Accounting HW

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Allied American University

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PART I: SHORT RESPONSE

Directions: Please respond to each of the following questions. Write at least 3 to 5 sentences for each question.

1. What is the difference between a periodic and perpetual inventory system for merchandise inventory?

2. Assume the general ledger Accounts Receivable controlling account matches the balance of the schedule of accounts receivable. Is it possible that errors could have occurred anyway? Explain how this could have occurred or explain why it is impossible for this to have occurred.

3. What are the four most commonly used special journals, and what are they used for?

PART II: APPLICATION

Directions: Please answer each of the following questions. Show your work as necessary.

1. Benton Sports is a retail store selling goods for cash and on a charge account basis. A retail sales tax of 8 percent is applied to all sales. Selected transactions for the month of January are presented below.

Jan. 6	Sold goods on account to C. D. Brannon, invoice no. 1200, $1,260, plus sales tax.
8	Sold goods on account to Bingham School District, invoice no. 1218, $3,420. This sale is exempt from sales tax.
14	Issued credit memo no. 548 to Bingham School District for merchandise returned, $690.
17	Issued credit memo no. 549 to C. D. Brannon for merchandise returned, $510, plus sales tax.

Instructions:

Record the transactions in the sales (page 32) or general journal (page 10), as appropriate.

SALES JOURNAL	PAGE	32
Date	Inv. No.	Customer's Name	Post. Ref.	Accounts Receivable Debit	Sales Tax Payable Credit	Sales Credit
20--
Jan.	6	1200	C. D. Brannon
	8	1218	Bingham School
			District

GENERAL JOURNAL	PAGE	10
Date	Description	Post. Ref.	Debit	Credit
20--
Jan.	14	Sales Returns and Allowances
		Accounts Receivable, Bingham
		School District
		Issued credit memo no. 548.

	17	Sales Returns and Allowances
		Sales Tax Payable
		Accounts Receivable, C. D. Brannon
		Issued credit memo no. 549.

2. Black Corporation had the following transactions take place in February of this year:

Feb. 5	Bought merchandise on account from Red Corporation, invoice no. R2510, $623; terms net 30 days; dated February 3; FOB destination.
15	Bought merchandise on account from Yellow Corporation, invoice no. Y21510, $1,352; terms net 30 days, dated February 12; FOB shipping point, freight prepaid and added to the invoice, $88.25 (total $1,440.25).
25	Received credit memo no. 233 for merchandise returned to Red Corporation, $103.25.

Instructions:

1.	Record the transactions in the purchases (page 45) or general journal (page 12), as appropriate.
2.	Open the following accounts in the accounts payable ledger and record the February 1 beginning balances, if any, as given: Red Corporation, $300; Yellow, $665. For the accounts having balances write “Balance” in the item column and place a check mark in the Post. Ref. column.
3.	Post to the accounts payable ledger and prepare schedule of accounts payable.

1.)

PURCHASES JOURNAL	PAGE	45	>
Date	Supplier's Name	Invoice No.	Invoice Date	Terms	> > >
20--						>
Feb.	5	Red Corporation				>
	15	Yellow Corporation				>
	28	Totals				>

<	PURCHASES JOURNAL	PAGE	45
< < <	Date	Supplier's Name	Post. Ref.	Accounts Payable Credit	Freight In Debit	Purchases Debit
<	20--
<	Feb.	5	Red Corporation	
<		15	Yellow Corporation	
<		28	Totals

GENERAL JOURNAL	PAGE	12
Date	Description	Post. Ref.	Debit	Credit
20--
Feb.	25	Accounts Payable, Red Corporation
		Purchases Returns and Allowances
		Credit memo no. 233 for return
		of merchandise.

2.)

ACCOUNTS RECEIVABLE LEDGER
NAME	Red Corporation
ADDRESS	1234 Sun Drive
	Phoenix, Arizona 57208

Date	Item	Post. Ref.	Debit	Credit	Balance
20--
Feb.	1	Balance
	5
	25

ACCOUNTS RECEIVABLE LEDGER
NAME	Yellow Corporation
ADDRESS	5678 Banana Circle
	Phoenix, Arizona 57208

Date	Item	Post. Ref.	Debit	Credit	Balance
20--
Feb.	1	Balance
	15

3.)

Black Corporation Schedule of Accounts Payable February 28, 20--
Red Corporation
Yellow Corporation
Total Accounts Payable

3. Jane's Animal Haven uses the general journal to record its charge sales invoices instead of a sales journal. The sales tax rate is 4.5 percent on retail item(s).

Instructions:

1.	Record the June 1 balances, if any, in the general ledger as given: Accounts Receivable 113 controlling account, $1,326; Sales Tax Payable 214, Sales 411, $26,852, Sales Returns and Allowances 412. Write "Balance" in the Item column and place a check mark in the Post. Ref. column.
2.	Open the following accounts in the accounts receivable ledger and record the balances, if any, as of June 1: J. Green; G. Haas, $656; S. Soudah; L. Wold. For the account having a balance, write "Balance" in the Item column and place a check mark in the Post. Ref. column.
3.	Record the below transactions in the general journal (page 27) for the total amount of the charge sales invoices.
4.	Post the amounts from the general journal to the general ledger and accounts receivable ledger. Write the invoice number of each sales invoice in the Post. Ref. column to indicate that the amounts have been posted.
5.	Prepare a schedule of accounts receivable.

