Chapter 8 Accounting Information Systems
Questions
1. As a purchasing agent, Greg Timko will make daily use of the purchases journal and the inventory and accounts payable subledgers. He might discuss with personnel from other areas of the store the other journals and subledgers as his area impacts them or vice versa: sales journal, cash disbursements journal, and cash receipts journal along with the accounts receivable subledger.
2. Four types of transactions recorded in separate special journals are: (a) sales on credit, (b) purchases on credit, (c) cash receipts, and (d) cash disbursements.
3. Daily recording and posting of credit sales and cash receipts from customers provides up-to-date information used in decisions about granting credit to customers. Also, up-to-date account balances are needed if customers inquire about the amount of their balances.
4. Both kinds of credits should not be placed in the same column because the sum of the credits to the customer accounts must be posted to the Accounts Receivable controlling account. Placing these credits in a separate column makes it possible to post the column total to the controlling account.
5. The double posting does not cause the trial balance to be out of balance because only one credit is posted to the General Ledger.
6. The initial and page number of the journal from which the amount was posted is entered in the Posting Reference column of the ledger account.
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QUICK STUDY
Quick Study 8-11. P2. AR3. AR4. AP
Quick Study 8-2Input (I)
orOutput
(O)1. I2. I3. O4. O5. I6. O7. O8. I
Quick Study 8-3
a. Sales Journalb. Purchases Journalc. Cash Disbursements Journald. Cash Disbursements Journale. Purchases Journalf. Cash Receipts Journalg. Cash Receipts Journal
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.637 Fundamental Accounting Principles, Twelfth Canadian Edition
Quick Study 8-4Nov.12 Automobiles ...................... 15,000
Capital, Jesse Cooke ...... 15,000The owner contributed an automobile to the business.
19 Sales Returns and Allowances 150Accounts Receivable—R. Wyder
150Customer returned merchandise.
19 Merchandise Inventory....... 95Cost of goods sold......... 95
Merchandise returned to inventory.
28 Accounts Payable—The Ringdol Company 170Merchandise Inventory . . 170
Returned defective merchandise.
Quick Study 8-5Debit (DR),Credit (CR), or No Effect (NE)
1. DR2. NE3. NE4. CR5. NE6. CR7. NE
Quick Study 8-6Debit (DR),Credit (CR), or No Effect (NE)
1. CR2. NE3. CR
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4. NE5. DR6. DR7. NE
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Quick Study 8-7
Sales Journal Page 1
DateAccount Debited
Invoice Numbe
r PRAccounts
Receivable Dr. Sales Cr.
Cost of Goods Sold Dr.
Merchandise Inventory Cr.
2011Mar.
3T. Edson 1103 3,000 2,040
10 Willis Company
1104 10,800 7,34425 Ellton
Kingston1105 7,400 5,032
Quick Study 8-8
Cash Receipts Journal Page 1
DateAccount Credited PR
Explanation
Cash Dr.
Sales Discount Dr.
Accounts
Receivable Cr.
Sales
Cr.Other Accounts Cr.
Cost of Goods
Sold Dr.Merchand
ise Inventory
Cr.2011
Mar. 18
T. Edson Invoice #1103
2,940
60 3,00030 Willis
CompanyInvoice #1104
10,800
10,80031 ABC Cash sale 6,20 6,2 4,216
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Quick Study 8-9Purchases Journal Page 1
Date Account CreditedDate of Invoice Terms PR
Accounts
Payable Cr.
Merchandise Inventory Dr.
Office Supplies
Dr.
Other Account
s Dr.2011Mar. 2 Tex Company Mar 2 3/10,
n204,800 4,800
12 Littleton 12
2/15, n30
14,000 14,000
13 Worsley 13
2/15, n45
9,400 9,400
Quick Study 8-10Cash Disbursements Journal Page 1
Date
Ch.
No. Payee
Account Debited
PR
Cash Cr.
Merchandise
Inventory Cr.
Other Accounts
Dr.Accounts Payable
Dr.2011Mar.
14101
Tex Company
Tex Company
4,800 4,80027 10
2Littleton Littleton 13,720 280 14,000
31 103
Thorn Real Estate
Rent Expense
6,500 6,500
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EXERCISES
Exercise 8-1 (15 minutes)Sales Journal Page 1
DateAccount Debited
Invoice Number PR
Accounts Receivable Dr.
Sales Cr.
Cost of Goods Sold Dr.
Merchandise Inventory Cr.
2011Feb. 7 J. Eason 5704 1,150 700
12 P. Lathan 5705 320 17025 S. Summers 5706 550 300
*Exercise 8-2 (15 minutes)
SALES JOURNAL Page 2Invoic
eA/R Dr.
Date Account Debited Number
PR Sales Cr.
2011Feb.
7 J. Eason 5704 1,150
12 P. Lathan 5705 32025 S. Summers 5706 550
Exercise 8-3 (20 minutes)Cash Receipts Journal Page 1
Date Account Credited
PR Explanation Cash Dr.
Sales Discount Dr.
Accounts
Receivable Cr.
Sales Cr.
Other Accounts Cr.
Cost of Goods
Sold Dr.Merchandi
se
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Inventory Cr.
2011Sept.9 Notes
payableNote to bank 5,50
05,500
13 Dale Trent, capital
Owner investment
7,000
7,000
18 Sales Cash sale 460 460 28027 J. Namal Invoice,
Sept. 71,76
436 1,800
*Exercise 8-4 (20 minutes)CASH RECEIPTS JOURNAL Page 2
Sales Accts. OtherAccount Cash Disc. Rec. Sales Accts.
Date Credited Explanation PR Debit Debit Credit Credit Credit2011
Sept.
9 Notes payable
Note to bank
5,500 5,500
13
Dale Trent, capital
Owner investment
7,000 7,000
18
Sales Cash sale 460 460
27
J. Namal Invoice, Sept. 7
1,764 36 1,800
Exercise 8-5 (20 minutes)Purchases Journal Page 1
Date Account Credited
Date of
Invoice Terms PR
Accounts
Payable Cr.
Merchandise
Inventory Dr.
Office Supplies
Dr.
Other Account
s Dr.2011
July 1 Angler, Inc. Jul
1 n/30 8,100 8,100
14 Store Supplies/ Steck Company
Jul
14
2/10, n/30
240 240
17 Marten Company Jul
17
n/30 2,600 2,600
Exercise 8-6 (20 minutes)PURCHASES JOURNAL
Page 2Account Office Other
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sDate
ofPayable Purchas
esSuppli
esAccoun
tsDate Account Credited Invoi
ceTerms PR Credit Debit Debit Debit
2011July 1 Angler, Inc. July
1n/30 8,100 8,100
14 Store Supplies/Steck Company
July 14
2/10,n/30
240 240
17 Marten Company July 17
n/30 2,600 2,600
Exercise 8-7 (20 minutes)Cash Disbursements Journal Page 1
DateCh. No. Payee
Account Debited PR
Cash Cr.
Merchandise
Inventory Cr.
Other Accounts
Dr.
