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EX 5-1

Identify Postings from Revenue Journal

OBJ. 2

Using the following revenue journal for Westside Cleaners Inc., identify each of the posting references, indicated by a letter, as representing (1) posting to general ledger accounts or (2) posting to subsidiary ledger accounts:

EX 5-2

Accounts Receivable Ledger

OBJ. 2

Based on the data presented in Exercise 5-1, assume that the beginning balances for the customer accounts were zero, except for Jordan Inc., which had a $1,080 beginning balance. In addition, there were no collections during the period.
1. Set up a T account for Accounts Receivable and T accounts for the four accounts needed in the customer ledger.
2. Post to the T accounts.
3. Determine the balance in the accounts.
4. Prepare a listing of the accounts receivable customer balances as of May 31, 20Y3.
  
  Answer
  
  Check Figure: Total accounts receivable, $13,980

EX 5-3

Identify Journals

OBJ. 2

Assuming the use of a two-column (all-purpose) general journal, a revenue journal, and a cash receipts journal as illustrated in this chapter, indicate the journal in which each of the following transactions should be recorded:
1. Receipt of cash refund from overpayment of taxes.
2. Adjustment to record accrued salaries at the end of the year.
3. Providing services on account.
4. Investment of additional cash in the business by the owner.
5. Receipt of cash on account from a customer.
6. Receipt of cash for rent.
7. Receipt of cash from sale of office equipment.
8. Sale of used office equipment on account, at cost, to a neighboring business.
9. Closing of drawing account at the end of the year.
10. Providing services for cash.

EX 5-4

Identify Journals

OBJ. 2

Assuming the use of a two-column (all-purpose) general journal, a purchases journal, and a cash payments journal as illustrated in this chapter, indicate the journal in which each of the following transactions should be recorded:
1. Payment of six months’ rent in advance.
2. Purchase of an office computer on account.
3. Purchase of office supplies on account.
4. Adjustment to record depreciation at the end of the month.
5. Adjustment to record accrued salaries at the end of the period.
6. Purchase of services on account.
7. Adjustment to prepaid rent at the end of the month.
8. Purchase of office equipment for cash.
9. Adjustment to prepaid insurance at the end of the month.
10. Purchase of office supplies for cash.
11. Advance payment of a one-year fire insurance policy on the office.

EX 5-5

Identify Transactions in Accounts Receivable Subsidiary Ledger

OBJ. 2

The debits and credits from three related transactions are presented in the following customer’s account taken from the accounts receivable subsidiary ledger:

NAME ADDRESS	Mission Design 1319 Elm Street
Date	Item	Post. Ref.	Debit	Credit	Balance
20Y7
Apr. 3		R44	740		740
6		J11		60	680
24		CR81		680	—

Describe each transaction and identify the source of each posting.

EX 5-6

Prepare Journal Entries in a Revenue Journal

OBJ. 2

Shannon Consulting Company had the following transactions during the month of October:

Oct.	2.	Issued Invoice No. 321 to Pryor Corp. for services rendered on account, $1,625.
	3.	Issued Invoice No. 322 to Armor Inc. for services rendered on account, $850.
	14.	Issued Invoice No. 323 to Pryor Corp. for services rendered on account, $565.
	24.	Issued Invoice No. 324 to Rose Co. for services rendered on account, $2,320.
	29.	Collected Invoice No. 321 from Pryor Corp.

Record the October revenue transactions for Shannon Consulting Company in the following revenue journal format:

REVENUE JOURNAL

Date

Invoice No.

Account Debited

Post. Ref.

Accts. Rec. Dr. Fees Earned Cr.
What is the total amount posted to the accounts receivable and fees earned accounts from the revenue journal for October?
What is the October 31 balance of the Pryor Corp. customer account assuming a zero balance on October 1?

EX 5-7

Posting a Revenue Journal

OBJ. 2, 3

The revenue journal for Sapling Consulting Inc. follows. The accounts receivable controlling account has a July 1, 20Y2, balance of $625 consisting of an amount due from Aladdin Co. There were no collections during July.
1. 1. Prepare a T account for the accounts receivable customer accounts.
  2. Post the transactions from the revenue journal to the customer accounts and determine their ending balances.
  3. Prepare T accounts for the accounts receivable and fees earned accounts. Post control totals to the two accounts and determine the ending balances.
  4. Prepare a schedule of the customer account balances to verify the equality of the sum of the customer account balances and the accounts receivable controlling account balance.
  5. How might a computerized system differ from a revenue journal in recording revenue transactions?

