Reference no: EM13903199
Grassley Company completes these transactions during November of the current year (terms for all its credit sales are 2/10, n/30).
Nov. 1 Purchased $ 5,058 of office equipment on credit from Brun Supply, invoice dated November 1, terms n/10 EOM.
2 Borrowed $ 88,500 cash from Wisconsin Bank by signing a long-term note payable.
4 Purchased $ 33,500 of merchandise from BLR Industries, invoice dated November 3, terms 2/10, n/30.
5 Purchased $1,040 of store supplies on credit from Grebe Company, invoice dated November 5, terms n/10 EOM.
8 Sold merchandise on credit to Cyd Rounder, Invoice No. 439, for $6,550 (cost is $3,910).
10 Sold merchandise on credit to Carlos Mantel, Invoice No. 440, for $13,500 (cost is $8,500).
11 Purchased $ 2,557 of merchandise from Lo Company, invoice dated November 10, terms 2/10, n/30.
12 Sent BLR Industries Check No. 633 in payment of its November 3 invoice less the discount.
15 Issued Check No. 634, payable to Payroll, in payment of sales salaries expense for the first half of the month, $ 6,585. Cashed the check and paid the employees.
15 Cash sales for the first half of the month are $ 18,170 (cost is $ 9,000). (Cash sales are recorded daily but are recorded only twice in this problem to reduce repetitive entries.)
15 Sold merchandise on credit to Tori Tripp, Invoice No. 441, for $5,250 (cost is $2,450).
16 Purchased $ 459 of office supplies on credit from Grebe Company, invoice dated November 16, terms n/10 EOM.
17 Received a $557 credit memorandum from Lo Company for the return of unsatisfactory merchandise purchased on November 11.
18 Received payment from Cyd Rounder for the November 8 sale less the discount.
19 Received payment from Carlos Mantel for the November 10 sale less the discount.
19 Issued Check No. 635 to Lo Company in payment of its invoice of November 10 less the return and the discount. 22 Sold merchandise on credit to Carlos Mantel, Invoice No. 442, for $ 3,695 (cost is $ 2,060).
24 Sold merchandise on credit to Tori Tripp, Invoice No. 443, for $4,280 (cost is $2,130).
25 Received payment from Tori Tripp for the sale of November 15 less the discount.
26 Received a $ 922 credit memorandum from Brun Supply for the return of office equipment purchased on November 1.
30 Issued Check No. 636, payable to Payroll, in payment of sales salaries expense for the last half of the month, $ 6,585. Cashed the check and paid the employees.
30 Cash sales for the last half of the month are $ 16,703 (cost is $ 10,200).
30 Verify that amounts impacting customer and creditor accounts were posted and that any amounts that should have been posted as individual amounts to the general ledger accounts were posted. Foot and crossfoot the journals and make the month- end postings.
Required:
1. Open the following general ledger accounts: Cash; Accounts Receivable; Inventory (November 1 beg. bal. is $ 40,000); Office Supplies; Store Supplies; Office Equipment; Accounts Payable; Long-Term Notes Payable; C. Grassley, Capital (Nov. 1 beg. bal. is $ 40,000); Sales; Sales Discounts; Cost of Goods Sold; and Sales Salaries Expense. Open the following accounts receivable subsidiary ledger accounts: Carlos Mantel, Tori Tripp, and Cyd Rounder. Open the following accounts payable subsidiary ledger accounts: Grebe Company, BLR Industries, Brun Supply, and Lo Company.
2. Enter these transactions in a sales journal like that in Exhibit 7.5, a purchases journal like that in Exhibit 7.9, a cash receipts journal like that in Exhibit 7.7, a cash disbursements journal like that in Exhibit 7.11, or a general journal. Number all journal pages as page 2.
3. Prepare a trial balance of the general ledger and prove the accuracy of the subsidiary ledgers by pre-paring schedules of both accounts receivable and accounts payable.