Memo 210, 6
Check 1255 7
8
9
GENERAL JOURNAL 10
DATE DEBIT CREDIT
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distribution in any manner. 9-9
PROBLEM 9.1A
PAGE
ACCOUNT NAME
POST.
REF.
2016
Feb. 3 Danielle Pelzel 6 0 0 00 6 0 0 00
5 Refund for damaged
goods
Supplies 1291 1 3 0 00 1 3 0 00
7 Cash Sales 4 6 4 00 5 8 0 0 00 Cash Short or Over 620 ( 7 0 00) 6 1 9 4 00
9 Additional Investment Jason Wilson, Capital 301 16 0 0 0 00 16 0 0 0 00
12 Kyela Jones 4 8 0 00 4 8 0 00
14 Cash Sales 3 6 4 00 4 5 5 0 00 Cash Short or Over 620 3 8 00 4 9 5 2 00
16 Sadie Nelson 5 5 0 00 5 5 0 00
19 Collected promissory Notes Receivable 109 9 0 0 00
note and interest Interest Income 491 3 6 00 9 3 6 00
21 Cash Sales 4 0 4 00 5 0 5 0 00 5 4 5 4 00
25 Alfred Herron 6 8 0 00 6 8 0 00
28 Cash Sales 4 0 8 00 5 1 0 0 00 Cash Short or Over 620 ( 4 6 00) 5 4 6 2 00
29 Totals 2 3 1 0 00 1 6 4 0 00 20 5 0 0 00 16 9 8 8 00 41 4 3 8 00
( 1 1 1 ) ( 2 3 1 ) ( 4 0 1 ) ( X ) ( 1 0 1 )
OTHER ACCOUNTS CREDIT
4
CASH
DEBITAMOUNTDATE DESCRIPTION
CASH RECEIPTS JOURNAL
POST.
REF.
ACCOUNTS
RECEIVABLE
CREDIT
SALES TAX
PAYABLE
CREDIT
SALES
CREDIT
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distribution in any manner. 9-10
PROBLEM 9.1A (continued)
ACCOUNT Cash ACCOUNT NO.
2016
Feb. 1 Balance ✔ 5 0 6 0 00
29 CR4 41 4 3 8 00 46 4 9 8 00
ACCOUNT Notes Receivable ACCOUNT NO.
2016
Feb. 1 Balance ✔ 9 0 0 00
19 CR4 9 0 0 00 – 0 –
ACCOUNT Accounts Receivable ACCOUNT NO.
2016
Feb. 1 Balance ✔ 4 1 2 5 00
29 CR4 2 3 1 0 00 1 8 1 5 00
ACCOUNT Supplies ACCOUNT NO.
2016
Feb. 1 Balance ✔ 7 1 0 00
5 CR4 1 3 0 00 5 8 0 00
CREDIT
CREDIT
129
CREDIT
BALANCE
DEBIT
DEBIT
DATE DESCRIPTION
POST.
REF. DEBIT
CREDIT
111
DATE
BALANCEPOST.
REF.DESCRIPTION
BALANCE
DEBIT
CREDIT
109
CREDIT
BALANCE
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
DEBIT
DEBIT
GENERAL LEDGER
101
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
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distribution in any manner. 9-11
PROBLEM 9.1A (continued)
ACCOUNT Sales Tax Payable ACCOUNT NO.
2016
Feb. 1 Balance ✔ 3 4 5 00
29 CR4 1 6 4 0 00 1 9 8 5 00
ACCOUNT Jason Wilson, Capital ACCOUNT NO.
2016
Feb. 1 Balance ✔ 35 0 0 0 00
9 CR4 16 0 0 0 00 51 0 0 0 00
ACCOUNT Sales ACCOUNT NO.
2016
Feb. 29 CR4 20 5 0 0 00 20 5 0 0 00
ACCOUNT Interest Income ACCOUNT NO.
2016
Feb. 19 CR4 3 6 00 3 6 00
GENERAL LEDGER
231
DATE DESCRIPTION
POST.
REF. CREDIT
BALANCE
DEBIT
BALANCE
DEBITDEBIT CREDIT CREDIT
DEBIT CREDIT
301
DATE DESCRIPTION
POST.
REF.
DATE DESCRIPTION
DEBIT
401
POST.
REF.
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
CREDIT
491
CREDIT
BALANCE
DEBIT
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distribution in any manner. 9-12
PROBLEM 9.1A (continued)
ACCOUNT Cash Short or Over ACCOUNT NO.
2016
Feb. 7 CR4 7 0 00 7 0 00
14 CR4 3 8 00 3 2 00
28 CR4 4 6 00 7 8 00
Analyze: Total Accounts Receivable collected was $2,310.
CREDIT
BALANCE
DEBIT
GENERAL LEDGER
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
620
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distribution in any manner. 9-13
PROBLEM 9.2A
PAGE
ACCOUNT NAME
POST.
REF.
2016
June 1 4121 Monthly rent Rent Expense 620 3 5 0 0 00 3 5 0 0 00
2 4122 Tax remittance Sales Tax Payable 231 5 2 0 0 00 5 2 0 0 00
3 4123 Perfect Timing Watch Co. 2 8 8 0 00 2 8 8 0 00
4 4124 Established petty cash fund Petty Cash Fund 105 2 5 0 00 2 5 0 00
7 4125 Paid promissory note and Notes Payable 201 4 2 0 0 00
Interest to Perry Corp. Interest Expense 634 1 6 8 00 4 3 6 8 00
10 4126 Cash refund Sales Returns & Allowances 451 6 0 4 00 6 0 4 00
12 4127 Monthly telephone bill Telephone Expense 626 2 8 6 00 2 8 6 00
14 4128 International Jewelry Co. 5 9 5 0 00 1 1 9 00 5 8 3 1 00
17 4129 Store supplies Supplies 129 9 6 0 00 9 6 0 00
20 4130 Nelson’s Jewelry and
Accessories
4 0 0 0 00 8 0 00 3 9 2 0 00
27 4131 Classy Creations 3 7 5 0 00 3 7 5 0 00
30 4132 Monthly salaries Salaries Expense 623 7 9 2 5 00 7 9 2 5 00
30 4133 Withdrawal by owner Larry Jennings, Drawing 302 6 0 0 0 00 6 0 0 0 00
30 4134 Replenish petty cash fund Supplies 129 4 0 00
Delivery Expense 611 5 3 00
Miscellaneous Expense 635 7 0 00
Larry Jennings, Drawing 302 3 4 00 1 9 7 00
30 Totals 16 5 8 0 00 29 2 9 0 00 1 9 9 00 45 6 7 1 00
( 2 0 5 ) ( X ) ( 5 0 4 ) ( 1 0 1 )
ACCOUNTS
PAYABLE
DEBIT
OTHER ACCOUNTS DEBIT PURCHASES
DISCOUNT
CREDIT
8
CASH
CREDITAMOUNT
CASH PAYMENTS JOURNAL
DATE
CK.
NO. DESCRIPTION
POST.
REF.
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distribution in any manner. 9-14
PROBLEM 9.2A (continued)
PAGE
ACCOUNT
NAME
2016
June 4 — Establish fund 2 5 0 00
5 1 Office supplies 4 0 00 4 0 00
8 2 Postage stamps 3 0 00 3 0 00
15 3 Delivery service 1 9 00 1 9 00
22 4 Personal withdrawal 3 4 00 Larry Jennings,
Drawing
3 4 00
25 5 Store windows washed 4 0 00 4 0 00
30 6 Delivery service 3 4 00 3 4 00
30 — Totals 2 5 0 00 1 9 7 00 4 0 00 5 3 00 7 0 00 3 4 00
30 — Balance on hand 5 3 00
2 5 0 00 2 5 0 00
30 — Balance on hand 5 3 00
30 — Replenish fund 1 9 7 00
30 — Carried forward 2 5 0 00
DELIVERY
EXPENSE
DEBIT
SUPPLIES
DEBIT
OTHER ACCOUNTS DEBIT
AMOUNTRECEIPTS
8
DESCRIPTION
DISTRIBUTION OF PAYMENTS
MISC.
EXPENSE
DEBIT
PETTY CASH ANALYSIS SHEET
PAYMENTSDATE
VOU.
NO.
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distribution in any manner. 9-15
PROBLEM 9.2A (continued)
ACCOUNT Cash ACCOUNT NO.
2016
June 1 Balance ✔ 46 7 4 0 00
30 CP8 45 6 7 1 00 1 0 6 9 00
ACCOUNT Petty Cash Fund ACCOUNT NO.
2016
June 4 CP8 2 5 0 00 2 5 0 00
ACCOUNT Supplies ACCOUNT NO.
2016
June 1 Balance ✔ 1 1 6 0 00
17 CP8 9 6 0 00 2 1 2 0 00
30 CP8 4 0 00 2 1 6 0 00
ACCOUNT Notes Payable ACCOUNT NO.
2016
June 1 Balance ✔ 4 2 0 0 00
7 CP8 4 2 0 0 00 – 0 –
DEBIT
GENERAL LEDGER
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT CREDIT
CREDIT
201
BALANCEDEBIT CREDIT
101
105
129
BALANCE
BALANCE
DEBIT
DATE DESCRIPTION
POST.
REF. DEBIT
DATE DESCRIPTION
POST.
REF.
DATE
DEBIT
CREDIT
CREDITBALANCE
DESCRIPTION
POST.
REF. DEBIT CREDIT
CREDIT
DEBIT
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distribution in any manner. 9-16
PROBLEM 9.2A (continued)
ACCOUNT Accounts Payable ACCOUNT NO.
2016
June 1 Balance ✔ 19 8 8 0 00
30 CP8 16 5 8 0 00 3 3 0 0 00
ACCOUNT Sales Tax Payable ACCOUNT NO.