EX 5-8

Accounts Receivable Subsidiary Ledger

OBJ. 2

The revenue and cash receipts journals for Birmingham Productions Inc. follow. The accounts receivable control account has a January 1, 20Y4, balance of $4,720 consisting of an amount due from Clear Pointe Studios Inc.

Prepare a listing of the accounts receivable customer balances and verify that the total agrees with the ending balance of the accounts receivable controlling account.

Answer

Check Figure: Accounts Receivable balance, January 31, $10,310

EX 5-9

Revenue and Cash Receipts Journals

OBJ. 2

Transactions related to revenue and cash receipts completed by Augusta Inc. during the month of March 20Y8 are as follows:

Mar.	2.	Issued Invoice No. 512 to Santorini Co., $2,135.
	4.	Received cash from CMI Inc., on account, for $475.
	8.	Issued Invoice No. 513 to Gabriel Co., $520.
	12.	Issued Invoice No. 514 to Yarnell Inc., $1,985.
	19.	Received cash from Yarnell Inc., on account, $1,305.
	20.	Issued Invoice No. 515 to Electronic Central Inc., $455.
	28.	Received cash from Marshall Inc. for services provided, $380.
	29.	Received cash from Santorini Co. for Invoice No. 512 of March 2.
	31.	Received cash from McCleary Co. for services provided, $195.

Prepare a single-column revenue journal and a cash receipts journal to record these transactions. Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. Place a check mark (✓) in the Post. Ref. column to indicate when the accounts receivable subsidiary ledger should be posted.

EX 5-10

Revenue and Cash Receipts Journals

OBJ. 2

Lasting Summer Inc. has $2,510 in the October 1 balance of the accounts receivable account consisting of $1,060 from Champion Co. and $1,450 from Wayfarer Co. Transactions related to revenue and cash receipts completed by Lasting Summer Inc. during the month of October 20Y5 are as follows:

Oct.	3.	Issued Invoice No. 622 for services provided to Palace Corp., $2,890.
	5.	Received cash from Champion Co., on account, for $1,060.
	8.	Issued Invoice No. 623 for services provided to Sunny Style Inc., $1,940.
	12.	Received cash from Wayfarer Co., on account, for $1,450.
	18.	Issued Invoice No. 624 for services provided to Amex Services Inc., $2,970.
	23.	Received cash from Palace Corp. for Invoice No. 622 of October 3.
	28.	Issued Invoice No. 625 to Wayfarer Co., on account, for $900.
	30.	Received cash from Rogers Co. for services provided, $120.

Prepare a single-column revenue journal and a cash receipts journal to record these transactions. Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. Place a check mark (✓) in the Post. Ref. column to indicate when the accounts receivable subsidiary ledger should be posted.

Answer

Check Figure: Revenue journal total, $8,700
Prepare a listing of the accounts receivable customer balances and verify that the total of the accounts receivable customer balances equals the balance of the accounts receivable controlling account on October 31, 20Y5.
Why does Lasting Summer Inc. use a subsidiary ledger for accounts receivable?

EX 5-11

Identify Postings from Purchases Journal

OBJ. 2

Using the following purchases journal, identify each of the posting references, indicated by a letter, as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary ledger account, or (3) that no posting is required:

EX 5-12

Identify Postings from Cash Payments Journal

OBJ. 2

Using the following cash payments journal, identify each of the posting references, indicated by a letter, as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary ledger account, or (3) that no posting is required.

EX 5-13

Identify Transactions in Accounts Payable Subsidiary Ledger

OBJ. 2

The debits and credits from three related transactions are presented in the following creditor’s account taken from the accounts payable ledger:

NAME ADDRESS	Apex Performance Co. 101 W. Stratford Ave.
Date	Item	Post. Ref.	Debit	Credit	Balance
20Y7
June 6		P49		12,000	12,000
14		J12	150		11,850
16		CP23	11,850		—

Describe each transaction and identify the source of each posting.

EX 5-14

Prepare Journal Entries in a Purchases Journal

OBJ. 2

Fernandez Services Inc. had the following transactions during the month of April:

Apr.	4.	Purchased office supplies from Officemate Inc. on account, $825.
	9.	Purchased office equipment on account from Tek Village Inc., $4,890.
	16.	Purchased office supplies from Officemate Inc. on account, $365.
	19.	Purchased office supplies from Paper-to-Go Inc. on account, $385.
	27.	Paid invoice on April 4 purchase from Officemate Inc.

