11-M.2 Mastery Problem (Review of Chapters 9, 10, and 11). Journalizing and posting Journals and selected accounts payable, accounts receivable, and general ledger accounts for inn Solutions are given in the Working Papers. Instructions: 1. Journalize the following transactions during December of the current year. Use page 12 of a general journal, page 12 of a sales journal, page 12 of a purchases journal, page 12 of a cash receipts journal, and page of a cash payments journal. The company offers sales terms of 2/10, n/30. The sales tax rate is 6%. Post the following transactions when journalized: (a) transactions impacting the accounts receivable or accounts payable subsidiary ledgers, (b) transactions recorded in the general journal and (c) cash payments entered in a general amount column of the cash payments journal. Source documents are abbreviated as follows: check, C; memorandum, M; purchase invoice, P; receipt, R; sales invoice, S; terminal summary, TS; debit memorandum, DM; credit memorandum, CM.
Transactions:
- Dec. 1. Sold merchandise on account to Larry Simpson, $4,780.00, plus sales tax. S395.
- Paid cash to Perkins Properties for rent, $800.00, C518.
- The board of directors declared a dividend of $0.20 per share; capital stock issued is 20,000 shares. M68.
- Received cash on account from Coastal County Schools, $814.80, less 2% sales discount. R289.
- Paid cash to Ulman Paper for office supplies, $169.00. C519.
- Paid cash on account to Jing Corporation for $2,618.00, less 2% discount. C520.
- Purchased merchandise on account from Wilson Metals, $9,000.00, less a 60% trade discount. P315.
- Bought office supplies on account from Barger Office Supply, $148.00. M69.
Chapter 11 Accounting for Transactions Using a General Journal 11-M.2 MASTERY PRO 1., 2. SALES JOURNAL 2. Sales Journal Proof Debit Totals Credit Totals Column Title Accounts Receivable Debit .. Sales Credit ……. Sales Tax Payable Credit … Totals. 1., 3. PURCHASES JOURNAL ACCOUNT CREDITED 298. Working Papers 2014. All Rights Reserved. May not be scanned, copied or duplicated, or posted to publicly.
11-M.2 MASTERY PROBLEM (continued) ACCOUNTS RECEIVABLE LEDGER Class ARTAM LaDonna Atkins Balance Coastal County Schools Balance TOWER Joseph Greggs Dec. 1 Balance CUSTOMER Kelsey Pittman DEBIT Dec. 1 Balance CUSTOMER Larry Simpson.
Chapter 11 Accounting for Transactions Using a General Journal 301. ACCOUNTS PAYABLE LEDGER VENDOR No. 210 VENDOR Barger Office Supply CREDIT Dec. 1 Balance VENDOR NO. 22 VENDOR Francis Industries Dec. 1 Balance VENDOR NO. 230 VENDOR Jing Corporation Dec. 1 Balance VENDOR NO. 240 VENDOR Quitman Manufacturing CREDIT Dec. 1 Balance VENDOR Wilson Metals VENDOR NO. 250 CREDIT.
Working Papers. GENERAL LEDGER ACCOUNT Cash ACCOUNT NO. 1110 Dec. 1 Balance Petty Cash ACCOUNT NO. 1120 DATE Dec. 1 Balance ACCOUNT Accounts Receivable Dec. 1 Balance ACCOUNT NO. 1145 ACCOUNT Supplies Office CREDIT BALANCE CREDIT DEBIT DATE Dec. 1 Balance ACCOUNT NO. 2110 ACCOUNT Accounts Payable CREDIT DEBIT CREDIT DATE Dec. 1 Balance.
Chapter 11 Accounting for Transactions Using a General Journal. Cash Proof Cash on hand at the beginning of the month ….. Plus total cash received during the month…. Equals total….. …… ……… … Less total cash paid during the month………….. Equals cash balance on hand at the end of the month Checkbook balance on the next unused check stub…
The correct answer and explanation is:
To complete this mastery problem, let’s go step by step:
Journalizing the Transactions for December 1st
Sales Journal (Page 12)
- Dec. 1: Sold merchandise on account to Larry Simpson, $4,780.00 plus 6% sales tax
- Accounts Receivable (Larry Simpson) Debit: $5,066.80
- Sales Credit: $4,780.00
- Sales Tax Payable Credit: $286.80
- Source Document: S395
Cash Payments Journal (Page 12)
- Dec. 1: Paid cash to Perkins Properties for rent, $800.00
- Rent Expense Debit: $800.00
- Cash Credit: $800.00
- Source Document: C518
- Dec. 1: Paid cash to Ulman Paper for office supplies, $169.00
- Supplies (Office) Debit: $169.00
- Cash Credit: $169.00
- Source Document: C519
- Dec. 1: Paid cash on account to Jing Corporation, $2,618.00 less 2% discount
- Accounts Payable (Jing Corporation) Debit: $2,618.00
- Cash Credit: $2,565.64
- Purchase Discounts Credit: $52.36
- Source Document: C520
Cash Receipts Journal (Page 12)
- Dec. 1: Received cash on account from Coastal County Schools, $814.80 less 2% discount
- Cash Debit: $798.50
- Sales Discounts Debit: $16.30
- Accounts Receivable (Coastal County Schools) Credit: $814.80
- Source Document: R289
General Journal (Page 12)
- Dec. 1: The board of directors declared a dividend of $0.20 per share on 20,000 shares
- Dividends Debit: $4,000.00
- Dividends Payable Credit: $4,000.00
- Source Document: M68
- Dec. 1: Purchased merchandise on account from Wilson Metals, $9,000.00 less 60% trade discount
- Merchandise Inventory Debit: $3,600.00
- Accounts Payable (Wilson Metals) Credit: $3,600.00
- Source Document: P315
- Dec. 1: Bought office supplies on account from Barger Office Supply, $148.00
- Supplies (Office) Debit: $148.00
- Accounts Payable (Barger Office Supply) Credit: $148.00
- Source Document: M69
Posting to Ledgers
- Accounts Receivable Subsidiary Ledger:
- Larry Simpson’s balance increases by $5,066.80
- Coastal County Schools’ balance decreases by $814.80
- Accounts Payable Subsidiary Ledger:
- Jing Corporation’s balance decreases by $2,618.00
- Wilson Metals’ balance increases by $3,600.00
- Barger Office Supply’s balance increases by $148.00
- General Ledger Entries:
- Cash Account updates:
- Increases from Coastal County Schools ($798.50)
- Decreases from rent, supplies, and payments ($800.00 + $169.00 + $2,565.64)
- Cash Account updates:
Explanation (300 Words)
In this problem, we journalized and posted a variety of transactions for Inn Solutions, covering sales, purchases, and cash transactions. Each transaction was recorded using the appropriate journal: sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal.
The sales journal recorded the sale to Larry Simpson, including sales tax. The cash payments journal tracked rent, office supplies, and a payment on account with a discount. The cash receipts journal recorded a payment received from Coastal County Schools with a discount. The general journal included a dividend declaration and office supply purchases.
After journalizing, we posted these transactions to the subsidiary ledgers (for accounts payable and accounts receivable) and the general ledger. Accounts receivable and payable balances were updated to reflect the transactions. The cash account was adjusted to show the incoming and outgoing funds.
This process ensures accurate financial tracking, allowing the company to monitor its cash flow, debts, and income. The use of trade discounts and payment discounts impacts the final values recorded. Recording dividends ensures that shareholders are accounted for in the financial reports.
Finally, the cash proof ensures that total cash received minus total cash paid equals the ending balance, confirming accuracy. Proper journalizing and posting prevent errors and facilitate financial decision-making.