Accounts Payable
Dr.2011
Mar. 9
210 Narlin Corp. Store Supplies
900 900
17 211 City Bank Notes Payable
3,000 3,000
29 212 LeBaron LeBaron 6,860 140 7,00031 213 E. Brandon Salaries
Expense3,400 3,400
31 214 Pace, Inc. Pace, Inc. 5,500 5,500
*Exercise 8-8 (20 minutes)CASH DISBURSEMENTS JOURNAL Page 2
Purchase
Other Accts.
Ch.
Cash Discount
Accts. Payable
Date No.
Payee Account Debited PR Credit Credit Debit Debit
2011Mar.
9 210
Narlin Corp. Store Supplies 900 900
17
211
City Bank Notes Payable 3,000 3,000
29
212
LeBaron LeBaron 6,860 140 7,000
31
213
E. Brandon Salaries Expense 3,400 3,400
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Exercise 8-9 (30 minutes)Part 1 – Wilson Purchasing
Purchases Journal Page 1
Date Account Credited
Date of
Invoice Terms PR
Accounts
Payable Cr.
Merchandise
Inventory Dr.
Office Supplies
Dr.
Other Account
s Dr.2011
May 11
Hostel Sales May
11
3/10, n/90
30,000 30,000
Cash Disbursements Journal Page 1
DateCh. No. Payee
Account Debited PR
Cash Cr.
Merchandise
Inventory Cr.
Other Accounts
Dr.
Accounts Payable
Dr.2011
May 11
84 Express Shipping
Merchandise Inv.
335 335
20 85 Hostel Sales Hostel Sales 27,9361 864 28,800
General Journal Page: 1Date Account Titles and Explanations P
RDebi
tCred
it2011Ma
y12
Accounts Payable – Hostel Sales 1,200
Merchandise Inventory.......... 1,200
To record return of merchandise.
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Exercise 8-9 (concluded)Part 2 – Hostel Sales
Sales Journal Page 1
DateAccount Debited
Invoice Number PR
Accounts Receivable Dr.
Sales Cr.
Cost of Goods Sold Dr.
Merchandise Inventory Cr.
2011May 11
Wilson Purchasing
1601 30,000 20,000
Cash Receipts Journal Page 1
DateAccount Credited
PR Explanation
Cash Dr.
Sales Discount Dr.
Accounts
Receivable Cr.
Sales Cr.
Other Accounts Cr.
Cost of Goods
Sold Dr.Merchandi
se Inventory
Cr.2011
May 21
Wilson Purchasing
Wilson Purchasing
27,9361
864 28,800
General Journal Page: 1Date Account Titles and Explanations P
RDebi
tCred
it2011Ma
y12
Sales Returns and Allowances.... 1,200
Accounts Receivable – Wilson Purchasing...............................
1,200
To record sales return.Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.651 Fundamental Accounting Principles, Twelfth Canadian Edition
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12
Merchandise Inventory.............. 800
Cost of Goods Sold............... 800To record cost of merchandise returned to inventory.
Calculations:1. 30,000 – 1,200 = 28,800; 28,800 x 3% = 864; 28,800 – 864 = 27,936.
*Exercise 8-10 (30 minutes)Part 1 – Wilson Purchasing
PURCHASES JOURNAL Page 2
Accounts
Office Other
Date Payable Purchases
Supplies
Accounts
Date Account Credited Invoi Terms PR Credit Debit Debit Debit
2011M 11 Hostel Sales May 3/10,n
/90
30,000 30,000
CASH DISBURSEMENTS JOURNAL Page 2Purcha
se
Other Accts.
Ch Cash Discount
Accts. Payable
Date No Payee Account Debited PR Credit Credit Debit Debit
2011Ma 1 84 Express
Shipping
Transportation-In 335 335
2 85 Hostel Sales A/P – Hostel Sales 27,936
864 28,800
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General Journal Page: 1Date Account Titles and Explanations P Debi
tCred
it
2011Ma 1 Accounts Payable – Hostel Sales 1,20
0 Purchase Returns and
Allowances ........................1,20
0To record return of merchandise
purchased.
*Exercise 8-10 (concluded)Part 2 – Hostel Sales
SALES JOURNAL Page 2Invoic
eA/R Dr.
Date Account Debited Number
PR Sales Cr.
2011May
11 Wilson Purchasing 1601 30,000
CASH RECEIPTS JOURNAL Page 2Sales Accts. Other
Account Cash Disc. Rec. Sales Accts.Date Credited Explanation PR Debit Debit Credit Credit Credit2011
May
21
Wilson Purchasing
Sale of May 11
27,936
864 28,800
General Journal Page: 1Date Account Titles and Explanations P
RDebi
tCred
it2011Ma
y12
Sales Returns and Allowances.... 1,200
Accounts Receivable – Wilson Purchasing...............................
1,200
To record sales return.
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Exercise 8-11 (10 minutes)The June 5 purchase would have been recorded in the Purchases Journal and the June 14 payment would have been recorded in the Cash Disbursements Journal. The error in journalizing the June 14 transaction should be discovered in the process of crossfooting the Cash Disbursements Journal at the end of the month.
Exercise 8-12 (10 minutes)
a. When the schedule of accounts payable is prepared.b. When crossfooting the Purchases Journal.c. When the trial balance is prepared.d. When the schedule of accounts payable is prepared.e. When the schedule of accounts payable is prepared.
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Exercise 8-13 (30 minutes)Part 1
ACCOUNTS RECEIVABLE SUBLEDGERSanders Farrell Don Holland Brad Smithers
May 171,700
May 20 500 May 103,880
25 680
May 65,760
Bal. 1,200 Bal. 4,560
Part 2GENERAL LEDGER
Accounts Receivable SalesSales Returns
and AllowancesMay 31
12,020May 20500 May 31
12,020May 20
500Bal. 11,520
Part 3VALUE-MART GOODS
Schedule of Accounts ReceivableMay 31, 2011
Sanders Farrell.................... $ 1,200Dan Holland........................ 4,560Brad Smithers..................... 5,760Total accounts receivable..... $11,520
Accounts Receivable Controlling Account
Total debit.......................... $12,020Credit for return.................. (500)Balance as of May 31, 2011. . $11,520
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*Exercise 8-14 (35 minutes)GENERAL LEDGER
Cash Accounts Payable Sales Discounts38,878 23,044 1,500
18,30023,200 472
Accounts Receivable
Notes Payable Purchases
26,200 60023,600
9,000 23,200
Prepaid Insurance SalesPurchase Returns
and Allowance1,700 26,200
5,7501,500
Store EquipmentSales Returns
and AllowancesPurchase Discounts
3,500 1,000 600 456
ACCOUNTS RECEIVABLE SUBLEDGERJack Hertz Trudy Stone Dave Waylon7,400 600
6,80016,800 16,800 2,000
ACCOUNTS PAYABLE SUBLEDGERGrass Corp. McGrew Company Sulter, Inc.1,5009,300
10,800 3,400 9,000 9,000
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*Exercise 8-15 (30 minutes)Part 1
ACCOUNTS RECEIVABLE SUBLEDGERAdrian Carr Lisa Mack
Jan. 8
7,076 Jan. 14
23,780
Jay Newton Kathy OliviasJan.
229
4,1768,468
Jan. 10
20
15,544
12,992
Part 2Jan.31 Accounts Receivable................. 72,036
Sales.................................. 62,100 GST Payable........................ 3,726 PST Payable........................ 6,210
Part 3GENERAL LEDGER
Accounts Receivable SalesJan.