2016
June 1 Balance ✔ 5 2 0 0 00
2 CP8 5 2 0 0 00 – 0 –
ACCOUNT Larry Jennings, Drawing ACCOUNT NO.
2016
June 30 CP8 6 0 0 0 00 6 0 0 0 00
30 CP8 3 4 00 6 0 3 4 00
ACCOUNT Sales Returns and Allowances ACCOUNT NO.
2016
June 10 CP8 6 0 4 00 6 0 4 00
CREDITBALANCE
DEBIT CREDITDATE DESCRIPTION
POST.
REF. DEBIT
CREDITDATE DESCRIPTION
POST.
REF. DEBIT
DATE DESCRIPTION
POST.
REF. DEBIT
451
BALANCE
DEBIT CREDIT
CREDITBALANCE
DEBIT CREDIT
CREDITBALANCE
DEBIT
205
231
302
GENERAL LEDGER
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
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distribution in any manner. 9-17
PROBLEM 9.2A (continued)
ACCOUNT Purchases Discounts ACCOUNT NO.
2016
June 30 CP8 1 9 9 00 1 9 9 00
ACCOUNT Delivery Expense ACCOUNT NO.
2016
June 30 CP8 5 3 00 5 3 00
ACCOUNT Rent Expense ACCOUNT NO.
2016
June 1 CP8 3 5 0 0 00 3 5 0 0 00
ACCOUNT Salaries Expense ACCOUNT NO.
2016
June 30 CP8 7 9 2 5 00 7 9 2 5 00
GENERAL LEDGER
DATE DESCRIPTION
POST.
REF.
BALANCE
DEBIT CREDIT
504
DEBIT CREDIT
620
BALANCEDEBIT
611
DEBIT CREDITDATE DESCRIPTION
POST.
REF.
POST.
REF.DATE DESCRIPTION
DATE DESCRIPTION
POST.
REF.
DEBIT
DEBIT
623
CREDIT CREDIT
BALANCE
DEBIT
DEBIT CREDIT
BALANCE
CREDIT
CREDIT
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distribution in any manner. 9-18
PROBLEM 9.2A (continued)
ACCOUNT Telephone Expense ACCOUNT NO.
2016
June 12 CP8 2 8 6 00 2 8 6 00
ACCOUNT Interest Expense ACCOUNT NO.
2016
June 7 CP8 1 6 8 00 1 6 8 00
ACCOUNT Miscellaneous Expense ACCOUNT NO.
2016
June 30 CP8 7 0 00 7 0 00
Analyze: Total Payments from the Petty Cash Fund for the month were $197
CREDITDEBIT CREDIT
DESCRIPTION
DEBIT CREDIT
POST.
REF.
BALANCE
DESCRIPTION
POST.
REF.
CREDITDEBIT
DEBIT
BALANCE
BALANCE
CREDIT
DATE CREDIT
DEBIT
DATE
635
POST.
REF. DEBIT
634
GENERAL LEDGER
626
DATE DESCRIPTION
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distribution in any manner. 9-19
PROBLEM 9.3A
PAGE
INVOICE
NO. CUSTOMER’S NAME
POST.
REF.
1 2016 1
2 April 1 9312 Soprano Music Center 4 9 0 0 00 2
3 8 9313 Music Warehouse 5 5 0 0 00 3
4 19 9314 Eagleton Music Center 11 5 0 0 00 4
5 30 9315 Contemporary Sounds, Inc. 10 8 0 0 00 5
6 30 Total 32 7 0 0 00 6
7 (1 1 1/ 4 01) 7
8 8
SALES JOURNAL 7
DATE
ACCOUNTS
RECEIVABLE
DR./ SALES CR.
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distribution in any manner. 9-20
PROBLEM 9.3A (continued)
PAGE
ACCOUNT
NAME
POST.
REF.
2016
April 3 Music Supply Store 2 0 0 0 00 4 0 00 1 9 6 0 00
5 Cash sales 1 8 2 5 00 1 8 2 5 00
10 Soprano Music
Center
4 9 0 0 00 9 8 00 4 8 0 2 00
23 Sounds From
Yesterday
3 2 2 5 00 3 2 2 5 00
28 Eagleton Music
Center
11 5 0 0 00 2 3 0 00 11 2 7 0 00
30 Totals 21 6 2 5 00 1 8 2 5 00 3 6 8 00 23 0 8 2 00
( 1 1 1 ) ( 4 0 1 ) ( 4 5 2 ) ( 1 0 1 )
SALES
DISCOUNT
DEBIT
ACCOUNTS
RECEIVABLE
CREDIT
CASH RECEIPTS JOURNAL
SALES
CREDIT
OTHER ACCOUNTS CREDIT
7
DATE DESCRIPTION
POST.
REF.
CASH
DEBIT
AMOUNT
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distribution in any manner. 9-21
PROBLEM 9.3A (continued)
PAGE
1 2016 1
2 April 15 Sales Returns and Allowances 9 0 0 00 2
3 3
4 Accepted a return of damaged merchandise, 4
5 Credit Memo 105, sale originally made on 5
6 Invoice 9313, April 8 6
7 7
8 26 Notes Receivable 6 5 0 0 00 8
9 9
10 10
11 Country Music Store to replace open account 11
12 12
ACCOUNT Cash ACCOUNT NO.
2016
April 1 Balance 17 4 0 0 00
30 23 0 8 2 00 40 4 8 2 00
GENERAL JOURNAL 17
DATE DEBIT CREDIT
POST.
REF.DESCRIPTION
Accounts Receivable/Music Warehouse 9 0 0 00
DATE DEBIT
0
DESCRIPTION DEBIT CREDIT
BALANCE
111
CR7
CREDIT
451
111
✔
6 5
POST.R
EF.
✔
109
✔
Received a 2-month, 12% note from
101
GENERAL LEDGER (PARTIAL)
Accounts Receivable/Country Music Store
0 00
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distribution in any manner. 9-22
PROBLEM 9.3A (continued)
ACCOUNT Notes Receivable ACCOUNT NO.
2016
April 26 J17 6 5 0 0 00 6 5 0 0 00
ACCOUNT Accounts Receivable ACCOUNT NO.
2016
April 1 Balance ✔ 22 0 0 0 00
15 J17 9 0 0 00 21 1 0 0 00
26 J17 6 5 0 0 00 14 6 0 0 00
30 S7 32 7 0 0 00 47 3 0 0 00
30 CR7 21 6 2 5 00 25 6 7 5 00
ACCOUNT Sales ACCOUNT NO.
2016
April 30 S7 32 7 0 0 00 32 7 0 0 00
30 CR7 1 8 2 5 00 34 5 2 5 00
GENERAL LEDGER (PARTIAL)
DESCRIPTION
POST.
REF. DEBIT CREDIT
109
CREDIT
401
DEBIT
DEBIT
CREDIT
DEBIT
BALANCE
DATE
BALANCE
DATE DESCRIPTION
DATE
DEBIT
CREDIT
CREDIT
CREDIT
BALANCE
DEBIT
POST.
REF.
DESCRIPTION
POST.
REF.
111
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distribution in any manner. 9-23
PROBLEM 9.3A (continued)
ACCOUNT Sales Returns and Allowances ACCOUNT NO.
2016
April 15 J17 9 0 0 00 9 0 0 00
ACCOUNT Sales Discounts ACCOUNT NO.
2016
April 30 CR7 3 6 8 00 3 6 8 00
34 5 2 5 00
Less: Sales Returns and Allowances 9 0 0 00
Sales Discounts 3 6 8 00 1 2 6 8 00
Net Sales 33 2 5 7 00
Analyze: Total sales on account before returns and allowances were $32,700.
GENERAL LEDGER (PARTIAL)
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT
DEBIT
451
Sales
Revenue
CREDIT
DATE DESCRIPTION
Awesome Sounds
Partial Income Statement
Month Ended April 30, 2016
POST.
REF.
452
CREDITCREDIT
BALANCE
DEBIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-24
PROBLEM 9.4A
PAGE
PURCHASED FROM
INVOICE
NUMBER
INVOICE
DATE TERMS
POST.
REF.
2016
June 3 Perfect Fit Shoe Shop 746 6/1 2/10, n/30 3 1 0 0 00
12 Juanda’s Coat Shop 9922 6/9 n/30 2 3 0 0 00
23 Motor Speedway 1927 6/20 2/10, n/30 6 4 0 0 00
30 Jogging Shoes Store 4713 6/26 1/10, n/30 2 0 8 0 00
30 Total 13 8 8 0 00
(50 1 / 2 05)
DATE
PURCHASES
DR./ ACCOUNTS
PAYABLE CR.
8PURCHASES JOURNAL
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-25
PROBLEM 9.4A (continued)
PAGE
POST.
REF.
1 2016 1
2 June 5 131 5 5 0 0 00 2
205
✔
4 4
5 5
6 6
205
✔8 503 8 0 0 00 8
9 9
10 10
11 11
12 12
13 21 Equipment 131 10 5 0 0 00 13
14 201 10 5 0 0 00 14
15 15
16 16
7
Invoice 9922, June 9
Issued 3-month, 12% note to Warren
Returned defective goods, receiving
Credit Memo 203, original purchase made on
Purchases Returns and Allowances
Notes Payable
3
Equipment
DATE
20
DESCRIPTION DEBIT CREDIT
GENERAL JOURNAL
0
Purchased new store equipment, Invoice 9067
dated June 4, payable in 30 days
Company to purchase new store equipment
Accounts Payable/Middleton Company 0 00
18 Accounts Payable/Juanda’s Coat Shop 8 000
35 05
7
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-26
PROBLEM 9.4A (continued)
PAGE
ACCOUNT NAME
POST.
REF.