Record the April purchase transactions for Fernandez Services Inc. in the following purchases journal format:

PURCHASES JOURNAL

Date

Account Credited

Post. Ref.

Accts. Payable Cr.

Office Supplies Dr.

Other Accounts Dr.

Post. Ref.

Amount
What is the total amount posted to the accounts payable and office supplies accounts from the purchases journal for April?
What is the April 30 balance of the Officemate Inc. creditor account assuming a zero balance on April 1?

EX 5-15

Posting a Purchases Journal

OBJ. 2, 3

The purchases journal for Newmark Exterior Cleaners Inc. follows. The accounts payable account has a March 1, 20Y2, balance of $580 for an amount owed to Nicely Co. No payments were made on creditor invoices during March.
1. Prepare a T account for the accounts payable creditor accounts.
2. Post the transactions from the purchases journal to the creditor accounts and determine their ending balances.
3. Prepare T accounts for the accounts payable control and cleaning supplies accounts. Post control totals to the two accounts, and determine their ending balances. Cleaning Supplies had a zero balance at the beginning of the month.
4. Prepare a schedule of the creditor account balances to verify the equality of the sum of the accounts payable creditor balances and the accounts payable controlling account balance.
  
  Answer
  
  Check Figure: Total accounts payable, $5,840
5. How might a computerized accounting system differ from the use of a purchases journal in recording purchase transactions?

EX 5-16

Accounts Payable Subsidiary Ledger

OBJ. 2

- The cash payments and purchases journals for Magnolia Landscaping follow. The accounts payable control account has a June 1, 20Y1, balance of $3,590, consisting of an amount owed to Augusta Sod Co.
  
  Prepare a schedule of the accounts payable creditor balances and determine that the total agrees with the ending balance of the accounts payable controlling account.
  
  Answer
  
  Check Figure: Accts. Pay., June 30, $34,740

EX 5-17

Purchases and Cash Payments Journals

OBJ. 2

Transactions related to purchases and cash payments completed by Wisk Away Cleaning Services Inc. during the month of May 20Y5 are as follows:

May	1.	Issued Check No. 57 to Bio Safe Supplies Inc. in payment of account, $345.
	3.	Purchased cleaning supplies on account from Brite N’ Shine Products Inc., $200.
	8.	Issued Check No. 58 to purchase equipment from Carson Equipment Sales, $2,860.
	12.	Purchased cleaning supplies on account from Porter Products Inc., $360.
	15.	Issued Check No. 59 to Bowman Electrical Service in payment of account, $145.
	18.	Purchased supplies on account from Bio Safe Supplies Inc., $240.
	20.	Purchased electrical repair services from Bowman Electrical Service on account, $110.
	26.	Issued Check No. 60 to Brite N’ Shine Products Inc. in payment of May 3 invoice.
	31.	Issued Check No. 61 in payment of salaries, $5,600.

Prepare a purchases journal and a cash payments journal to record these transactions. The forms of the journals are similar to those illustrated in the text. Place a check mark (✓) in the Post. Ref. column to indicate when the accounts payable subsidiary ledger should be posted. Wisk Away Cleaning Services Inc. uses the following accounts:

Cash	11
Cleaning Supplies	14
Equipment	18
Accounts Payable	21
Salary Expense	51
Electrical Service Expense	53

Answer

Check Figure: Purchases journal, Accts. Pay., Total, $910

EX 5-18

Purchases and Cash Payments Journals

OBJ. 2

Happy Tails Inc. has a September 1, 20Y4, accounts payable balance of $620, which consists of $320 due Labradore Inc. and $300 due Meow Mart Inc. Transactions related to purchases and cash payments completed by Happy Tails Inc. during the month of September 20Y4 are as follows:

Sept.	4.	Purchased pet supplies from Best Friend Supplies Inc. on account, $295.
	6.	Issued Check No. 345 to Labradore Inc. in payment of account, $320.
	13.	Purchased pet supplies from Poodle Pals Inc. on account, $790.
	18.	Issued Check No. 346 to Meow Mart Inc. in payment of account, $300.
	19.	Purchased office equipment from Office Helper Inc. on account, $2,510.
	23.	Issued Check No. 347 to Best Friend Supplies Inc. in payment of account from purchase made on September 4.
	27.	Purchased pet supplies from Meow Mart Inc. on account, $450.
	30.	Issued Check No. 348 to Jennings Inc. for cleaning expenses, $80.