3172,03
662,10
0Jan. 3
1
Part 4SKILLERN COMPANY
Schedule of Accounts ReceivableJanuary 31, 2011
Adrian Carr .................... $ 7,076Lisa Mack ....................... 23,780Jay Newton .................... 12,644Kathy Olivas .................. 28,536Total accounts receivable $72,036
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*Exercise 8-16 (20 minutes)Sales Journal Page X
Date Account DebitedInvoice
No. PR A/R Dr
PST Payable
CR
GST Payable
CR Sales Cr
COGS DR Merchandi
se Inventory
CR2011Aug.5 Jay Smith 50 50,160 3,520 2,640 44,000 21,000
11 Dee Oliver 51 38,760 2,720 2,040 34,000 16,200
Cash Receipts Journal Page X
DateAccount Credited
Explanation PR
Other Accounts CR
A/R CR
PST Payable CR
GST Payable CR
Sales CR
Cash DR
Sales
Disc Dr
COGS/DR Merchandi
se Inventory/
CR2011Aug.
20Jay Smith Inv. 50 50,1
6050,160
21 Dee Oliver Inv. 51 38,760
38,420 340*
Purchases Journal Page X
Date Account Credited Terms PR A/P CR
Merchandise
Inventory DR
Other Accounts
DR
GST Rec’ble
DR2011Aug.1 Arden Sheet
Metal2/10, n/30
10,600 10,000 600
7 JayCee Equipment n/30
6,360 6,000 360
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Cash Disbursements Journal Page X
Date Ch # Account Debited PR
Other Accounts
DR
GST Rec’ble
DR A/P DR
Merchandise
Inventory CR Cash CR
2011Aug.
1028 A/P – Arden Sheet
Metal10,600 200 10,400
*Discount on sales amount only
*Exercise 8-17 (20 minutes)SALES JOURNAL Page X
Accts. PST GSTInvoice Rec. Payable Payable Sales
Date
Account Debited Number PR Debit Credit Credit Credit
2011
Aug.
5 Jay Smith 50 50,160 3,520 2,640 44,000
11 Dee Oliver 51 38,760 2,720 2,040 34,000
CASH RECEIPTS JOURNAL Page XOther Accts. PST GST SalesAccts. Rec. Payable Payable Sales Cash Discoun
tDate Account
CreditedExplanatio
nPR Credit Credit Credit Credit Credit Debit Debit
2011Aug.
20A/R – Jay Smith
Inv. 50 50,160 50,160
21 A/R – Dee Oliver
Inv. 51 38,760 38,420 340
PURCHASES JOURNAL Page X
Accts. Other GSTDate
ofPayable Purchase
sAccounts Rec’ble
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011
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Aug. 1 Arden Sheet Metal Aug. 1
2/10,n/30
10,600 10,000 600
7 JayCee Equipment Aug. 7
n/30 6,360 6,000 360
CASH DISBURSEMENTS JOURNAL Page XOther GST Accts. Pur.
Ch.
Accts. Rec’ble
Payable
Disc. Cash
Date No.
Payee Account Debited PR Debit Debit Debit Credit Credit
2011Aug.1
028 A/P – Arden Arden Sheet
Metal10,600 200 10,400
PROBLEMSProblem 8-1A (20 minutes)
Date Transaction
Special
Journal
Subledger
Mar. 1
Sold merchandise on credit. S AR/MI
2 Defective merchandise sold on March 1 was returned by the customer. It was scrapped.
G AR
3 Purchased office equipment on credit. P AP
5 Received payment regarding the March 1 sale.
CR AR
10 Received a credit memorandum from the supplier regarding defective equipment purchased on March 3.
G AP
14 Sold merchandise for cash. CR MI
16 Purchased merchandise inventory on credit; terms 1/5, n/30.
P AP/MI
17 Paid the balance owing regarding the March 3 transaction.
CD AP
18 Purchased merchandise inventory for cash.
CD MI
21 Paid for the merchandise purchased on March 16.
CD AP/MI
22 Sold old equipment for cash. CR NE
30 Paid salaries for the month of March. CD NE
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30 Accrued utilities for the month of March.
G A/P
30 Closed the credit balance in the income summary to capital.
G NE
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Problem 8-2A (40 minutes)Sales Journal Page
1
Date Account DebitedInvoice
No. PRA/R Dr. Sales Cr.
COGS Dr.Merchandise Inventory Cr.
2011Apr. 2 Tim Bennett 306 35,000 22,750
5 Brian Kennedy 311 42,000 27,30016 Wynne Walsh 312 14,000 9,10024 Brian Kennedy 313 18,000 11,700
Cash Receipts Journal Page: 1
DateAccount Credited PR
Explanation
Cash Dr.
Sales Disc Dr.
A/R Cr.
Sales Cr.
Other Account
s Cr.
COGS/Dr.
Merchandise
Inventory/ Cr.
2011Apr. 3 Sales (cash
sales)Inv. 307-
31015,00
015,000 9,750
12 A/R – Tim Bennett
Inv. 306 34,300
700 35,000
20 A/R – Brian Kennedy
Inv. 311 42,000
42,000
27 A/R – Wynne Walsh
Inv. 312 11,000
11,000
Purchases Journal Page 1
DateAccount Credited
Date of Invoice Terms PR
A/P Cr.
Merchandise
Inventory Dr.
Office Supplies
Dr.
Other Accounts
Dr.
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2011Apr. 4 Wallace
BrothersApr. 4 1/10,
n/3048,00
048,000
11 McKinley & Sons Apr. 11 n/30 56,000
56,000
23 Zardon Co. — Equip.
Apr. 23 1/15, n/30
3,800 3,800
Problem 8-2A (concluded)Cash Disbursements
JournalPage 1
DateCh # Account Debited PR Cash Cr.
Merchandise
Inventory Cr.
Other Accounts
Dr. A/P Dr.2011Apr. 9 620 Office Supplies 230 230
13 621 Wallace Brothers 43,3621 438 43,80026 622 McKinley & Sons 56,000 56,00030 623 Salaries 36,000 36,000
Calculation:1. 48,000 – 4,200 = 43,800 Dr to A/P; 43,800 x 1% = 438; 43,800 – 438 = 43,362 Cr to Cash
General Journal Page: 1 Date Account Titles and Explanations P
RDebi
tCred
it2011
Apr.
6 Accounts Payable – Wallace Brothers...................................
4,200
Merchandise Inventory.......... 4,200
To record return of defective merchandise.
19
Sales Returns and Allowances.... 3,000
Accounts Receivable – Wynne Walsh.......................................
3,000
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Problem 8-3A (40 minutes)Note: Since posting to the General Ledger was not a requirement in this problem, posting references are shown for values posted to the subledgers only.
Part 3 Sales Journal Page 3
Date Account DebitedInvoice
No. PRA/R Dr. Sales Cr.
Cost of Goods Sold Dr.
Merchandise Inventory Cr.
2011Apr. 3 Linda Hobart 760 3,000 1,800
5 Paul Abrams 761 8,000 4,50011 Kelly Schaefer 762 9,500 5,00013 Linda Hobart 763 4,100 2,400
Cash Receipts Journal Page: 3
DateAccount Credited PR
Explanation
Cash Dr.