2016
June 1 1101 Monthly rent Rent Expense 611 3 4 0 0 00 3 4 0 0 00
7 1102 Leisure Wear Clothing Co. 1 5 7 0 00 1 5 7 0 00
8 1103 Perfect Fit Shoe Shop 3 1 0 0 00 6 2 00 3 0 3 8 00
15 1104 Monthly telephone bill Telephone Expense 617 2 3 8 00 2 3 8 00
25 1105 Jaunda’s Coat Shop 1 5 0 0 00 1 5 0 0 00
28 1106 Motor Speedway 6 4 0 0 00 1 2 8 00 6 2 7 2 00
30 1107 Monthly salaries Salaries Expense 614 5 8 0 0 00 5 8 0 0 00
30 Totals 12 5 7 0 00 9 4 3 8 00 1 9 0 00 21 8 1 8 00
( 2 0 5 ) ( X ) ( 5 0 4 ) ( 1 0 1 )
OTHER ACCOUNTS DEBITPURCHASES
DISCOUNT
CREDIT
8
CASH
CREDITAMOUNT
CASH PAYMENTS JOURNAL
DATE
CK.
NO. DESCRIPTION
POST.
REF.
ACCOUNTS
PAYABLE
DEBIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-27
PROBLEM 9.4A (continued)
ACCOUNT Cash ACCOUNT NO.
2016
June 1 Balance ✔ 21 9 0 0 00
30 CP8 21 8 1 8 00 8 2 00
ACCOUNT Equipment ACCOUNT NO.
2016
June 1 Balance ✔ 66 0 0 0 00
5 J20 5 5 0 0 00 71 5 0 0 00
21 J20 10 5 0 0 00 82 0 0 0 00
ACCOUNT Notes Payable ACCOUNT NO.
2016
June 21 J20 10 5 0 0 00 10 5 0 0 00
GENERAL LEDGER
101
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT CREDIT
131
DEBIT
BALANCE
DEBIT
DEBIT CREDITDATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
201
CREDIT
BALANCE
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-28
PROBLEM 9.4A (continued)
ACCOUNT Accounts Payable ACCOUNT NO.
2016
June 1 Balance ✔ 4 9 8 0 00
5 J20 5 5 0 0 00 10 4 8 0 00
18 J20 8 0 0 00 9 6 8 0 00
30 P8 13 8 8 0 00 23 5 6 0 00
30 CP8 12 5 7 0 00 10 9 9 0 00
ACCOUNT Purchases ACCOUNT NO.
2016
June 30 P8 13 8 8 0 00 13 8 8 0 00
ACCOUNT Purchases Returns and Allowances ACCOUNT NO.
2016
June 18 J20 8 0 0 00 8 0 0 00
ACCOUNT Purchases Discounts ACCOUNT NO.
2016
June 30 CP8 1 9 0 00 1 9 0 00
504
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
503
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
501
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
CREDIT
GENERAL LEDGER
205
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-29
PROBLEM 9.4A (continued)
ACCOUNT Rent Expense ACCOUNT NO.
2016
June 1 CP8 3 4 0 0 00 3 4 0 0 00
ACCOUNT Salaries Expense ACCOUNT NO.
2016
June 30 CP8 5 8 0 0 00 5 8 0 0 00
ACCOUNT Telephone Expense ACCOUNT NO.
2016
June 15 CP8 2 3 8 00 2 3 8 00
13 8 8 0 00
8 0 0 00
Purchases Discount 1 9 0 00 9 9 0 00
12 8 9 0 00
Analyze: Total liabilities at month-end were $21,490.
Less: Purchases Returns and Allowances
Net Purchases
GENERAL LEDGER
Purchases
The Bike and Hike Outlet
Partial Income Statement
Month Ended June 30, 2016
611
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
614
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
617
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-30
PROBLEM 9.5A
2 5 7 9 00
2 5 0 00
2 8 2 9 00
Check 1214 of April 28 1 8 00
Check 1215 of April 30 1 6 00
Total outstanding checks 3 4 00
2 7 9 5 00
3 0 1 2 00
Deductions:
NSF check 2 1 0 00
Bank service charge 7 00 2 1 7 00
Adjusted book balance 2 7 9 5 00
PAGE
POST.
REF.
1 2016 1
2 April 30 Accounts Receivable/Doris Fisher 2 1 0 00 2
3 Cash 2 1 0 00 3
4 To record NSF check returned by bank 4
5 5
6 30 Miscellaneous Expense 7 00 6
7 Cash 7 00 7
8 To record bank charges 8
9 9
Analyze: Outstanding checks are 1214 and 1215 totaling $34.00.
DATE DESCRIPTION DEBIT
PHF Vacations
Bank Reconciliation Statement
April 30, 2016
Balance on bank statement
CREDIT
1GENERAL JOURNAL
Deductions for outstanding checks:
Adjusted bank balance
Additions:
Balance in books
Deposit of April 30 in transit
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-31
PROBLEM 9.6A
13 2 4 7 00
1 5 5 0 00
Deposit of August 31 in transit 7 1 1 00 2 2 6 1 00
15 5 0 8 00
Check 712 1 2 0 00
Check 713 1 3 5 00
Check 716 2 4 8 00
Check 736 5 8 7 00
Check 739 8 8 00
Check 741 1 3 0 00
1 3 0 8 00
14 2 0 0 00
12 3 7 0 00
Additions:
Note receivable collected by bank 2 1 3 4 00
Interest on note receivable 7 3 00 2 2 0 7 00
14 5 7 7 00
Deductions:
NSF check from Art Corts 3 7 0 00
Bank service charge 7 00 3 7 7 00
Adjusted book balance 14 2 0 0 00
Sonoma Inn
Bank Reconciliation Statement
Adjusted bank balance
Deposit of August 30 in transit
Balance in books
Total outstanding checks
August 31, 2016
Balance on bank statement
Additions:
Deductions for outstanding checks:
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-32
PROBLEM 9.6A (continued)
PAGE
POST.
REF.
1 2016 1
2 Aug. 31 2 2 0 7 00 2
3 2 1 3 4 00 3
4 7 3 00 4
5 To record receipt of amount due on note 5
6 plus interest collected by bank in August 6
7 7
8 31 Accounts Receivable/Art Corts 3 7 0 00 8
9 3 7 0 00 9
10 To record NSF check returned by bank 10
11 11
12 31 Miscellaneous Expense 7 00 12
13 Cash 7 00 13
14 To record bank service charge for August 14
15 15
Analyze: Net effect on the accounting equation of the journal entries recorded as a result of the bank
reconciliation was an increase in assets by $66 and an increase in equity by $66 ($73 - $7).
PROBLEM 9.7A
Balance in books 20 3 2 5 00
Additions:
Check 2206 dated April 17 was recorded as $715;
check was actually written for $24 6 9 1 00
21 0 1 6 00
Deductions:
Check 2247 dated April 20 was recorded as $130;
check was actually written for $184 5 4 00
Adjusted book balance 20 9 6 2 00
Notes Receivable
Cash
CREDIT
10
DEBITDATE DESCRIPTION
GENERAL JOURNAL
Interest Income
A. Fontes Company
Bank Reconciliation Statement
April 30, 2016
Cash
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-33
PROBLEM 9.7A (continued)
PAGE
POST.
REF.
1 2016 1
2 Apr. 30 6 9 1 00 2
3 6 9 1 00 3
4 To correct error in entry for check 2206 4
5 of April 17 5
6 6
7 30 5 4 00 7
8 Cash 5 4 00 8
9 To correct error in entry for check 2247 9
10 of April 20 10
11 11
12 12
13 13
Analyze: Net income would have been overstated by $54.
Utilities Expense
Supplies
Cash
11
DEBIT CREDITDATE DESCRIPTION
GENERAL JOURNAL
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-34
PROBLEM 9.8A
Balance on Bank Statement 28 7 6 0 00
Additions:
Deposit of July 31 in transit 9 0 0 00
Check 1422 for $1,200 incorrectly charged as $1,280 8 0 00 9 8 0 00
29 7 4 0 00
Deductions for outstanding checks:
Check 1429 1 2 4 9 00
Check 1430 1 4 1 00
Total outstanding checks 1 3 9 0 00
Adjusted Bank Balance 28 3 5 0 00
Balance in Books 14 2 4 2 00
Additions:
EFT received on account from Foncier Ricard 14 4 0 0 00
28 6 4 2 00
Deductions:
Check 1425 written for $90; incorrectly recorded as $60 3 0 00
Online payment on July 31 to CentralComm 2 6 2 00 2 9 2 00
Adjusted Book Balance 28 3 5 0 00
PAGE
POST.
REF.
1 2016 1
2 July 31 14 4 0 0 00 2
3 Accounts Receivable/Foncier Ricard 14 4 0 0 00 3
4 EFT received on account from Foncier Ricard 4
5 5
6 31 3 0 00 6
7 Cash 3 0 00 7
8 To correct error for Check 1425 8
9 9
10 31 2 6 2 00 10
11 Cash 2 6 2 00 11
12 To record online payment to CentralComm 12
13 13
Analyze: Total expenses will increase by $262 as a result of the general journal entries recorded.
Western Imports
Bank Reconciliation
31-Jul-16
Telephone Expense
CREDIT
19
DEBITDATE DESCRIPTION
Cash
Supplies
GENERAL JOURNAL
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-35
PROBLEM 9.1B
PAGE
ACCOUNT NAME
POST.
REF.