1. Prepare a purchases journal and a cash payments journal to record these transactions. The forms of the journals are similar to those used in the text. Place a check mark (✓) in the Post. Ref. column to indicate when the accounts payable subsidiary ledger should be posted. Happy Tails Inc. uses the following accounts:
  
  Cash
  
  11
  
  Pet Supplies
  
  14
  
  Office Equipment
  
  18
  
  Accounts Payable
  
  21
  
  Cleaning Expense
  
  54
2. Prepare a listing of accounts payable creditor balances on September 30, 20Y4. Verify that the total of the accounts payable creditor balances equals the balance of the accounts payable controlling account on September 30, 20Y4.
3. Why does Happy Tails Inc. use a subsidiary ledger for accounts payable?

EX 5-19

Error in Accounts Payable Subsidiary Ledger

OBJ. 2

After Bunker Hill Assay Services Inc. had completed all postings for March in the current year (20Y4), the sum of the balances in the following accounts payable ledger did not agree with the $36,600 balance of the controlling account in the general ledger:

NAME ADDRESS	C. D. Greer and Son 972 S. Tenth Street
Date	Item	Post. Ref.	Debit	Credit	Balance
20Y4
Mar. 17		P30		3,750	3,750
27		P31		12,000	15,750

NAME ADDRESS	Carbon Supplies Inc. 1170 Mattis Avenue
Date	Item	Post. Ref.	Debit	Credit	Balance
20Y4
Mar. 1	Balance	✓			8,300
9		P30		7,000	14,000
12		J7	300		13,700
20		CP23	5,800		7,900

NAME ADDRESS	Cutler and Powell 717 Elm Street
Date	Item	Post. Ref.	Debit	Credit	Balance
20Y4
Mar. 1	Balance	✓			6,100
18		CP23	6,100		—
29		P31		7,800	7,800

NAME ADDRESS	Hudson Bay Minerals Co. 1240 W. Main Street
Date	Item	Post. Ref.	Debit	Credit	Balance
20Y4
Mar. 1	Balance	✓			4,750
10		CP22	4,750		—
17		P30		3,700	3,700
25		J7	3,000		1,700

NAME ADDRESS	Valley Power 915 E. Walnut Street
Date	Item	Post. Ref.	Debit	Credit	Balance
20Y4
Mar. 5		P30		3,150	3,150

Assuming that the controlling account balance of $36,600 has been verified as correct, (a) determine the error(s) in the preceding accounts and (b) prepare a listing of accounts payable creditor balances (from the corrected accounts payable subsidiary ledger).

EX 5-20

Identify Postings from Special Journals

OBJ. 2

Pinnacle Consulting Company makes most of its sales and purchases on credit. It uses the five journals described in this chapter (revenue, cash receipts, purchases, cash payments, and general). Identify the journal most likely used in recording the postings for selected transactions indicated by letter in the T accounts, as follows:

EX 5-21

Cash Receipts Journal

OBJ. 2

The following cash receipts journal headings have been suggested for a small service firm. List the errors you find in the headings.

CASH RECEIPTS JOURNAL

Page 12

Date

Account Credited

Post. Ref.

Fees Earned Cr.

Accts. Rec. Cr.

Cash Cr.

Other Accounts Dr.

EX 5-22

Computerized Accounting Systems

OBJ. 3

Most computerized accounting systems use electronic forms to record transaction information, such as the invoice form illustrated at the top of Exhibit 7 in this chapter.
1. Identify the key input fields (spaces) in an electronic invoice form.
2. What accounts are posted from an electronic invoice form?
3. Why aren’t special journal totals posted to control accounts at the end of the month in an electronic accounting system?

EX 5-23

Computerized Accounting Systems and E-Commerce

OBJ. 3, 4

Apple Inc.’s iTunes® provides digital products, such as music, video, and software. Purchases from iTunes are made with credit cards that are on file with the credit card processing company. Such transactions are considered cash transactions. Once the purchases are made, consumers can access the requested digital products for their enjoyment and the charges will show up on their credit card bills.
1. What kind of e-commerce application is described by Apple iTunes?
2. Assume you purchased 12 songs for $1.25 each on iTunes. Provide the journal entry generated by Apple’s e-commerce application.
3. If a special journal were used, what type of special journal would be used to record this sales transaction?
4. If an electronic form were used, what type of electronic form would be used to record this sales transaction?
5. Would it be appropriate for Apple to use either special journals or electronic forms for sales transactions from iTunes? Explain.