Sales Disc Dr. A/R Cr.
Sales Cr.
Other Accounts Cr.
COGS Dr.
Merchandise
Inventory Cr.
2011Apr.
13Linda Hobart
Sale of Apr. 3
2,940 60 3,000
14 Paul Abrams
Sale of Apr. 5
7,840 160 8,000
16 Sales Cash sales 50,840 50,840 28,000
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Problem 8-3A (continued) PURCHASES JOURNAL Page 3
Accts. Merchandise
Office Other
Date of
Payable
Inventory
Supplies
Accts.
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011 Apr.
2 Baskin Company Apr 2
2/10,n/60
13,300 13,300
3 Eau Claire Inc. Apr 2
n/10 EOM
1,380 1,380
9 Store Equip./Frank’s Supply
Apr 9
n/10 EOM
11,125 11,125
CASH DISBURSEMENTS JOURNAL Page 3Merchan
diseOther Accts.
Ch.
Cash Inventory
Accts. Payable
Date No.
Payee Account Debited PR Credit Credit Debit Debit
2011Apr.
4 587
The Record Advertising Expense
999 999
12
588
Baskin Company
Baskin Company 13,034 266 13,300
16
589
Payroll Sales Salaries Expense
9,750 9,750
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elfth Canadian Edition
GENERAL JOURNAL Page 3Date Account Titles and Explanations PR Debit
Credit2011Apr. 6 Accounts Payable—Eau Claire Inc. 85
Office Supplies....................... 85Returned office supplies.
Problem 8-3A (concluded) Parts 1, 3ACCOUNTS RECEIVABLE SUBLEDGER
Paul AbramsDate Explanation PR Debit Credit Balan
ce2011
Apr.
5 S3 8,000 8,000
14
CR3 8,000 0
Linda HobartDate Explanation PR Debit Credit Balan
ce2011
Apr.
3 S3 3,000 3,000
13
CR3 3,000 0
13
S3 4,100 4,100
Kelly SchaeferDate Explanation PR Debit Credit Balan
ce2011
Apr.
11
S3 9,500 9,500
Parts 2, 3ACCOUNTS PAYABLE SUBLEDGER
Frank’s SupplyDate Explanation PR Debit Credit Balanc
e2011
Apr.
9 P3 11,125 11,125
Baskin CompanyDate Explanation PR Debit Credit Balanc
e2011
Apr 2 P3 13,300 13,300
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. 12
CD3
13,300 0
Sprocket CompanyDate Explanation PR Debit Credit Balanc
e2011
Eau Claire Inc.Date Explanation PR Debit Credit Balanc
e2011
Apr.
3 P3 1,380 1,380
6 G3 85 1,295
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Problem 8-4A (70 minutes)Parts 2, 3, 4
Sales Journal Page 3
Date Account DebitedInvoice
No. PRA/R Dr. Sales Cr.
Cost of Goods Sold Dr.
Merchandise Inventory Cr.
2011Apr. 3 Linda Hobart 760 3,000 1,800
5 Paul Abrams 761 8,000 4,50011 Kelly Schaefer 762 9,500 5,00013 Linda Hobart 763 4,100 2,40027 Paul Abrams 764 3,070 1,60027 Kelly Schaefer 765 5,700 3,000 30 Totals 33,370 18,300
(106/413)
(502/119)
Cash Receipts Journal Page: 3
DateAccount Credited PR
Explanation
Cash Dr.
Sales Disc Dr. A/R Cr.
Sales Cr.
Other Accounts Cr.
COGS Dr.
Merchandise
Inventory Cr.
2011Apr.
13Linda Hobart
Sale of Apr. 3
2,940 60 3,000
14 Paul Abrams
Sale of Apr. 5
7,840 160 8,000
16 Sales Cash sales 50,840 50,840 28,00018 L.T. Notes
Payable251
Note to bank
50,000 50,000
20 Kelly Schaefer Sale of 9,310 190 9,500
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Apr. 1123 Linda Hobart Sale of
Apr. 134,018 82 4,100
30 Sales Cash sales 70,97 5
70,9 75
37,000
30 Totals 195,923
492 24,600 121,815
50,000 65,000
(101) (415) (106) (413) (X) (502/119)
Problem 8-4A (continued) PURCHASES JOURNAL Page 3
Accts. Merchandise
Office Other
Date of
Payable
Inventory
Supplies
Accts.
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011 Apr.
2 Baskin Company Apr 2
2/10,n/60
13,300 13,300
3 Eau Claire Inc. Apr 2
n/10 EOM
1,380 1,380
9 Store Equip./Frank’s Supply
Apr 9
n/10 EOM
165/
11,125 11,125
17
Sprocket Company Apr 16
2/10,n/30
12,750 12,750
20
Store Supplies/Frank’s Supply
Apr 19
n/10 EOM
125/
730 730
25
Baskin Company Apr 24
2/10,n/60
10,375 10,375
30
Totals 49,660 36,425 1,380 11,855
(201)
(119)
(124)
(X)
CASH DISBURSEMENTS JOURNAL Page 3Merchan
diseOther Accts.
Ch.
Cash Inventory
Accts. Payable
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Date No.
Payee Account Debited PR Credit Credit Debit Debit
2011Apr.
4 587
The Record Advertising Expense
655
999 999
12
588
Baskin Company
Baskin Company 13,034 266 13,300
16
589
Payroll Sales Salaries Expense
621
9,750 9,750
26
590
Sprocket Company
Sprocket Company
12,1031
247 12,350*
30
591
Payroll Sales Salaries Expense
621
9,750 9,750
30
Totals 45,636 513 20,499 25,650
(101)
(119) (X) (201)
Calculation:1. $12,750 – $400 credit memorandum = $12,350; $12,350 x 2% = $247; $12,350 - $247 = $12,103
Problem 8-4A (continued)
GENERAL JOURNAL Page 3Date Account Titles and Explanations PR Debit
Credit2011Apr. 6 Accounts Payable—Eau Claire Inc. 201/ 85
Office Supplies....................... 124 85Returned office supplies.
23 Accounts Payable—Sprocket Company 201/400
Merchandise Inventory........... 119 400Returned merchandise.
Parts 1, 2, 3, 4GENERAL LEDGER
Cash Acct. No. 101Date Explanation PR Debit Credit Balanc
e2011
Mar.
31
Balance Forward 167,000
Apr.
30
CR3 195,923
362,923
30
CD3
45,636 317,287
Accounts Receivable Acct. No. 106Date Explanation PR Debit Credit Balanc
e2011
Apr.
30
S3 33,370
33,370
30
CR3 24,600 8,770
Merchandise Inventory Acct. No. 119Date Explanation PR Debit Credit Balanc
e2011
Mar.
31
Balance Forward 95,000
Apr 2 G3 400 94,600
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. 330
S3 18,300 76,300
30
CR3 65,000 11,300
30
P3 36,425
47,725
30
CD3
513 47,212
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit
Balance
2011Apr. 3 P3 1,380 1,380
6 G3 85 1,295
Problem 8-4A (continued)Store Supplies Acct. No.