2016
June 3
Do It Yourself Copy
Center
5 0 0 00 5 0 0 00
4 Collected note and
interest
Notes Receivable 115 1 7 0 0 00
Interest Income 791 1 0 2 00 1 8 0 2 00
5 Refund for damaged
supplies
Office Supplies 129 3 1 0 00 3 1 0 00
7 Cash sales 1 3 6 00 1 7 0 0 00 1 8 3 6 00
10 Linda Park 1 2 0 0 00 1 2 0 0 00
13 Additional investment Tina Kapoor, Capital 302 13 0 0 0 00 13 0 0 0 00
14 Cash sales 1 2 8 00 1 6 0 0 00 1 7 2 8 00
18 Karen Cho 1 7 6 0 00 1 7 6 0 00
19 Nancy Matthews 1 3 0 0 00 1 3 0 0 00
21 Cash sales 1 4 4 00 1 8 0 0 00 1 9 4 4 00
27 Alex Holloway 8 5 0 00 8 5 0 00
30 Totals 5 6 1 0 00 4 0 8 00 5 1 0 0 00 15 1 1 2 00 26 2 3 0 00
( 1 1 1 ) ( 2 3 1 ) ( 4 0 1 ) ( X ) ( 1 0 2 )
DATE DESCRIPTION
POST.
REF.
14
SALES TAX
PAYABLE
CREDIT
SALES
CREDIT
OTHER ACCOUNTS CREDIT
CASH DEBITAMOUNT
CASH RECEIPTS JOURNAL
ACCOUNTS
RECEIVABLE
CREDIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-36
PROBLEM 9.1B (continued)
ACCOUNT Cash ACCOUNT NO.
2016
June 1 Balance ✔ 1 2 0 0 00
30 CR14 26 2 3 0 00 27 4 3 0 00
ACCOUNT Accounts Receivable ACCOUNT NO.
2016
June 1 Balance ✔ 8 4 0 0 00
30 CR14 5 6 1 0 00 2 7 9 0 00
ACCOUNT Notes Receivable ACCOUNT NO.
2016
June 1 Balance ✔ 1 7 0 0 00
4 CR14 1 7 0 0 00 – 0 –
ACCOUNT Office Supplies ACCOUNT NO.
2016
June 1 Balance ✔ 1 0 0 0 00
5 CR14 3 1 0 00 6 9 0 00
CREDIT
CREDIT
129
CREDIT
BALANCE
DEBIT
DEBIT
DATE DESCRIPTION
POST.
REF. DEBIT
CREDIT
115
DATE
BALANCEPOST.
REF.DESCRIPTION
BALANCE
DEBIT
CREDIT
111
CREDIT
BALANCE
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
DEBIT
DEBIT
GENERAL LEDGER
102
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-37
PROBLEM 9.1B (continued)
ACCOUNT Sales Tax Payable ACCOUNT NO.
2016
June 1 Balance ✔ 4 0 0 00
30 CR14 4 0 8 00 8 0 8 00
ACCOUNT Tina Kapoor, Capital ACCOUNT NO.
2016
June 1 Balance ✔ 7 6 0 0 00
13 CR14 13 0 0 0 00 20 6 0 0 00
ACCOUNT Sales ACCOUNT NO.
2016
June 30 CR14 5 1 0 0 00 5 1 0 0 00
ACCOUNT Interest Income ACCOUNT NO.
2016
June 4 CR14 1 0 2 00 1 0 2 00
Analyze: Total assets for The Book Peddler at June 30, 2016 are $30,910 ($27,430 + $2,790 + $690).
231
DATE DESCRIPTION
POST.
REF. CREDIT
BALANCE
DEBIT
GENERAL LEDGER
BALANCE
DEBITDEBIT CREDIT CREDIT
DEBIT CREDIT
302
DATE DESCRIPTION
POST.
REF.
DATE DESCRIPTION
DEBIT
401
POST.
REF.
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
CREDIT
791
CREDIT
BALANCE
DEBIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-38
PROBLEM 9.2B
PAGE
ACCOUNT NAME
POST.
REF.
2016
Sept. 1 401 Tax remittance Sales Tax Payable 231 1 3 4 4 00 1 3 4 4 00
2 402 Monthly rent Rent Expense 620 1 7 0 0 00 1 7 0 0 00
4 403 Established petty cash Petty Cash Fund 105 1 0 0 00 1 0 0 00
5 404 Elegant Glassware 1 5 0 0 00 3 0 00 1 4 7 0 00
9 405 Store equipment Equipment 141 1 0 0 0 00 1 0 0 0 00
13 406 Taylor Company 9 7 0 00 9 7 0 00
14 407 Cash refund Sales Returns & Allowances 451 4 2 5 00 4 2 5 00
18 408 Monthly telephone bill Telephone Expense 626 1 8 7 00 1 8 7 00
21 409 African Imports 8 5 0 00 1 7 00 8 3 3 00
24 410 Paid promissory note Notes Payable 201 1 0 0 0 00
and interest Interest Expense 611 4 0 00 1 0 4 0 00
26 411 Atlantic Ceramics 1 2 4 0 00 1 2 4 0 00
28 412 Personal withdrawal Fred Lynn, Drawing 302 1 5 0 0 00 1 5 0 0 00
30 413 Monthly salaries Salaries Expense 623 2 5 0 0 00 2 5 0 0 00
30 414 Replenish petty cash Delivery Expense 511 2 2 00
Miscellaneous Expense 614 2 9 00
Fred Lynn, Drawing 302 1 0 00 6 1 00
30 Totals 4 5 6 0 00 9 8 5 7 00 4 7 00 14 3 7 0 00
( 2 0 5 ) ( X ) ( 5 0 4 ) ( 1 0 1 )
DATE
CASH PAYMENTS JOURNAL
CK.
NO. DESCRIPTION
POST.
REF.
ACCOUNTS
PAYABLE
DEBIT
OTHER ACCOUNTS DEBIT
12
CASH
CREDITAMOUNT
PURCHASES
DISCOUNT
CREDIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-39
PROBLEM 9.2B (continued)
PAGE
ACCOUNT NAME
2016
Sept. 4 — Establish fund 1 0 0 00
6 1 Delivery service 1 2 00 1 2 00
11 2 Bought office supplies 1 6 00 1 6 00
16 3 Personal withdrawal 1 0 00 Fred Lynn, Drawing 1 0 00
23 4 Bought stamps 1 3 00 1 3 00
27 5 Delivery service 1 0 00 1 0 00
30 — Totals 1 0 0 00 6 1 00 2 2 00 2 9 00 1 0 00
30 — Balance on hand 3 9 00
1 0 0 00 1 0 0 00
30 — Balance on hand 3 9 00
30 — Replenish fund 6 1 00
30 — Carried forward 1 0 0 00
PETTY CASH ANALYSIS SHEET 12
DISTRIBUTION OF PAYMENTS
OTHER ACCOUNTS DEBIT
DATE
VOU.
NO. DESCRIPTION RECEIPTS PAYMENTS AMOUNT
MISC.
EXPENSE
DEBIT
DELIVERY
EXPENSE
DEBIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-40
PROBLEM 9.2B (continued)
ACCOUNT Cash ACCOUNT NO.
2016
Sept. 1 Balance ✔ 21 5 3 0 00
30 CP12 14 3 7 0 00 7 1 6 0 00
ACCOUNT Petty Cash Fund ACCOUNT NO.
2016
Sept. 4 CP12 1 0 0 00 1 0 0 00
ACCOUNT Equipment ACCOUNT NO.
2016
Sept. 1 Balance ✔ 43 0 0 0 00
9 CP12 1 0 0 0 00 44 0 0 0 00
ACCOUNT Notes Payable ACCOUNT NO.
2016
Sept. 1 Balance ✔ 1 0 0 0 00
24 CP12 1 0 0 0 00 – 0 –
CREDIT
CREDIT
201
CREDIT
BALANCE
DEBIT
DEBIT
DATE DESCRIPTION
POST.
REF. DEBIT
CREDIT
141
DATE
BALANCEPOST.
REF.DESCRIPTION
BALANCE
DEBIT
CREDIT
105
CREDIT
BALANCE
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
DEBIT
DEBIT
GENERAL LEDGER
101
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-41
PROBLEM 9.2B (continued)
ACCOUNT Accounts Payable ACCOUNT NO.
2016
Sept. 1 Balance ✔ 9 8 0 0 00
30 CP12 4 5 6 0 00 5 2 4 0 00
ACCOUNT Sales Tax Payable ACCOUNT NO.
2016
Sept. 1 Balance ✔ 1 3 4 4 00
1 CP12 1 3 4 4 00 – 0 –
ACCOUNT Fred Lynn, Drawing ACCOUNT NO.
2016
Sept. 28 CP12 1 5 0 0 00 1 5 0 0 00
30 CP12 1 0 00 1 5 1 0 00
ACCOUNT Sales Returns and Allowances ACCOUNT NO.
2016
Sept. 14 CP12 4 2 5 00 4 2 5 00
GENERAL LEDGER
205
DATE DESCRIPTION
POST.
REF. CREDIT
BALANCE
DEBIT
BALANCE
DEBITDEBIT CREDIT CREDIT
DEBIT CREDIT
231
DATE DESCRIPTION
POST.
REF.
DATE DESCRIPTION
DEBIT
302
POST.
REF.
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
CREDIT
451
CREDIT
BALANCE
DEBIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-42
PROBLEM 9.2B (continued)
ACCOUNT Purchases Discounts ACCOUNT NO.
2016
Sept. 30 CP12 4 7 00 4 7 00
ACCOUNT Delivery Expense ACCOUNT NO.
2016
Sept. 30 CP12 2 2 00 2 2 00
ACCOUNT Interest Expense ACCOUNT NO.
2016
Sept. 24 CP12 4 0 00 4 0 00
ACCOUNT Miscellaneous Expense ACCOUNT NO.
2016
Sept. 30 CP12 2 9 00 2 9 00
CREDIT
CREDIT
614
CREDIT
BALANCE
DEBIT
DEBIT
DATE DESCRIPTION
POST.