EX 5-24

E-Commerce

OBJ. 4

For each of the following companies, determine what they primarily sell and whether their e-commerce strategy is primarily business-to-consumer (B2C), business-to-business (B2B), or both. Use the Internet to investigate each company’s site in conducting your research.
1. Amazon.com
2. Dell Inc.
3. DowDuPont Inc.
4. Intuit Inc.
5. L.L. Bean, Inc.
6. W.W. Grainger, Inc.

EX 5-25

Segment Revenue Horizontal Analysis

OBJ. 5

Starbucks Corporation reported the following geographical segment revenues for a recent and a prior fiscal year:
1. 1. Prepare a horizontal analysis of the segment data using the prior year as the base year. Round whole percents to one decimal place.
  2. Prepare a vertical analysis of the segment data. Round whole percents to one decimal place.
  3. What conclusions can be drawn from your analyses?

EX 5-26

Segment Revenue Vertical Analysis

OBJ. 5

Twenty-First Century Fox, Inc. is one of the world’s largest entertainment companies that includes Twentieth Century Fox films, Fox Broadcasting, Fox News, the FX, and various satellite properties. The company provided revenue disclosures by its major product segments in the notes to its financial statements as follows:
1. Provide a vertical analysis of the product segment revenue. Round whole percents to one decimal place.
2. Are the revenues of Twenty-First Century Fox, Inc. diversified or concentrated within a product segment? Explain.

EX 5-27

Segment Revenue Horizontal and Vertical Analyses

OBJ. 5

The comparative segment revenues for Yum! Brands, a global quick-serve restaurant company, are as follows:
1. Provide a horizontal analysis of the segment revenues using the prior year as the base year. Round whole percents to one decimal place.
2. Provide a vertical analysis of the segment revenues for both years. Round whole percents to one decimal place.
3. What conclusions can be drawn from your analyses?

PR 5-1A

Revenue Journal; Accounts Receivable Subsidiary and General Ledgers

OBJ. 2, 3

Sage Learning Centers was established on July 20 to provide educational services. The services provided during the remainder of the month are as follows:

July	21.	Issued Invoice No. 1 to J. Dunlop for $115 on account.
	22.	Issued Invoice No. 2 to K. Tisdale for $350 on account.
	24.	Issued Invoice No. 3 to T. Quinn for $85 on account.
	25.	Provided educational services, $300, to K. Tisdale in exchange for educational supplies.
	27.	Issued Invoice No. 4 to F. Mintz for $225 on account.
	30.	Issued Invoice No. 5 to D. Chase for $170 on account.
	30.	Issued Invoice No. 6 to K. Tisdale for $120 on account.
	31.	Issued Invoice No. 7 to T. Quinn for $105 on account.

Instructions

Journalize the transactions for July, 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: D. Chase; J. Dunlop; F. Mintz; T. Quinn; K. Tisdale.

Answer

Check Figure: Revenue journal, total fees earned, $1,170
Post the revenue journal and the general journal to the following accounts in the general ledger, inserting the account balances only after the last postings:

12

Accounts Receivable

13

Supplies

41

Fees Earned
1. What is the sum of the balances of the customer accounts in the subsidiary ledger at July 31?
2. What is the balance of the accounts receivable controlling account at July 31?
Assume Sage Learning Centers began using a computerized accounting system to record the sales transactions on August 1. What are some of the benefits of the computerized system over the manual system?

PR 5-2A

Revenue and Cash Receipts Journals; Accounts Receivable Subsidiary and General Ledgers

OBJ. 2, 3

Transactions related to revenue and cash receipts completed by Crowne Business Services Co. during the period April 2–30 are as follows:

Apr.	2.	Issued Invoice No. 793 to Ohr Co., $4,680.
	5.	Received cash from Mendez Co. for the balance owed on its account.
	6.	Issued Invoice No. 794 to Pinecrest Co., $1,990.
	13.	Issued Invoice No. 795 to Shilo Co., $3,450.
		Post revenue and collections to the accounts receivable subsidiary ledger.
	15.	Received cash from Pinecrest Co. for the balance owed on April 1.
	16.	Issued Invoice No. 796 to Pinecrest Co., $5,500.
		Post revenue and collections to the accounts receivable subsidiary ledger.
	19.	Received cash from Ohr Co. for the balance due on invoice of April 2.
	20.	Received cash from Pinecrest Co. for balance due on invoice of April 6.
	22.	Issued Invoice No. 797 to Mendez Co., $7,470.
	25.	Received $3,200 note receivable in partial settlement of the balance due on the Shilo Co. account.
Apr.	30.	Received cash from fees earned, $12,890.
		Post revenue and collections to the accounts receivable subsidiary ledger.