125Date Explanation PR Debit Credi
tBalance
2011Apr. 2
0P3 730 730
Store Equipment Acct. No. 165
Date Explanation PR Debit Credit
Balance
2011Apr. 9 P3 11,12
511,125
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit
Balance
2011Apr. 6 G3 85 (85)
23
G3 400 (485)
30
P3 49,660
49,175
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30
CD3
25,650
23,525
Long-Term Notes Payable Acct. No. 251Date Explanation PR Debit Credit Balanc
e2011
Mar.
31
Balance Forward 167,000
Apr.
18
CR3 50,000 217,000
Jeff Newton, Capital Acct. No. 301Date Explanation PR Debit Credit Balanc
e2011
Mar.
31
Balance forward 95,000
Sales Acct. No. 413Date Explanation PR Debit Credit Balanc
e2011
Apr.
30
S3 33,370 33,370
30
CR3 121,815
155,185
Sales Discounts Acct. No. 415Date Explanation PR Debit Credit Balanc
e2011
Apr.
30
CR3 492 492
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Problem 8-4A (continued) Cost of Goods Sold Acct. No. 502
Date Explanation PR Debit Credit Balance
2011Apr.
30
S3 18,300
18,300
30
CR3 65,000
83,300
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit
Balance
2011Apr. 1
6CD3
9,750 9,750
30
CD3
9,750 19,500
Advertising Expense Acct. No. 655
Date Explanation PR Debit Credit
Balance
2011Apr. 4 CD
3999 999
ACCOUNTS RECEIVABLE SUBLEDGERPaul Abrams
Date Explanation PR Debit Credit Balance
2011Apr.
5 S3 8,000 8,000
14
CR3 8,000 0
27
S3 3,070 3,070
Linda HobartDate Explanation PR Debit Credit Balan
ce
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2011Apr.
3 S3 3,000 3,000
13
CR3 3,000 0
13
S3 4,100 4,100
23
CR3 4,100 0
Kelly SchaeferDate Explanation PR Debit Credit Balan
ce2011
Apr.
11
S3 9,500 9,500
20
CR3 9,500 0
27
S3 5,700 5,700
Problem 8-4A (continued)ACCOUNTS PAYABLE SUBLEDGER
Frank’s SupplyDate Explanation PR Debit Credit Balanc
e2011
Apr.
9 P3 11,125 11,125
20
P3 730 11,855
Baskin CompanyDate Explanation PR Debit Credit Balanc
e2011
Apr.
2 P3 13,300 13,300
12
CD3
13,300 0
25
P3 10,375 10,375
Sprocket Company
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Date Explanation PR Debit Credit Balance
2011Apr.
17
P3 12,750 12,750
23
G3 400 12,350
26
CD3
12,350 0
Eau Claire Inc.Date Explanation PR Debit Credit Balanc
e2011
Apr.
3 P3 1,380 1,380
G3 85 1,295
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 684
Problem 8-4A (continued) Part 5NEWTON COMPANY
Schedule of Accounts ReceivableApril 30, 2011
Paul Abrams ................. $3,070Kelly Schaefer................ 5,700Total accounts receivable $8,770
NEWTON COMPANYSchedule of Accounts Payable
April 30, 2011Frank’s Supply .................................$11,855Baskin Company ............................... 10,375Eau Claire Inc. .................................. 1,295Total accounts payable .....................$23,525
NEWTON COMPANYTrial BalanceApril 30, 2011
Account Debit CreditCash ............................................$317,287Accounts receivable...................... 8,770Merchandise inventory.................. 47,212Office supplies ............................. 1,295Store supplies ............................. 730Store equipment .......................... 11,125Accounts payable ......................... $ 23,525Long-term notes payable ............. 217,000Jeff Newton, capital...................... 95,000Sales............................................ 155,185Sales discounts............................ 492Cost of goods sold........................ 83,300Sales salaries expense ................. 19,500Advertising expense .................... 999 Totals ..........................................$490,710......................................$490,710
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.685 Fundamental Accounting Principles, Twelfth Canadian Edition
Problem 8-4A (concluded)Analysis component:To find the error(s),
first re-add the account balances on the schedule of accounts receivable to confirm that the addition was correct.
trace the balances listed on the schedule of accounts receivable back to the subsidiary accounts to confirm that they were listed correctly on the schedule.
recalculate the balance of each subsidiary account to confirm that the additions and subtractions were correct.
trace the postings from each subsidiary account and from the controlling account back to the appropriate journals.
Since the sales and cash receipts journals were footed and crossfooted before posting, the previous steps should disclose the error.
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 686
Problem 8-5A (120 minutes)Parts 1, 2, 3
SALES JOURNAL Page 3
Date Account DebitedInvoic
e Numb
er
PRA/R. Dr.Sales
Cr.
Cost of Goods Sold Dr. Merchandise
Inventory Cr.
2011Oct.
6 Marge Craig 913 3,300 1,600
12 Vickie Foresman 914 3,650 1,90015 Amy Ihrig 915 3,100 1,70016 Vickie Foresman 916 7,700 3,90024 Bill Grigsby 917 1,200 700 31 Totals 18,950 9,800
(106/413)
(502/119)
CASH RECEIPTS JOURNAL Page 3
Date
AccountCredited Explanatio
n
PR
Cash Debit
SalesDiscount
Debit
Acct. Rec. Credit
Sales Credit
Other
Accts. Credit
Cost of Goods Sold Dr.
Merchandise Inventory Cr.
2011Oct. 2
Bill Grigsby Invoice Nov 23
4,116 84 4,200
15 Sales Cash sales 38,830 38,830
21,400
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15 Marge Craig
Invoice Dec 6
2,401 49 2,450*
22 Vickie Foresman
Invoice Dec 12
3,577 73 3,650
25 Amy Ihrig Invoice Dec 15
2,548 52 2,600**
29 Office Supplies
Sold supplies
124
50 50
31 Sales Cash sales 29,600
29,600
16,300
31 Totals 81,122 258 12,900
68,430
50 37,700
(101)
(415)
(106) (413)
(X) (502/119)
* $3,300 – $850 return = $2,450** $3,100 – $500 allowance = $2,600
Problem 8-5A (continued)
PURCHASES JOURNAL Page 2
Date Account CreditedDate
of Invoi
ce Terms PR
Accounts
Payable
Credit
Merchandise
Inventory Debit
Office Suppli
es Debit
Other Accts. Debit
2011Oct.
2 Shore Company Oct 2
2/10, n/60
3,200 3,200
5 Brown Supply Co. Oct 3
n/10 EOM
1,300 1,300
15
Shore Company Oct 15
2/10, n/60
3,990 3,990
15
Sunshine Company Oct 15
2/10, n/60
2,650 2,650
17
Brown Supply Co. Oct 16
n/10 EOM
615 615
21
Store Equip./Brown Supply Co.
Oct 21
n/10 EOM
165/
6,700 6,700
26
Sunshine Company Oct 25
2/10, n/60
8,100 8,100
31
Totals 26,555 19,240 615 6,700
(201)
(119)
(12
4)
(X)
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Problem 8-5A (continued)
CASH DISBURSEMENTS JOURNAL Page 4
Date
Ch. No.
Payee Account Debited
PRCash Credi
t
Merchandise
Inventory.
Credit
Other Accts. Debit
Accts.
Payable
Debit.2011
Oct.
2 619
Omni Realty Co.