REF. DEBIT
CREDIT
611
DATE
BALANCEPOST.
REF.DESCRIPTION
BALANCE
DEBIT
CREDIT
511
CREDIT
BALANCE
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
DEBIT
DEBIT
GENERAL LEDGER
504
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-43
PROBLEM 9.2B (continued)
ACCOUNT Rent Expense ACCOUNT NO.
2016
Sept. 2 CP12 1 7 0 0 00 1 7 0 0 00
ACCOUNT Salaries Expense ACCOUNT NO.
2016
Sept. 30 CP12 2 5 0 0 00 2 5 0 0 00
ACCOUNT Telephone Expense ACCOUNT NO.
2016
Sept. 18 CP12 1 8 7 00 1 8 7 00
Analyze: Total debits made to general ledger liability accounts during the month of September
were $6,904.
GENERAL LEDGER
620
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT CREDIT
623
DEBIT
BALANCE
DEBIT
DEBIT CREDITDATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
626
CREDIT
BALANCE
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-44
PROBLEM 9.3B
PAGE
INVOICE
NO. CUSTOMER’S NAME
POST.
REF.
1 2016 1
2 Aug. 2 2978 Jamison Builders 19 4 5 0 00 2
3 7 2979 Branch Construction Co 18 5 5 0 00 3
4 22 2980 Contemporary Homes 6 8 5 0 00 4
5 31 2981 Denton County Builders 17 4 4 0 00 5
6 31 Total 62 2 9 0 00 6
7 (1 1 1/ 4 01) 7
PAGE
A/C NAME
POST.
REF.
2016
Aug. 1 6 6 0 0 00 1 3 2 00 6 4 6 8 00
11 19 4 5 0 00 3 8 9 00 19 0 6 1 00
14 7 0 5 0 00 7 0 5 0 00
16 18 5 5 0 00 3 7 1 00 18 1 7 9 00
24 6 0 0 0 00 6 0 0 0 00
31 50 6 0 0 00 7 0 5 0 00 8 9 2 00 56 7 5 8 00
( 1 1 1 ) ( 4 0 1 ) ( 4 5 2 ) ( 1 0 1 )
10
CASH DRAMT
SALES
CREDIT
OTHER ACCOUNTS CREDIT
SALES DIS.
DR
Totals
Garcia Homes Center
Branch Construction Co.
Cash Sales
Jamison Builders
Construction Supply Co.
A/C REC. CR
DATE
ACCOUNTS
RECEIVABLE
DR./ SALES CR.
10SALES JOURNAL
CASH RECEIPTS JOURNAL
DESCRIPTIONDATE
POST.
REF.
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-45
PROBLEM 9.3B (continued)
PAGE
POST.
REF.
1 2016 1
2 Aug. 4 109 12 0 0 0 00 2
111
✔
4 Received a 3-month, 12% note from Davis 4
5 Custom Homes to replace open account 5
6 6
7 26 451 5 5 0 00 7
111
✔
9 Accepted a return of damaged merchandise, 9
10 Credit Memo 101; sale originally made on 10
11 Invoice 2980, August 22 11
12 12
ACCOUNT Cash ACCOUNT NO.
2016
Aug. 1 ✔ 15 0 7 0 00
31 CR10 56 7 5 8 0000 71 8 2 8 00
ACCOUNT Notes Receivable ACCOUNT NO.
2016
Aug. 4 J24 12 0 0 0 00 12 0 0 0 00
DEBIT
DEBIT CREDIT
BALANCE
DATE
POST.
REF.
BALANCE
DATE DESCRIPTION
GENERAL JOURNAL
CREDITDEBIT
101
109
GENERAL LEDGER
8 Accounts Receivable/Contemporary Homes
Balance
DESCRIPTION
CREDIT DEBIT CREDIT
805 5
POST.
REF.
Sales Returns and Allowances
Accounts Receivable/Davis Custom Homes 00
00
12 0 0
3
3
Notes Receivable
24
DATE DESCRIPTION DEBIT CREDIT
0
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-46
PROBLEM 9.3B (continued)
ACCOUNT Accounts Receivable ACCOUNT NO.
2016
Aug. 1 Balance ✔ 22 5 0 7 00
4 J24 12 0 0 0 00 10 5 0 7 00
26 J24 5 5 0 00 9 9 5 7 00
31 S10 62 2 9 0 00 72 2 4 7 00
31 CR10 50 6 0 0 00 21 6 4 7 00
ACCOUNT Sales ACCOUNT NO.
2016
Aug. 31 S10 62 2 9 0 00 62 2 9 0 00
31 CR10 7 0 5 0 00 69 3 4 0 00
ACCOUNT Sales Returns and Allowances ACCOUNT NO.
2016
Aug. 26 J24 5 5 0 00 5 5 0 00
ACCOUNT Sales Discounts ACCOUNT NO.
2016
Aug. 31 CR10 8 9 2 00 8 9 2 00
401
451
452
BALANCE
DEBIT CREDIT
CREDIT
GENERAL LEDGER
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT
111
CREDIT
CREDIT
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT
DATE DESCRIPTION
POST.
REF. DEBIT
DATE DESCRIPTION
POST.
REF. DEBIT
BALANCE
DEBIT CREDITCREDIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-47
PROBLEM 9.3B (continued)
69 3 4 0 00
5 5 0 00
Sales Discounts 8 9 2 00 1 4 4 2 00
Net Sales 67 8 9 8 00
Analyze: Total sales on account in August 2016 were $61,740 ($62,290 - $550).
PAGE
PURCHASED
FROM
INVOICE
NO.
INVOICE
DATE TERMS
POST.
REF.
2016
Dec. 1 Alexis Products for Homes 6559 11/28 2/10, n/30 6 6 0 0 00
10 Baxter Corporation 5119 12/7 2/10, n/30 9 2 0 0 00
18 Household Appliance Center 7238 12/16 3/10, n/30 12 4 0 0 00
22 Zale Corporation 3161 12/19 n/30 5 8 0 0 00
31 Total 34 0 0 0 00
(50 1 / 2 05)
Royal Construction Company
Partial Income Statement
Month Ended August 31, 2016
Revenue
Sales
DATE
PURCHASES JOURNAL
Less: Sales Returns and Allowances
PROBLEM 9.4B
12
PURCHASES
DR./
ACCOUNTS
PAYABLE
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distribution in any manner. 9-48
PROBLEM 9.4B (continued)
PAGE
ACCOUNT NAME
POST.
REF.
2016
Dec. 2 1801 Monthly rent Rent Expense 611 3 0 0 0 00 3 0 0 0 00
6 1802 Alexis Products for Homes 6 6 0 0 00 1 3 2 00 6 4 6 8 00
13 1803 Monthly telephone bill Telephone Expense 617 2 6 5 00 2 6 5 00
15 1804 Baxter Corporation 9 2 0 0 00 1 8 4 00 9 0 1 6 00
21 1805 Chain Lighting and Appliances 4 2 0 0 00 4 2 0 0 00
24 1806 Household Appliance 12 4 0 0 00 3 7 2 00 12 0 2 8 00
31 1807 Monthly salaries Salaries Expense 614 6 5 0 0 00 6 5 0 0 00
31 Totals 32 4 0 0 00 9 7 6 5 00 6 8 8 00 41 4 7 7 00
( 2 0 5 ) ( X ) ( 5 0 4 ) ( 1 0 1 )
POST.
REF.
ACCOUNTS
PAYABLE
DEBIT
OTHER ACCOUNTS DEBIT PURCHASES
DISCOUNT
CREDIT
CASH
CREDITAMOUNT
CASH PAYMENTS JOURNAL 12
DATE
CK.
NO. DESCRIPTION
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-49
PROBLEM 9.4B (continued)
PAGE
POST.
REF.
1 2016 1
2 Dec. 4 131 14 0 0 0 00 2
3 201 14 0 0 0 00 3
4 4
5 5
6 6
7 20 131 6 0 0 0 00 7
205
✔
9 9
10 10
11 11
205
✔
13 503 1 0 5 0 00 13
14 14
15 15
16 16
17 17
dated December 17, payable in 45 days
Purchased new store equipment, Inv. 536,
Company to purchase new store equipment
Credit Memo 201; original purchase made on
Invoice 3161, December 19
12
Purchases Returns and Allowances
Returned damaged goods, receiving
1 0 5 012 28 Accounts Payable/Zale Corporation
0 00
00
86 0 0
Equipment
Notes Payable
Equipment
Issued 2-month, 10% note to Kesterson
8 Accounts Payable/Safety Security Systems, Inc.
GENERAL JOURNAL 30
DATE DESCRIPTION DEBIT CREDIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-50
PROBLEM 9.4B (continued)
ACCOUNT Cash ACCOUNT NO.
2016
Dec. 1 Balance ✔ 60 7 0 0 00
31 CP12 41 4 7 7 00 19 2 2 3 00
ACCOUNT Equipment ACCOUNT NO.
2016
Dec. 1 Balance ✔ 68 0 0 0 00
4 J30 14 0 0 0 00 82 0 0 0 00
20 J30 6 0 0 0 00 88 0 0 0 00
ACCOUNT Notes Payable ACCOUNT NO.
2016
Dec. 4 J30 14 0 0 0 00 14 0 0 0 00
GENERAL LEDGER
101
DATE DESCRIPTION
DEBIT
BALANCE
CREDIT
DATE
CREDIT
POST.
REF.
DEBIT
DEBITDESCRIPTION CREDIT
CREDIT
DATE
BALANCE
CREDIT
POST.
REF.
201
DEBIT
131
DEBIT
POST.
REF.
BALANCE
CREDIT
DEBITDESCRIPTION
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distribution in any manner. 9-51
PROBLEM 9.4B (continued)
ACCOUNT Accounts Payable ACCOUNT NO.