Instructions

Insert the following balances in the general ledger as of April 1:

11 Cash

$11,350

12 Accounts Receivable

14,830

14 Notes Receivable

6,000

41 Fees Earned

—
Insert the following balances in the accounts receivable subsidiary ledger as of April 1:

Mendez Co.

$8,710

Ohr Co.

—

Pinecrest Co.

6,120

Shilo Co.

—
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.

Answer

Check Figure: Total cash receipts, $34,390
Using the two special journals and the two-column general journal (p. 1), journalize the transactions for April. 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.
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.
Determine that the sum of the customer balances agrees with the accounts receivable controlling account in the general ledger.
Why would an automated system omit postings to a controlling account as performed in Step 5 for Accounts Receivable?

PR 5-3A

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger

OBJ. 2, 4

Sterling Forest Landscaping designs and installs landscaping. The landscape designers and office staff use office supplies, while field supplies (rock, bark, etc.) are used in the actual landscaping. Purchases on account completed by Sterling Forest Landscaping during October are as follows:

Oct.	2.	Purchased office supplies on account from Meade Co., $400.
	5.	Purchased office equipment on account from Peach Computers Co., $3,980.
	9.	Purchased office supplies on account from Executive Office Supply Co., $320.
	13.	Purchased field supplies on account from Yamura Co., $1,420.
	14.	Purchased field supplies on account from Omni Co., $2,940.
	17.	Purchased field supplies on account from Yamura Co., $1,890.
	24.	Purchased field supplies on account from Omni Co., $3,880.
	29.	Purchased office supplies on account from Executive Office Supply Co., $310.
	31.	Purchased field supplies on account from Omni Co., $1,800.

Instructions

Insert the following balances in the general ledger as of October 1:

14 Field Supplies

$ 5,920

15 Office Supplies

750

18 Office Equipment

12,300

21 Accounts Payable

1,170
Insert the following balances in the accounts payable subsidiary ledger as of October 1:

Executive Office Supply Co.

$390

Meade Co.

780

Omni Co.

—

Peach Computers Co.

—

Yamura Co.

—
Journalize the transactions for October, 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.
Post the purchases journal to the accounts in the general ledger.
1. What is the sum of the creditor balances in the subsidiary ledger at October 31?
2. What is the balance of the accounts payable controlling account at October 31?
  
  Answer
  
  Check Figure: $18,110
What type of e-commerce application would be used to plan and coordinate transactions with suppliers?

PR 5-4A

Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Ledgers

OBJ. 2

AquaFresh Water Testing Service was established on April 16. AquaFresh uses field equipment and field supplies (chemicals and other supplies) to analyze water for unsafe contaminants in streams, lakes, and ponds. Transactions related to purchases and cash payments during the remainder of April are as follows:

Apr.	16.	Issued Check No. 1 in payment of rent for the remainder of April, $3,500.
	16.	Purchased field supplies on account from Hydro Supply Co., $5,340.
	16.	Purchased field equipment on account from Pure Equipment Co., $21,450.
	17.	Purchased office supplies on account from Best Office Supply Co., $510.
	19.	Issued Check No. 2 in payment of field supplies, $3,340, and office supplies, $400.
		Post the journals to the accounts payable subsidiary ledger.
	23.	Purchased office supplies on account from Best Office Supply Co., $660.
	23.	Issued Check No. 3 to purchase land, $140,000.
	24.	Issued Check No. 4 to Hydro Supply Co. in payment of April 16 invoice, $5,340.
	26.	Issued Check No. 5 to Pure Equipment Co. in payment of April 16 invoice, $21,450.
		Post the journals to the accounts payable subsidiary ledger.
	30.	Acquired land in exchange for field equipment having a cost of $12,000.
	30.	Purchased field supplies on account from Hydro Supply Co., $7,650.
	30.	Issued Check No. 6 to Best Office Supply Co. in payment of April 17 invoice, $510.
	30.	Purchased the following from Pure Equipment Co. on account: field supplies, $1,340, and field equipment, $4,700.
	30.	Issued Check No. 7 in payment of salaries, $29,400.
		Post the journals to the accounts payable subsidiary ledger.

Instructions

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

11 Cash

19 Land

14 Field Supplies

21 Accounts Payable

15 Office Supplies

61 Salary Expense

17 Field Equipment

71 Rent Expense

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

Best Office Supply Co.

Hydro Supply Co.

Pure Equipment Co.