June 5	Sold $427 on account to J. Green, invoice no. 714 for boarding.
7	Sold $560, plus sales tax of $11.25, total $571.25 on account to L. Wold, invoice no. 715 for monthly pet sitting and food.
10	Accepted credit memo no. 124 from L. Wold for return of food worth $50 plus sales tax of $2.25, total $52.25.
18	Sold $943 on account to S. Soudah, invoice no. 716 for boarding.
21	Sold to J. Green on account, invoice no. 717, animal supplies for $210, plus sales tax of $9.45, total $219.45.

GENERAL JOURNAL	PAGE	10
Date	Description	Post. Ref.	Debit	Credit
20--
June	5	Accounts Receivable, J. Green
		Sales
		record invoice 714

	7	Accounts Receivable, L. Wold
		Sales
		Sales Tax Payable
		record invoice 715

	10	Sales Returns and Allowances
		Sales Tax Payable
		Accounts Receivable, L. Wold
		record credit memo 214

	18	Accounts Receivable, S. Soudah
		Sales
		record invoice 716

	21	Accounts Receivable, J. Green
		Sales
		Sales Tax Payable
		record invoice 717

GENERAL LEDGER
ACCOUNT	Accounts Receivable	ACCOUNT NO.	113

		Post.			Balance
Date	Item	Ref.	Debit	Credit	Debit	Credit
20--
June	1	Balance
	5
	7
	10
	18
	21

GENERAL LEDGER
ACCOUNT	Sales Tax Payable	ACCOUNT NO.	214

		Post.			Balance
Date	Item	Ref.	Debit	Credit	Debit	Credit
20--
June	7
	10
	21

ACCOUNT	Sales	ACCOUNT NO.	411

		Post.			Balance
Date	Item	Ref.	Debit	Credit	Debit	Credit
20--
June	1	Balance
	5
	7
	18
	21

ACCOUNT	Sales Returns and Allowances	ACCOUNT NO.	412

		Post.			Balance
Date	Item	Ref.	Debit	Credit	Debit	Credit
20--
June	10

ACCOUNTS RECEIVABLE LEDGER
NAME	J. Green
ADDRESS	238 Second Street
	Nashville, TN 37201

Date	Item	Post. Ref.	Debit	Credit	Balance
20--
June	5
	21

NAME	G. Haas
ADDRESS	2300 Mockingbird Lane
	Hendersonville, TN 37075

Date	Item	Post. Ref.	Debit	Credit	Balance
20--
June	1	Balance

NAME	S. Soudah
ADDRESS	143 Greenland Drive
	Nashville, TN 37205

Date	Item	Post. Ref.	Debit	Credit	Balance
20--
June	18

NAME	L. Wold
ADDRESS	140 Osbourne Street
	Murfreesboro, TN 37129

Date	Item	Post. Ref.	Debit	Credit	Balance
20--
June	7
	10

Jane's Animal Haven Schedule of Accounts Receivable June 30, 20--
J. Green
G. Haas
S. Soudah
L. Wold
Total Accounts Receivable

4. The following transactions relate to Hatfield Company, a furniture wholesaler, during August of this year. Terms of sale are 2/10, n/30. The company is located in Dallas, Texas.

Aug. 3	Sold merchandise on account to Rangel Company, invoice no. 200, $752.25. The cost of merchandise was $488.75.
8	Bought merchandise on account from Carpenter Company, invoice no. 82, $510; terms 2/10, n/30; dated August 3; FOB Denver, freight prepaid and added to the invoice, $58 (total $568).
10	Received credit memo no. 12 for merchandise returned to Carpenter Company for $75.91.
16	Sold merchandise on account to Knapp Company, invoice no. 201, $1,183.75. The cost of merchandise was $762.10.
22	Issued credit memo no. 80 to Knapp Company for merchandise return of $249.38. The cost of merchandise was $160.55.
28	Bought merchandise on account from Wheeler Company, invoice no. 856, $1,798.26; terms n/30; dated August 25; FOB Orlando, freight prepaid and added to the invoice, $125 (total $1,923.26).

Instructions:

Record the transactions in the general journal (page 1) using the perpetual inventory system.

GENERAL JOURNAL	PAGE	1
Date	Description	Post. Ref.	Debit	Credit
20--
Aug.	3	Accounts Receivable, Rangel Company
		Sales
		Sold merchandise to Rangel
		Company, invoice no. 200.

	3	Cost of Goods Sold
		Merchandise Inventory
		Cost of merchandise sold to
		Rangel Company.

	8	Merchandise Inventory
		Accounts Payable, Carpenter
		Company
		Purchased merchandise from
		Carpenter Company, invoice no.
		82, invoice dated 8/3, terms
		2/10, n/30.

	10	Accounts Payable, Carpenter
		Company
		Merchandise Inventory
		Credit memo no. 12 for return of
		merchandise.

	16	Accounts Receivable, Knapp Company
		Sales
		Sold merchandise to Knapp
		Company, invoice no. 201.

	16	Cost of Goods Sold
		Merchandise Inventory
		Cost of merchandise sold to
		Knapp Company, invoice no. 201.

	22	Sales Returns and Allowances
		Accounts Receivable, Knapp
		Company
		Issued credit memo no. 80.

	22	Merchandise Inventory
		Cost of Goods Sold
		Cost of merchandise returned,
		credit memo no. 80.

	28	Merchandise Inventory
		Accounts Payable, Wheeler
		Company
		Purchased merchandise from
		Wheeler Company, invoice no.
		856, invoice dated 8/25, terms
		n/30.