2016
Dec. 1 Balance ✔ 7 6 0 0 00
20 J30 6 0 0 0 00 13 6 0 0 00
28 J30 1 0 5 0 00 12 5 5 0 00
31 P12 34 0 0 0 00 46 5 5 0 00
31 CP12 32 4 0 0 00 14 1 5 0 00
ACCOUNT Purchases ACCOUNT NO.
2016
Dec. 31 P12 34 0 0 0 00 34 0 0 0 00
ACCOUNT Purchases Returns and Allowances ACCOUNT NO.
2016
Dec. 28 J30 1 0 5 0 00 1 0 5 0 00
ACCOUNT Purchases Discounts ACCOUNT NO.
2016
Dec. 31 CP12 6 8 8 00 6 8 8 00
GENERAL LEDGER
CREDITDATE
205
501
POST.
REF.DESCRIPTION DEBIT
BALANCE
CREDITDEBIT
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
503
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
504
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-52
PROBLEM 9.4B (continued)
ACCOUNT Rent Expense ACCOUNT NO.
2016
Dec. 2 CP12 3 0 0 0 00 3 0 0 0 00
ACCOUNT Salaries Expense ACCOUNT NO.
2016
Dec. 31 CP12 6 5 0 0 00 6 5 0 0 00
ACCOUNT Telephone Expense ACCOUNT NO.
2016
Dec. 13 CP12 2 6 5 00 2 6 5 00
34 0 0 0 00
Less: Purchases Returns and Allowances 1 0 5 0 00
Purchases Discount 6 8 8 00 1 7 3 8 00
32 2 6 2 00
Analyze: Business expense transactions took place on December 2, 13, and 31.
CREDIT
BALANCE
DEBIT CREDITDATE DESCRIPTION
POST.
REF. DEBIT
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDITDESCRIPTION
Net Purchases
GENERAL LEDGER
Purchases
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
Contemporary Appliance Center
Partial Income Statement
Month Ended December 31, 2016
611
614
617
BALANCE
DEBIT CREDIT
DATE
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-53
PROBLEM 9.5B
7 3 2 3 50
9 0 0 00
8 2 2 3 50
Check 108 of September 15 7 5 00
Check 112 of September 27 1 4 0 00
2 1 5 00
8 0 0 8 50
8 1 3 4 00
Deductions:
NSF check 1 1 8 00
Bank service charge 7 50 1 2 5 50
Adjusted book balance 8 0 0 8 50
PAGE
POST.
REF.
1 2016 1
2 Sept. 30 1 1 8 00 2
3 1 1 8 00 3
4 To record NSF check returned by bank 4
5 30 7 50 5
6 7 50 6
7 To record bank service charge for September 7
8 8
Analyze: Seven checks were paid.
1
DATE DESCRIPTION DEBIT CREDIT
Total outstanding checks
Cash
Accounts Receivable/Annette Cole
Cash
GENERAL JOURNAL
Deductions for outstanding checks:
Miscellaneous Expense
Peter Chen, Attorney-at-Law
Bank Reconciliation Statement
September 30, 2016
Balance on bank statement
Adjusted bank balance
Balance in books
Additions:
Deposit of September 28 in transit
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-54
PROBLEM 9.6B
8 4 4 2 03
1 0 9 4 07
9 5 3 6 10
Check 533 1 4 8 95
Check 535 1 2 2 50
Check 537 6 2 5 40
Total outstanding checks 8 9 6 85
8 6 3 9 25
7 3 1 8 59
Additions:
Note receivable collected by bank 1 4 5 0 00
Interest on note receivable 3 0 00 1 4 8 0 00
8 7 9 8 59
Deductions:
NSF check 1 4 5 00
Bank service charge 1 4 34 1 5 9 34
Adjusted book balance 8 6 3 9 25
Balance in books
Additions:
Deposit of July 31 in transit
Deductions for outstanding checks:
Adjusted bank balance
Gourmet Kitchen Appliances
Bank Reconciliation Statement
July 31, 2016
Balance on bank statement
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-55
PROBLEM 9.6B (continued)
PAGE
POST.
REF.
1 2016 1
2 July 31 1 4 8 0 00 2
3 1 4 5 0 00 3
4 3 0 00 4
5 5
6 6
7 7
8 31 1 4 5 00 8
9 1 4 5 00 9
10 10
11 11
12 31 1 4 34 12
13 Cash 1 4 34 13
14 14
15 15
Analyze: After all journal entries have been posted, the balance in the Cash account is $8,639.25.
PROBLEM 9.7B
Balance in books 19 8 5 1 00
Additions:
Check 1301 dated February 18 was recorded as $316;
check was actually written for $308 8 00
19 8 5 9 00
Deductions:
Check 1322 dated February 24 was recorded as $404;
check was actually written for $440 3 6 00
Adjusted book balance 19 8 2 3 00
Big Dudes Moving Corporation
Bank Reconciliation Statement
February 29, 2016
Cash
To record bank service charge for July
Miscellaneous Expense
To record NSF check returned by bank
Cash
Notes Receivable
Interest Income
Accounts Receivable/Robert Briggs
plus interest collected
To record receipt of amount due on note
GENERAL JOURNAL 1
DATE DESCRIPTION DEBIT CREDIT
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distribution in any manner. 9-56
PROBLEM 9.7B (continued)
PAGE
POST.
REF.
1 2016 1
2 Feb. 29 8 00 2
3 8 00 3
4 To correct error in entry for check 1301 4
5 of February 18 5
6 6
7 29 3 6 00 7
8 Cash 3 6 00 8
9 To correct error in entry for check 1322 9
10 of February 24 10
Analyze: The net change to the Cash account was an decrease of $28.
PROBLEM 9.8B
Balance on Bank Statement 29 7 3 4 00
Additions:
Deposit of November 30 in transit 1 2 2 4 00
30 9 5 8 00
Deductions:
Deductions for outstanding checks:
Check 4129 1 3 2 2 00
Check 4130 2 3 9 00
Total outstanding checks 1 5 6 1 00
Check 4122 written for $1,200, paid by bank as $1,000 2 0 0 00
Adjusted Bank Balance 29 1 9 7 00
Balance in Books 16 6 3 0 00
Additions:
EFT received on account from Cantori Cucine 12 8 0 0 00
Check 4125 written for $890; incorrectly recorded as $980 9 0 00 12 8 9 0 00
29 5 2 0 00
Deductions:
Online payment on November 30 to ClearComm 3 2 3 00
Adjusted book balance 29 1 9 7 00
Euro Specialty Products
Bank Reconciliation
30-Nov-16
Cash
Hauling Expense
Telephone Expense
1
DATE DESCRIPTION DEBIT CREDIT
GENERAL JOURNAL
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-57
PROBLEM 9.8B (continued)
PAGE
1 2016 1
2 Nov. 30 Cash 12 8 0 0 00 2
3 Accounts Receivable/Cantori Cucine 12 8 0 0 00 3
4 EFT received on account from Cantori 4
5 Cucine 5
6 6
7 30 Cash 9 0 00 7
8 Equipment 9 0 00 8
9 To correct error for Check 4125 9
10 10
11 30 Telephone Expense 3 2 3 00 11
12 Cash 3 2 3 00 12
13 To record online payment to ClearComm 13
14 14
Analyze: The journal entries recorded as a result of the bank reconciliation decreased total
assets by $323.
CRITICAL THINKING PROBLEM 9.1
PAGE
1 2016 1
2 Sept. 3 1850 Pam Lawrence ✔ 7 0 2 00 5 2 00 6 5 0 00 2
3 8 1851 Henry Tolliver ✔ 1 0 2 6 00 7 6 00 9 5 0 00 3
4 19 1852 Rachel Carter ✔ 2 7 0 00 2 0 00 2 5 0 00 4
5 29 1853 Mesia Davis ✔ 1 2 9 6 00 9 6 00 1 2 0 0 00 5
6 30 Totals 3 2 9 4 00 2 4 4 00 3 0 5 0 00 6
7 ( 1 1 1 ) ( 2 3 1 ) ( 4 0 1 ) 7
44
CREDITDEBIT
POST.
REF.
GENERAL JOURNAL
DESCRIPTIONDATE
12SALES JOURNAL
ACCOUNTS
RECEIVABLE
DEBIT
SALES TAX
PAYABLE
CREDIT
SALES
CREDITDATE
SALES
SLIP
NO. CUSTOMER’S NAME
POST.
REF.
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distribution in any manner. 9-58
CRITICAL THINKING PROBLEM 9.1 (continued)
PAGE
PURCHASED
FROM
INVOICE
NUMBER
INVOICE
DATE TERMS
POST.
REF.
2016
Sept. 6
Reed Millings
Company 827 9/3 2/10, n/30 ✔ 4 4 5 0 00 4 4 5 0 00
14 Wells Products 9453 9/11 n/30 ✔ 3 7 8 4 00 3 7 0 0 00 8 4 00
21 Nelson Craft
Products
677 9/18 2/10, n/30 ✔ 2 8 0 0 00 2 8 0 0 00
27 Booker, Inc. 1368 9/23 n/45 ✔ 4 3 2 8 00 4 2 0 0 00 1 2 8 00
30 Totals 15 3 6 2 00 15 1 5 0 00 2 1 2 00
( 2 0 5 ) ( 5 0 1 ) ( 5 0 2 )
PURCHASES JOURNAL 12
DATE
ACCOUNTS
PAYABLE
PURCHASES
DEBIT
FREIGHT-IN
DEBIT
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distribution in any manner. 9-59
CRITICAL THINKING PROBLEM 9.1 (continued)
PAGE
POST.
REF.