Answer

Check Figure: Total cash payments, $203,940
Post the individual entries (Other Accounts columns of the purchases journal and the cash payments journal and both columns of the general journal) to the appropriate general ledger accounts.
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.)
Prepare a schedule of the accounts payable creditor balances.
Why might AquaFresh consider using a subsidiary ledger for the field equipment?

PR 5-5A

All Journals and General Ledger; Trial Balance

OBJ. 2

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

Dec.	1.	Issued Check No. 610 for December rent, $5,260.
	2.	Issued Invoice No. 940 to Clifford Co., $2,180.
	3.	Received check for $6,010 from Ryan Co. in payment of account.
	5.	Purchased a vehicle on account from Platinum Motors, $46,700.
	6.	Purchased office equipment on account from Austin Computer Co., $5,630.
	6.	Issued Invoice No. 941 to Ernesto Co., $4,850.
	9.	Issued Check No. 611 for fuel expense, $750.
	10.	Received check from Sing Co. in payment of $5,060 invoice.
	10.	Issued Check No. 612 for $410 to Office To Go Inc. in payment of invoice.
	10.	Issued Invoice No. 942 to Joy Co., $2,470.
	11.	Issued Check No. 613 for $3,870 to Essential Supply Co. in payment of account.
	11.	Issued Check No. 614 for $630 to Porter Co. in payment of account.
	12.	Received check from Clifford Co. in payment of $2,180 invoice of December 2.
	13.	Issued Check No. 615 to Platinum Motors in payment of $46,700 balance of December 5.
	16.	Issued Check No. 616 for $49,830 for cash purchase of a vehicle.
	16.	Cash fees earned for December 1–16, $25,420.
	17.	Issued Check No. 617 for miscellaneous administrative expense, $630.
	18.	Purchased maintenance supplies on account from Essential Supply Co., $2,190.
	19.	Purchased the following on account from McClain Co.: maintenance supplies, $1,880; office supplies, $470.
	20.	Issued Check No. 618 in payment of advertising expense, $2,230.
	20.	Used $4,010 maintenance supplies to repair delivery vehicles.
	23.	Purchased office supplies on account from Office To Go Inc., $500.
	24.	Issued Invoice No. 943 to Sing Co., $7,640.
	24.	Issued Check No. 619 to S. Holmes as a personal withdrawal, $3,760.
	25.	Issued Invoice No. 944 to Ernesto Co., $6,920.
	25.	Received check for $5,130 from Ryan Co. in payment of balance.
	26.	Issued Check No. 620 to Austin Computer Co. in payment of $5,630 invoice of December 6.
	30.	Issued Check No. 621 for monthly salaries as follows: driver salaries, $21,160; office salaries, $8,890.
	31.	Cash fees earned for December 17–31, $23,660.
	31.	Issued Check No. 622 in payment for office supplies, $430.

Instructions

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

11 Cash	$202,430	32 S. Holmes, Drawing	—
12 Accounts Receivable	16,200	41 Fees Earned	—
14 Maintenance Supplies	13,580	51 Driver Salaries Expense	—
15 Office Supplies	6,130	52 Maintenance Supplies Exp.	—
16 Office Equipment	35,680	53 Fuel Expense	—
17 Accum. Depr.—Office Equip.	8,640	61 Office Salaries Expense	—
18 Vehicles	120,070	62 Rent Expense	—
19 Accum. Depr.—Vehicles	18,400	63 Advertising Expense	—
21 Accounts Payable	4,910	64 Miscellaneous Administrative Expense	—
31 S. Holmes, Capital	362,140

Journalize the transactions for December, 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), single-column 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.

Answer

Check Figure: Total cash receipts, $67,460
Post the appropriate individual entries to the general ledger.
Total each of the columns of the special journals and post the appropriate totals to the general ledger; insert the account balances.
Prepare a trial balance.

PR 5-1B

Revenue Journal; Accounts Receivable Subsidiary and General Ledgers

OBJ. 2, 3

Guardian Security Services was established on January 15 to provide security services. The services provided during the remainder of the month are as follows:

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

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.

Answer

Check Figure: Revenue journal, total fees earned, $2,875
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
1. What is the sum of the balances of the customer accounts in the subsidiary ledger at January 31?
2. What is the balance of the accounts receivable controlling account at January 31?
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?