Rent Expense 640
2,250
2,250
6 620
Fireside Company
Fireside Company
3,724
76 3,800
12
621
Shore Company
Shore Company 3,136
64 3,200
15
622
Jamie Green Sales Salaries Expense
621
2,020
2,020
23
623
Sunshine Company
Sunshine Company
2,597
53 2,650
24
624
Shore Company
Shore Company 2,891
59 2,950*
30
625
Ken Shaw Ken Shaw, Withdrawals
302
2,500
2,500
31
626
Jamie Green Sales Salaries Expense
621
2,020
2,020
31
627
Countrywide Elec.
Utilities Expense 690
71 0
710
31
Totals 21,848
252 9,500 12,600
(101)
(119) (X)
(201)
* $3,990 – $1,040 return = $2,950
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Problem 8-5A (continued)GENERAL JOURNAL Page
2Date
Account Titles and Explanations PR Debit
Credit
2011Oct.
4 Accounts Payable—Fireside Company...................................
201/
460
Merchandise Inventory.......... 119 460 Returned merchandise to supplier.
9 Sales Returns and Allowances..... 414 850 Accounts Receivable—Marge Craig.........................................
106/
850
Merchandise Inventory............... 119 430 Cost of Goods Sold................ 502 430 Customer Marge Craig returned merchandise that was returned to merchandise inventory.
17
Accounts Payable—Shore Company...................................
201/
1,040
Merchandise Inventory.......... 119 1,040 Returned merchandise.
18
Accounts Payable—Brown Supply Co. ...........................................
201/
40
Office Supplies..................... 124 40 Returned office supplies.
20
Sales Returns and Allowances..... 414 500
Accounts Receivable—Amy Ihrig.........................................
106/
500
Customer Amy Ihrig returned defective merchandise.
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.691 Fundamental Accounting Principles, Twelfth Canadian Edition
Problem 8-5A (continued)ACCOUNTS RECEIVABLE SUBLEDGER
Marge CraigDate Explanation PR Debit Credit Balanc
e2011
Oct.
6 S3 3,300 3,300
9 G2 850 2,45015 CR
32,450 0
Vickie ForesmanDate Explanation PR Debit Credit Balanc
e2011Oct.
12
S3 3,650 3,650
16
S3 7,700 11,350
22
CR3
3,650 7,700
Bill GrigsbyDate Explanation PR Debit Credit Balanc
e2011Sept
23
S2 4,200 4,200
Oct.
2 CR3
4,200 0
24
S3 1,200 1,200
Amy IhrigDate Explanation PR Debit Credit Balanc
e2011Oct.
15
S3 3,100 3,100
20
G2 500 2,600
25
CR3
2,600 0
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 692
Part 2ACCOUNTS PAYABLE SUBLEDGER
Fireside CompanyDate Explanation PR Debit Credit Balan
ce2011Sept
28
P1 4,260 4,260
Oct.
4 G2 460 3,800
6 CD4
3, 800 0
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Problem 8-5A (continued) Part 2Brown Supply Company
Date Explanation PR Debit Credit Balance
2011Oct.
5 P2 1,300 1,300
17 P2 615 1,91518 G2 40 1,87521 P2 6,700 8,575
Sunshine CompanyDate Explanation PR Debit Credit Bala
nce2011
Oct.
15
P2 2,650 2,650
23
CD4
2,650 0
26
P2 8,100 8,100
Shore CompanyDate Explanation PR Debit Credit Bala
nce2011
Oct.
2 P2 3,200 3,200
12
CD4
3,200 0
15
P2 3,990 3,990
17
G2 1,040 2,950
24
CD4
2,950 0
Parts 2, 3GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
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2011Sept
30
Balance 5,361
Oct.
31
CR3
81,122 86,483
31
CD4
21,848 64,635
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011Sept
30
Balance 4,200
Oct.
9 G2 850 3,350
20
G2 500 2,850
31
S3 18,950 21,800
31
CR3
12,900 8,900
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Problem 8-5A (continued) Parts 2, 3Merchandise Inventory Acct. No.
119Date Explanation PR Debit Credit Bala
nce2011
Sept
30 Balance 66,970
Oct.
4 G2 460 66,510
9 G2 430 66,940
17 G2 1,040 65,900
31 S3 9,800 56,100
31 P2 19,240 75,340
31 CR3
37,700 37,640
31 CD4
252 37,388
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
2011Sept
30 Balance 607
Oct.
18 G2 40 567
29 CR3
50 517
31 P2 615 1,132
Store Supplies Acct. No. 125
Date Explanation PR Debit Credit Balance
2011Oct.
30 Balance 346
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Store Equipment Acct. No. 165
Date Explanation PR Debit Credit Balance
2011Sept
30 Balance 42,129
Oct.
21 P2 6,700 48,829
Accumulated Amortization, Store Equipment
Acct. No. 166
Date Explanation PR Debit Credit Balance
2011Oct.
30 Balance 9,153
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Problem 8-5A (continued) Parts 2, 3Accounts Payable Acct. No.
201Date Explanation PR Debit Credit Bala
nce2011
Sept
30 Balance 4,260
Oct.
4 G2 460 3,800
17 G2 1,040 2,76018 G2 40 2,72031 P2 26,555 29,27
531 CD
412,600 16,67
5
Ken Shaw, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
2011Oct.
30 Balance 106,200
Ken Shaw, Withdrawals Acct. No. 302
Date Explanation PR Debit Credit Balance
2011Oct.
30 CD4
2,500 2,500
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
2011Oct.
31 S3 18,950 18,950
31 CR3
68,430 87,380
Sales Returns and Allowances Acct. No. 414
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Date Explanation PR Debit Credit Balance
2011Oct.
9 G2 850 850
20 G2 500 1,350
Sales Discounts Acct. No. 415
Date Explanation PR Debit Credit Balance
2011Oct.
31 CR3
258 258
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Problem 8-5A (continued) Parts 2, 3Cost of Goods Sold Acct. No.
502Date Explanation PR Debit Credit Bala
nce2011
Oct. 9 G2 430 (430) 31 S3 9,800 9,370 31 CR3 37,700 47,07
0
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit Balance
2011Oct.
15 CD4
2,020 2,020
31 CD4
2,020 4,040
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance
2011Oct.
2 CD4
2,250 2,250
Utilities Expense Acct. No. 690
Date Explanation PR Debit Credit Balance
2011Oct.
31 CD4
710 710
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Problem 8-5A (concluded) Part 4
SASKAN ENTERPRISESTrial Balance
October 31, 2011
Account Debit CreditCash................................................. $
64,635
Accounts receivable........................... 8,900Merchandise inventory....................... 37,38
8Office supplies................................... 1,132Store supplies................................... 346Store equipment................................ 48,82
9Accumulated amortization, store equipment...................................... $
9,153Accounts payable.............................. 16,67
5Ken Shaw, capital.............................. 106,2
00Ken Shaw, withdrawals...................... 2,500Sales................................................ 87,38
0Sales returns and allowances............. 1,350Sales discounts................................. 258Cost of goods sold............................. 47,07
0Sales salaries expense....................... 4,040Rent expense.................................... 2,250Utilities expense................................