1 2016 1
2 Sept. 8 121 3 7 0 00 2
205
✔ 3 7 0 00
4 Bought store supplies, Invoice 4204 dated 4
5 September 6, net amount due in 30 days 5
6 6
7 11 109 2 1 0 0 00 7
111✔
9 Received a 2-month, 10% note from 9
10 Jason Williams to replace open account 10
11 11
205
✔
13 201 5 5 0 0 00 13
14 Issued a 2-month, 12% note to McNight Corp. 14
15 15
16 16
17 23 451 5 0 00 17
18 Sales Tax Payable 231 4 00 18
111 5 4 00
✔
20 Granted allowance for damaged lamps, 20
21 Credit Memo 151; original sale made on 21
22 Sales Slip 1852, September 19 22
23 23
205
✔
25 Purchases Returns and Allowances 503 3 0 0 00 25
26 Returned a damaged rug, receiving 26
27 Credit Memo 110; original purchase made 27
28 on Invoice 677, September 18 28
29 29
Accounts Payable/Nelson Craft Products
GENERAL JOURNAL 32
DATE DESCRIPTION DEBIT CREDIT
Supplies
Notes Receivable
55
02 1 8Accounts Receivable/Jason Williams
Sales Returns and Allowances
Notes Payable
to replace open account
00
3Accounts Payable/Rocker Company
00 12
0 00
3
Accounts Payable/McNight Corporation12
8
17
00
19
24 24
19 Accounts Receivable/Rachel Carter
2403 0
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distribution in any manner. 9-60
CRITICAL THINKING PROBLEM 9.1 (continued)
PAGE
ACCOUNT NAME
POST.
REF.
2016
Sept. 1 David Prater ✔ 1 0 5 0 00 1 0 5 0 00
5 Additional investment Sergio Cortez, Capital 301 15 0 0 0 00 15 0 0 0 00
6 Cash sales 3 1 2 00 3 9 0 0 00 Cash Short or Over 611 ( 2 0 00) 4 1 9 2 00
13 Cash sales 3 0 8 00 3 8 5 0 00 4 1 5 8 00
15 Mesia Davis ✔ 1 2 6 0 00 1 2 6 0 00
20 Cash sales 3 2 8 00 4 1 0 0 00 Cash Short or Over 611 ( 9 00) 4 4 1 9 00
24 Robert Kent ✔ 1 7 3 0 00 1 7 3 0 00
27 Cash sales 3 8 4 00 4 8 0 0 00 5 1 8 4 00
30 Cash sales 1 2 0 00 1 5 0 0 00 Cash Short or Over 611 1 0 00 1 6 3 0 00
30 Totals 4 0 4 0 00 1 4 5 2 00 18 1 5 0 00 14 9 8 1 00 38 6 2 3 00
( 1 1 1 ) ( 2 3 1 ) ( 4 0 1 ) ( X ) ( 1 0 1 )
OTHER ACCOUNTS CREDIT
12
CASH DEBITAMOUNTDATE DESCRIPTION
POST.
REF.
ACCOUNTS
RECEIVABLE
CREDIT
SALES TAX
PAYABLE
CREDIT
CASH RECEIPTS JOURNAL
SALES
CREDIT
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distribution in any manner. 9-61
CRITICAL THINKING PROBLEM 9.1 (continued)
PAGE
ACCOUNT NAME
POST.
REF.
2016
Sept. 1 1401 Sadler Floor Coverings ✔ 1 9 4 0 00 1 9 4 0 00
2 1402 Monthly rent Rent Expense 614 2 5 0 0 00 2 5 0 0 00
6 1403 Freight charge Freight-In 502 1 5 8 00 1 5 8 00
11 1404 Reed Millings ✔ 4 4 5 0 00 8 9 00 4 3 6 1 00
22 1405 Utility bill Utilities Expense 619 3 0 6 00 3 0 6 00
25 1406 Cash purchase Purchases 501 3 6 0 0 00 3 6 0 0 00
26 1407 Nelson Craft Products ✔ 2 5 0 0 00 5 0 00 2 4 5 0 00
28 1408 Wells Products ✔ 2 1 2 0 00 2 1 2 0 00
30 1409 Monthly salaries Salaries Expense 617 6 8 0 0 00 6 8 0 0 00
30 Totals 11 0 1 0 00 13 3 6 4 00 1 3 9 00 24 2 3 5 00
( 2 0 5 ) ( X ) ( 5 0 4 ) ( 1 0 1 )
12
CASH
CREDITAMOUNTDATE
CK.
NO. DESCRIPTION
POST.
REF.
CASH PAYMENTS JOURNAL
ACCOUNTS
PAYABLE
DEBIT
OTHER ACCOUNTS DEBIT
PURCHASES
DISCOUNT
CREDIT
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distribution in any manner. 9-62
CRITICAL THINKING PROBLEM 9.1 (continued)
ACCOUNT Cash ACCOUNT NO.
2016
Sept. 1 Balance ✔ 18 9 4 5 00
30 CR12 38 6 2 3 00 57 5 6 8 00
30 CP12 24 2 3 5 00 33 3 3 3 00
ACCOUNT Notes Receivable ACCOUNT NO.
2016
Sept. 11 J32 2 1 0 0 00 2 1 0 0 00
ACCOUNT Accounts Receivable ACCOUNT NO.
2016
Sept. 1 Balance ✔ 6 1 4 0 00
11 J32 2 1 0 0 00 4 0 4 0 00
23 J32 5 4 00 3 9 8 6 00
30 S12 3 2 9 4 00 7 2 8 0 00
30 CR12 4 0 4 0 00 3 2 4 0 00
DEBITDEBIT CREDITCREDIT
POST.
REF.
DATE
BALANCE
CREDITDESCRIPTION DEBIT
GENERAL LEDGER
DEBIT
DATE
101
POST.
REF.DESCRIPTION
BALANCE
DEBIT
CREDIT
111
BALANCE
CREDIT
109
DATE DEBIT
POST.
REF.DESCRIPTION
CREDIT
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distribution in any manner. 9-63
CRITICAL THINKING PROBLEM 9.1 (continued)
ACCOUNT Supplies ACCOUNT NO.
2016
Sept. 1 Balance ✔ 7 1 0 00
8 J32 3 7 0 00 1 0 8 0 00
ACCOUNT Inventory ACCOUNT NO.
2016
Sept. 1 Balance ✔ 29 3 6 5 00
ACCOUNT Notes Payable ACCOUNT NO.
2016
Sept. 17 J32 5 5 0 0 00 5 5 0 0 00
ACCOUNT Accounts Payable ACCOUNT NO.
2016
Sept. 1 Balance ✔ 9 5 6 0 00
8 J32 3 7 0 00 9 9 3 0 00
17 J32 5 5 0 0 00 4 4 3 0 00
24 J32 3 0 0 00 4 1 3 0 00
30 P12 15 3 6 2 00 19 4 9 2 00
30 CP12 11 0 1 0 00 8 4 8 2 00
DESCRIPTION
POST.
REF. CREDIT
CREDIT
GENERAL LEDGER
DESCRIPTION
DEBIT
BALANCE
DEBIT CREDIT
121
DEBIT
BALANCE
DATE
131
DATE
DATE DESCRIPTION
DEBIT
BALANCEPOST.
REF.
CREDIT
DEBIT
DEBITCREDIT
BALANCE
CREDIT
CREDIT
201
205
CREDIT
DATE DESCRIPTION
POST.
REF. DEBIT
POST.
REF. DEBIT
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distribution in any manner. 9-64
CRITICAL THINKING PROBLEM 9.1 (continued)
ACCOUNT Sales Tax Payable ACCOUNT NO.
2016
Sept. 23 J32 4 00 4 00
30 S12 2 4 4 00 2 4 0 00
30 CR12 1 4 5 2 00 1 6 9 2 00
ACCOUNT Sergio Cortez, Capital ACCOUNT NO.
2016
Sept. 1 Balance ✔ 45 6 0 0 00
5 CR 12 15 0 0 0 00 60 6 0 0 00
ACCOUNT Sales ACCOUNT NO.
2016
Sept. 30 S12 3 0 5 0 00 3 0 5 0 00
30 CR12 18 1 5 0 00 21 2 0 0 00
ACCOUNT Sales Returns and Allowances ACCOUNT NO.
2016
Sept. 23 J32 5 0 00 5 0 00
GENERAL LEDGER
CREDIT
451
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
CREDIT
401
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT
CREDIT
301
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT
231
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-65
CRITICAL THINKING PROBLEM 9.1 (continued)
ACCOUNT Purchases ACCOUNT NO.
2016
Sept. 25 Balance CP12 3 6 0 0 00 3 6 0 0 00
30 P12 15 1 5 0 00 18 7 5 0 00
ACCOUNT Freight-In ACCOUNT NO.
2016
Sept. 6 CP12 1 5 8 00 1 5 8 00
30 P12 2 1 2 00 3 7 0 00
ACCOUNT Purchases Returns and Allowances ACCOUNT NO.
2016
Sept. 24 J32 3 0 0 00 3 0 0 00
ACCOUNT Purchases Discounts ACCOUNT NO.
2016
Sept. 30 CP12 1 3 9 00 1 3 9 00
GENERAL LEDGER
501
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
502
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
503
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
504
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
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distribution in any manner. 9-66
CRITICAL THINKING PROBLEM 9.1 (continued)
ACCOUNT Cash Short or Over ACCOUNT NO.
2016
Sept. 6 CR12 2 0 00 2 0 00
20 CR12 9 00 2 9 00
30 CR12 1 0 00 1 9 00
ACCOUNT Rent Expense ACCOUNT NO.
2016
Sept. 2 CP12 2 5 0 0 00 2 5 0 0 00
ACCOUNT Salaries Expense ACCOUNT NO.