PR 5-2B

Revenue and Cash Receipts Journals; Accounts Receivable Subsidiary and General Ledgers

OBJ. 2, 3

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

June	2.	Issued Invoice No. 717 to Yee Co., $2,210.
	3.	Received cash from Auto-Flex Co. for the balance owed on its account.
	7.	Issued Invoice No. 718 to Cooper Development Co., $1,040.
	10.	Issued Invoice No. 719 to Ridge Communities, $4,390.
		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., $620.
		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., $1,330.
	30.	Received cash from fees earned, $6,980.
	30.	Received office equipment of $2,780 in partial settlement of balance due on the Ridge Communities account.
		Post revenue and collections to the accounts receivable subsidiary ledger.

Instructions

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

11 Cash

$28,340

12 Accounts Receivable

4,090

18 Office Equipment

53,620

41 Fees Earned

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

Auto-Flex Co.

$2,580

Cooper Development Co.

1,510

Ridge Communities

—

Yee Co.

—
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.

Answer

Check Figure: Total cash receipts, $14,320
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.
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.
Determine that the sum of the customer accounts agrees with the accounts receivable controlling account in the general ledger.
Why would an automated system omit postings to a control account as performed in Step 5 for Accounts Receivable?

PR 5-3B

Purchases, Accounts Payable Account, and Accounts Payable Subsidiary Ledger

OBJ. 2, 4

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 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

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
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.

—
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.
Post the purchases journal to the accounts in the general ledger.
1. What is the sum of the creditor balances in the subsidiary ledger at May 31?
  
  Answer
  
  Check Figure: $31,300
2. What is the balance of the accounts payable controlling account at May 31?
What type of e-commerce application would be used to plan and coordinate transactions with suppliers?

PR 5-4B

Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Ledgers

OBJ. 2

West Texas Exploration Co. was established on October 15 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.
Oct.	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.
	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

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.

Answer

Check Figure: Total cash payments, $327,920
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.
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.)
Sum the balances of the accounts payable creditor balances.
Why might West Texas consider using a subsidiary ledger for the field equipment?

PR 5-5B

All Journals and General Ledger; Trial Balance

OBJ. 2

The transactions completed by AM Express Company during March, 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.
	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

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.	—

Journalize the transactions for March, 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.

Answer

Check Figure: Total cash receipts, $96,050

Post the appropriate individual entries to the general ledger.
Total each of the columns of the special journals and post the appropriate totals to the general ledger; insert the account balances.
Prepare a trial balance.

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REVENUE JOURNAL
Date	Invoice No.	Account Debited	Post. Ref.	Accts. Rec. Dr. Fees Earned Cr.

PURCHASES JOURNAL
Date	Account Credited	Post. Ref.	Accts. Payable Cr.	Office Supplies Dr.	Other Accounts Dr.	Post. Ref.	Amount

CASH RECEIPTS JOURNAL						Page 12
Date	Account Credited	Post. Ref.	Fees Earned Cr.	Accts. Rec. Cr.	Cash Cr.	Other Accounts Dr.

Accounting homework help

Chapter Review

5-6fExercises

Identify Postings from Revenue Journal

Accounts Receivable Ledger

Identify Journals

Identify Journals

Identify Transactions in Accounts Receivable Subsidiary Ledger

Prepare Journal Entries in a Revenue Journal

Posting a Revenue Journal

Accounts Receivable Subsidiary Ledger

Revenue and Cash Receipts Journals

Revenue and Cash Receipts Journals

Identify Postings from Purchases Journal

Identify Postings from Cash Payments Journal

Identify Transactions in Accounts Payable Subsidiary Ledger

Prepare Journal Entries in a Purchases Journal

Posting a Purchases Journal

Accounts Payable Subsidiary Ledger

Purchases and Cash Payments Journals

Purchases and Cash Payments Journals

Error in Accounts Payable Subsidiary Ledger

Identify Postings from Special Journals

Cash Receipts Journal

Computerized Accounting Systems

Computerized Accounting Systems and E-Commerce

E-Commerce

Segment Revenue Horizontal Analysis

Segment Revenue Vertical Analysis

Segment Revenue Horizontal and Vertical Analyses

Chapter Review

5-6gProblems: Series A

Revenue Journal; Accounts Receivable Subsidiary and General Ledgers

Revenue and Cash Receipts Journals; Accounts Receivable Subsidiary and General Ledgers

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger

Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Ledgers

All Journals and General Ledger; Trial Balance

Chapter Review

5-6hProblems: Series B

Revenue Journal; Accounts Receivable Subsidiary and General Ledgers

Revenue and Cash Receipts Journals; Accounts Receivable Subsidiary and General Ledgers

Purchases, Accounts Payable Account, and Accounts Payable Subsidiary Ledger

Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Ledgers

All Journals and General Ledger; Trial Balance

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Non-plagiarized papers