710
Totals............................................... $219,
408 $219,
408
SASKAN ENTERPRISESSchedule of Accounts Receivable
October 31, 2011
Vickie Foresman.................... $7,700
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.701 Fundamental Accounting Principles, Twelfth Canadian Edition
Bill Grigsby........................... 1,200 Total accounts receivable...... $8,900
SASKAN ENTERPRISESSchedule of Accounts Payable
October 31, 2011
Brown Supply Company......... $ 8,575
Sunshine Company................ 8,10 0
Total accounts payable.......... $16,675
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 702
Problem 8-6A (30 minutes)
Sales Journal Page 1
Date Account Debited
Invoice No.
PR
A/R Dr.Sales
Cr.PR
COGS Dr.Merchandise Inventory Cr.
2011Jan. 7 G. Little 103 500 160
19 B. Moore 104 375 13024 C. Woudstra 105 375 13529 D. Isla 106 800 302
Purchases Journal Page 1
DateAccount Credited
Date of
Invoice
Terms
PR
A/P Cr.
PR
Merchandise
Inventory
Dr.
Office Supplie
s Dr.
Other Account
s Dr.2011Jan. 3 Curtis & Sons Jan.
3 n/30 450 450
20 Norton Industries
Jan. 20
n/30 330 330
NOTE: An additional PR column has been added to facilitate the referencing of inventory entries into the inventory subledger.
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Problem 8-6A (concluded)Inventory Subledger Record — FIFO perpetual
Da te
PR Purchases Sales (at cost) Inventory Balance
Units
Unit Cost
Total
CostUnits
Unit Cost
Total Cost
Units
Unit Cost
Total
Cost
Jan. 1
Beginning inventory
25 @$8.00
= $200
25 @ $ 8.00
= $ 200
25 @ $ 8.00
= $ 200
3 P1 50 @$9.00
= $450
50 @ 9.00 = 450
7 S1 20 @ $ 8.00
= $ 160 5 @ $ 8.00
= $ 40
50 @ 9.00 = 450
19 S1 5 @ $ 8.00
= $ 40
10 @ 9.00 = 90 40 @ $ 9.00
= $ 360
40 @ $ 9.00
= $ 360
20 P1 30 @$11.00
= $330
30 @ 11.00
= 330
24 S1 15 @ $ 9.00
= $ 135 25 @ $ 9.00
= $ 225
30 @ 11.0 = 33
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0 029 S1 25 @ $
9.00= $ 225
7 @ 11.00
= 77 23 @ $11.00
= $ 253
Total
105 $980
82 $727 23 $253
Cost of goods available for sale =
Cost of goods sold +
Ending inventory
Note: An additional PR column has been added to the Inventory Subledger Record to facilitate referencing of inventory entries.
*Problem 8-7A (40 minutes)
Note: Since posting to the General Ledger was not a requirement in this problem, posting references are shown for values posted to the subledgers only.
SALES JOURNAL Page 3Invoic
eA/R Dr.
Date Account Debited Number
PR Sales Cr.
2011Apr.
3 Linda Hobart 760 3,000
5 Paul Abrams 761 8,00011 Kelly Schaefer 762 9,50013 Linda Hobart 763 4,100
CASH RECEIPTS JOURNAL Page 3Sales Accts. Other
Account Cash Disc. Rec. Sales Accts.Date Credited Explanation PR Debit Debit Credit Credit Credit2011
Apr.
13
Linda Hobart
Sale of Apr. 3 2,940 60 3,000
14
Paul Abrams
Sale of Apr. 5 7,840 160 8,000
16
Sales Cash sales 50,840
50,840
PURCHASES JOURNAL Page 3
Accounts
Office Other
Date Payable Purchas Suppli Accoun
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elfth Canadian Edition
of es es tsDate Account Credited Invoi
ceTerms PR Credit Debit Debit Debit
2011Apr.
2 Baskin Company Apr. 2
2/10,n/60
13,300 13,300
3 Eau Claire Inc. Apr. 2
n/10 EOM
1,380 1,380
9 Store Equip./Frank’s Supply
Apr. 9
n/10 EOM
11,125 11,125
*Problem 8-7A (continued)CASH DISBURSEMENTS JOURNAL Page 3
Purchase
Other Accts.
Ch. Cash Discount
Accts. Payable
Date No. Payee Account Debited PR Credit Credit Debit Debit2011
Apr.
4 587 The Record Advertising Expense
999 999
12
588 Baskin Company
Baskin Company 13,034
266 13,300
16
589 Payroll Sales Salaries Expense
9,750 9,750
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anual for Chapter 8681
*Problem 8-7A (continued)
GENERAL JOURNAL Page 3Date Account Titles and Explanations PR Debit Credit2011Apr. 6 Accounts Payable – Eau Claire Inc. 85
Office Supplies.................... 85 Returned office supplies.
ACCOUNTS RECEIVABLE SUBLEDGERPaul Abrams
Date Explanation PR Debit Credit Balance
2011Apr.
5 S3 8,000 8,000
14
CR3 8,000 0
Linda HobartDate Explanation PR Debit Credit Balan
ce2011
Apr.
3 S3 3,000 3,000
13
CR3 3,000 0
13
S3 4,100 4,100
Kelly SchaeferDate Explanation PR Debit Credit Balan
ce2011
Apr.
11
S3 9,500 9,500
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.709 Fundamental Accounting Principles, Twelfth Canadian Edition
*Problem 8-7A (concluded) Parts 2, 3ACCOUNTS PAYABLE SUBLEDGER
Frank’s SupplyDate Explanation PR Debit Credit Balanc
e2011
Apr.
9 P3 11,125 11,125
Baskin CompanyDate Explanation PR Debit Credit Balanc
e2011
Apr.
2 P3 13,300 13,300
12
CD3
13,300 0
Sprocket CompanyDate Explanation PR Debit Credit Balanc
e2011
Eau Claire Inc.Date Explanation PR Debit Credit Balanc
e2011
Apr.
3 P3 1,380 1,380
6 G3 85 1,295
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 710
*Problem 8-8A (70 minutes)
SALES JOURNAL Page 3Invoic
eA/R Dr.
Date Account Debited Number
PR Sales Cr.
2011Apr.
3 Linda Hobart 760 3,000
5 Paul Abrams 761 8,00011 Kelly Schaefer 762 9,50013 Linda Hobart 763 4,10027 Paul Abrams 764 3,07027 Kelly Schaefer 765 5,70
030 Totals 33,37
0(106/413)
CASH RECEIPTS JOURNAL Page 3Sales Accts. Other
Account Cash Disc. Rec. Sales Accts.Date Credited Explanation PR Debit Debit Credit Credit Credit2011
Apr.
13
Linda Hobart Sale of Apr. 3 2,940 60 3,000
14
Paul Abrams Sale of Apr. 5 7,840 160 8,000
16
Sales Cash sales 50,840
50,840
18
L.T. Notes Payable
Note to bank 251
50,000
50,000
2 Kelly Sale of Apr. 9,310 190 9,500
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ited. All rights reserved.684
Fundamental Accounting Principles, Tw
elfth Canadian Edition
0 Schaefer 1123
Linda Hobart Sale of Apr. 13
4,018 82 4,100
30
Sales Cash sales 70,9 75
70,9 75
30
Totals 195,923
492 24,600
121,815
50,000
(101) (415) (106) (413) (X)
*Problem 8-8A (continued)
PURCHASES JOURNAL Page 3
Accounts
Office Other
Date of
Payable Purchases
Supplies
Accounts
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011Apr.