2016
Sept. 30 CP12 6 8 0 0 00 6 8 0 0 00
ACCOUNT Utilities Expense ACCOUNT NO.
2016
Sept. 22 CP12 3 0 6 00 3 0 6 00
619
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
CREDIT
617
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
CREDIT
614
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT
GENERAL LEDGER
611
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-67
CRITICAL THINKING PROBLEM 9.1 (continued)
NAME Rachel Carter TERMS n/30
DESCRIPTION
POST.
REF.
2016
Sept. 19 Sales Slip 1852 S12 2 7 0 00 2 7 0 00
23 Credit Memo 151 J32 5 4 00 2 1 6 00
NAME Mesia Davis TERMS n/30
DESCRIPTION
POST.
REF.
2016
Sept. 1 Balance ✔ 1 2 6 0 00
15 CR12 1 2 6 0 00 – 0 –
29 Sales Slip 1853 S12 1 2 9 6 00 1 2 9 6 00
NAME Robert Kent TERMS n/30
DESCRIPTION
POST.
REF.
2016
Sept. 1 Balance ✔ 1 7 3 0 00
24 CR12 1 7 3 0 00 – 0 –
NAME Pam Lawrence TERMS n/30
DESCRIPTION
POST.
REF.
2016
Sept. 3 Sales Slip 1850 S12 7 0 2 00 7 0 2 00
CREDIT
BALANCE
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
DATE
DEBITDATE BALANCECREDIT
CREDIT
BALANCE
DATE DEBIT CREDIT
DATE BALANCE
DEBIT
DEBIT
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-68
CRITICAL THINKING PROBLEM 9.1 (continued)
NAME David Prater TERMS n/30
DESCRIPTION
POST.
REF.
2016
Sept. 1 Balance ✔ 1 0 5 0 00
1 CR12 1 0 5 0 00 – 0 –
NAME Henry Tolliver TERMS n/30
DESCRIPTION
POST.
REF.
2016
Sept. 8 Sales Slip 1851 S12 1 0 2 6 00 1 0 2 6 00
NAME Jason Williams TERMS n/30
DESCRIPTION
POST.
REF.
2016
Sept. 1 Balance ✔ 2 1 0 0 00
11 Transferred to Notes Receivable J32 2 1 0 0 00 – 0 –
2 1 6 00
1 2 9 6 00
7 0 2 00
1 0 2 6 00
3 2 4 0 00
DATE DEBIT CREDIT
DATE DEBIT CREDIT
Interior Designs Specialty Shop
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
DATE DEBIT CREDIT BALANCE
BALANCE
BALANCE
Schedule of Accounts Receivable
September 30, 2016
Mesia Davis
Pam Lawrence
Henry Tolliver
Total
Rachel Carter
© 2015 McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. 9-69
CRITICAL THINKING PROBLEM 9.1 (continued)
NAME Booker, Inc. TERMS
DESCRIPTION
POST.
REF.
2016
Sept. 27 Invoice 1368, 9/23/16 P12 4 3 2 8 00 4 3 2 8 00
NAME McKnight Corporation TERMS
DESCRIPTION
POST.
REF.
2016
Sept. 1 Balance ✔ 5 5 0 0 00
17 J32 5 5 0 0 00 – 0 –
NAME Nelson Craft Products TERMS
DESCRIPTION
POST.
REF.
2016
Sept. 21 Invoice 677, 9/18/16 P12 2 8 0 0 00 2 8 0 0 00
24 Credit Memo 110 J32 3 0 0 00 2 5 0 0 00
26 CP12 2 5 0 0 00 – 0 –
NAME Reed Millings Company TERMS
DESCRIPTION
POST.
REF.
2016
Sept. 6 Invoice 827, 9/3/16 P12 4 4 5 0 00 4 4 5 0 00
11 CP12 4 4 5 0 00 – 0 –
DATE DEBIT CREDIT
DEBIT CREDIT BALANCE
DATE DEBIT CREDIT BALANCE
DATE DEBIT CREDIT BALANCE
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
2/10, n/30
2/10, n/30
n/45
1/10, n/30
BALANCE
DATE
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distribution in any manner. 9-70
CRITICAL THINKING PROBLEM 9.1 (continued)
NAME Rocker Company TERMS
DESCRIPTION
POST.
REF.
2016
Sept. 8 Invoice 4204, 9/6/16 J32 3 7 0 00 3 7 0 00
NAME Sadler Floor Coverings TERMS
DESCRIPTION
POST.
REF.
2016
Sept. 1 Balance ✔ 1 9 4 0 00
1 CP12 1 9 4 0 00 – 0 –
NAME Wells Products TERMS
DESCRIPTION
POST.
REF.
2016
Sept. 1 Balance ✔ 2 1 2 0 00
14 Invoice 9453, 9/11/16 P12 3 7 8 4 00 5 9 0 4 00
28 CP12 2 1 2 0 00 3 7 8 4 00
4 3 2 8 00
3 7 0 00
3 7 8 4 00
8 4 8 2 00
Analyze: Total cash disbursements for the month of September were $24,235.
n/30
n/30
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
n/30
DATE
CREDIT BALANCE
DEBIT BALANCE
Total
DEBIT CREDIT BALANCE
Interior Design Specialty Shop
Schedule of Accounts Payable
September 30, 2016
CREDIT
Booker, Inc.
Rocker Company
Wells Products
DATE DEBIT
DATE
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distribution in any manner. 9-71
CRITICAL THINKING PROBLEM 9.2
16 5 8 9 00
4 8 8 2 00
21 4 7 1 00
Check 1590 2 6 3 00
Check 1680 1 2 1 8 00
Check 1724 4 8 6 00
Check 1780 7 9 2 00
Check 1784 1 8 1 9 00
Check 1806 3 8 4 00
4 9 6 2 00
16 5 0 9 00
Balance in books 18 7 8 6 00
Deduction: Bank service charge 1 0 00
18 7 7 6 00
Less: Cash shortage 2 2 6 7 00
16 5 0 9 00
Lucci Contractors
Bank Reconciliation Statement
August 31, 2016
Balance on bank statement
Addition: Deposit in transit, August 28
The cash shortage is the difference between the adjusted bank balance of $16,509 and the adjusted
book balance of $18,776. This is the amount needed to have both parts of the bank reconciliation
equal. Gloria concealed her theft by omitting checks 1590 ($263), 1680 ($1,218), and 1724 ($486).
The total amount of these checks is $1,967. Additionally, Gloria purposely understated the total
outstanding checks on her bank reconiliation by $300. The ommision of the three outstanding checks,
added with the $300 error, equals the total cash shortage of $2,267.
Since Gloria Harris handled all cash records, it was relatively easy for her to conceal her theft. Mike
should separate the jobs of receiving cash, making disbursements, maintaining accounting records, and
preparing bank reconciliations. If the company is not large enough to permit different people to handle
these jobs, then Mike should oversee the cash/accounting functions more closely, including
reconciliation of the bank account. If Mike does not have the time to do this, he should consider hiring
an independent accountant to review the cash/accounting records on a monthly basis and then report
any discrepancies to him.
Deductions for outstanding checks
Total outstanding checks
Adjusted bank balance
Adjusted book balance
Corrected adjusted book balance
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distribution in any manner. 9-72
SOLUTIONS TO BUSINESS CONNECTIONS
Managerial Focus:
1. a. No assurance money taken actually accounted for.
b. A gap in the control of cash exists, and unauthorized expenditures can be made.
c. Increases the opportunity for theft; no current cash position is known.
d. Increases risk of theft.
e. Weakens internal control over cash receipts.
2. To pay bills in a timely fashion, anticipate fund shortages or overages, and take advantage of
investment opportunities.
3. Errors noted by the bank may not be communicated to management.
4. a. Yes. Blank endorsements are not secure.
b. Yes. Checkbook should be kept in a locked drawer and should be available only to specified
employees.
c. Yes. To deter fraud, different tasks should be assigned to different employees.
d. Yes. Reconciliation should be done soon after receiving bank statement.
e. Yes. Financial records should be maintained for a reasonable number of years in case of a tax audit.
f. No. Most firms write several checks monthly, and the task would be impractical.
5. Essential assets should be safeguarded against loss and theft.
6. Up-to-date cash position; information for day-to-day business decisions.
7. Insures against losses.
8. Control of cash; audit trail.
Ethical Dilemma:
No, this was not an ethical action, as it was not Danny's money.
Danny should admit his theft and make arrangements to repay the amount stolen.
Financial Statement Analysis:
1. 6.1% ($2,494 ÷ $41,084)
2. Increased by $507 million ($2,494 - $1,987).
3. The balance reported for “Cash and cash equivalents” would be understated by $125,000.
Teamwork:
A Sales Invoice for each job should be given to each customer with a place to incorporate any
additions or subtractions for service. Any changes must be communicated to the home office and an
approval number will be given. The Sales Invoice, as well as each change, should be signed by the
customer. Only cash and money orders should be allowed since the families have just moved and do
not currently have a local bank.
Internet Connection:
Each bank should list the possible interest rates, both variable and fixed. Most banks will be within a
few tenths of points of each other.
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distribution in any manner. 9-73
SOLUTIONS TO PRACTICE TEST
Part A True-False
1. TRUE 12. FALSE
2. TRUE 13. TRUE
3. TRUE 14. FALSE
4. TRUE 15. TRUE
5. FALSE 16. FALSE
6. FALSE 17. TRUE
7. FALSE 18. TRUE
8. TRUE 19. TRUE
9. FALSE 20. FALSE
10. FALSE 21. TRUE
11. TRUE 22. FALSE
23. FALSE
Part B Matching
1. g
2. h
3. f
4.
5. d
6. b
7. c
8. e
9. i
10. j
11. k
12. l
13. m
a
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distribution in any manner. 9-74