2 Baskin Company Apr. 2
2/10,n/60
13,300 13,300
3 Eau Claire Inc. Apr. 2
n/10 EOM
1,380 1,380
9 Store Equip./Frank’s Supply
Apr. 9
n/10 EOM
165/
11,125 11,125
17 Sprocket Company Apr. 16
2/10,n30
12,750 12,750
20 Store Supplies/Frank’s Supply
Apr. 19
n/10 EOM
125/
730 730
25 Baskin Company Apr. 24
2/10,n/60
10,375 10,375
30 Totals 49,660 36,425 1,380
11,855
(201) (505) (124) (X)
CASH DISBURSEMENTS JOURNAL Page 3Purcha
seOther Accts.
Ch. Cash Discount
Accts. Payable
Date No. Payee Account Debited PR Credit Credit Debit Debit2011
Apr 4 587 The Record Advertising 655 999 999
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-Hill Ryerson Lim
ited. All rights reserved.Solutions M
anual for Chapter 8685
. Expense12
588 Baskin Company
Baskin Company 13,034
266 13,300
16
589 Payroll Sales Salaries Expense
621 9,750 9,750
26
590 Sprocket Company
Sprocket Company
12,103
247 12,350*
30
591 Payroll Sales Salaries Expense
621 9,75 0
9,75 0
30
Totals 45,636
513 20,499
25,650
(101) (506) (X) (201)*$12,750 - $400 credit memorandum = $12,350.
*Problem 8-8A (continued)
GENERAL JOURNAL Page 3Date Account Titles and Explanations PR Debit
Credit2011Apr. 6 Accounts Payable—Eau Claire Inc. 201/ 85
Office Supplies....................... 124 85Returned office supplies.
23 Accounts Payable—Sprocket Company 201/400
Purchase Returns and Allowances 507400
Returned merchandise.
Parts 1, 2, 3, 4GENERAL LEDGER
Cash Acct. No. 101Date Explanation PR Debit Credit Balanc
e2011
Mar.
31
Balance Forward 167,000
Apr.
30
CR3 195,923
362,923
30
CD3
45,636 317,287
Accounts Receivable Acct. No. 106Date Explanation PR Debit Credit Balanc
e2011
Apr.
30
S3 33,370
33,370
30
CR3 24,600 8,770
Merchandise Inventory Acct. No. 119Date Explanation PR Debit Credit Balanc
e2011
Mar.
31
Balance Forward 95,000
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Office Supplies Acct. No. 124
Date Explanation PR Debit Credit
Balance
2011Apr. 3 P3 1,380 1,380
6 G3 85 1,295
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 716
*Problem 8-8A (continued)Store Supplies Acct. No.
125Date Explanation PR Debit Credi
tBalance
2011Apr. 2
0P3 730 730
Store Equipment Acct. No. 165
Date Explanation PR Debit Credit
Balance
2011Apr. 9 P3 11,12
511,125
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit
Balance
2011Apr. 6 G3 85 (85)
23
G3 400 (485)
30
P3 49,660
49,175
30
CD3
25,650
23,525
Long-Term Notes Payable Acct. No. 251Date Explanation PR Debit Credit Balanc
e2011
Mar.
31
Balance Forward 167,000
Apr.
18
CR3 50,000 217,000
Jeff Newton, Capital Acct. No. 301Date Explanation PR Debit Credit Balanc
e2011
Mar.
31
Balance forward 95,000
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.717 Fundamental Accounting Principles, Twelfth Canadian Edition
Sales Acct. No. 413Date Explanation PR Debit Credit Balanc
e2011
Apr.
30
S3 33,370 33,370
30
CR3 121,815
155,185
Sales Discounts Acct. No. 415Date Explanation PR Debit Credit Balanc
e2011
Apr.
30
CR3 492 492
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 718
*Problem 8-8A (continued)Purchases Acct. No. 505
Date Explanation PR Debit Credit Balance
2011Apr.
30
P3 36,425
36,425
Purchase Discounts Acct. No. 506Date Explanation PR Debit Credit Balanc
e2011
Apr.
30
CD3
513 513
Purchase Returns and Allowances Acct. No. 507Date Explanation PR Debit Credit Balanc
e2011
Apr.
30
G3 400 400
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit
Balance
2011Apr. 1
6CD3
9,750 9,750
30
CD3
9,750 19,500
Advertising Expense Acct. No. 655
Date Explanation PR Debit Credit
Balance
2011Apr. 4 CD
3999 999
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.719 Fundamental Accounting Principles, Twelfth Canadian Edition
*Problem 8-8A (continued)ACCOUNTS RECEIVABLE SUBLEDGER
Paul AbramsDate Explanation PR Debit Credit Balan
ce2011
Apr.
5 S3 8,000 8,000
14
CR3 8,000 0
27
S3 3,070 3,070
Linda HobartDate Explanation PR Debit Credit Balan
ce2011
Apr.
3 S3 3,000 3,000
13
CR3 3,000 0
13
S3 4,100 4,100
23
CR3 4,100 0
Kelly SchaeferDate Explanation PR Debit Credit Balan
ce2011
Apr.
11
S3 9,500 9,500
20
CR3 9,500 0
27
S3 5,700 5,700
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 720
*Problem 8-8A (continued)ACCOUNTS PAYABLE SUBLEDGER
Frank’s SupplyDate Explanation PR Debit Credit Balanc
e2011
Apr.
9 P3 11,125 11,125
20
P3 730 11,855
Baskin CompanyDate Explanation PR Debit Credit Balanc
e2011
Apr.
2 P3 13,300 13,300
12
CD3
13,300 0
25
P3 10,375 10,375
Sprocket CompanyDate Explanation PR Debit Credit Balanc
e2011
Apr.
17
P3 12,750 12,750
23
G3 400 12,350
26
CD3
12,350 0
Eau Claire Inc.Date Explanation PR Debit Credit Balanc
e2011
Apr.
3 P3 1,380 1,380
G3 85 1,295
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.721 Fundamental Accounting Principles, Twelfth Canadian Edition
*Problem 8-8A (concluded) Part 5
NEWTON COMPANYSchedule of Accounts Receivable
April 30, 2011
Paul Abrams ..................................... $3,070Kelly Schaefer................................... 5,700Total accounts receivable ................. $8,770
NEWTON COMPANYSchedule of Accounts Payable
April 30, 2011Frank’s Supply .................................$11,855Baskin Company ............................... 10,375Eau Claire Inc. .................................. 1,295Total accounts payable .....................$23,525
NEWTON COMPANYTrial BalanceApril 30, 2011
Account Debit CreditCash ............................................$317,287Accounts receivable...................... 8,770Merchandise inventory.................. 95,000Office supplies ............................. 1,295Store supplies ............................. 730Store equipment .......................... 11,125Accounts payable ......................... $ 23,525Long-term notes payable ............. 217,000Jeff Newton, capital...................... 95,000Sales............................................ 155,185Sales discounts............................ 492Purchases.................................... 36,425Purchase discounts....................... 513Purchase returns and allowances. . 400Sales salaries expense ................. 19,500Advertising expense .................... 999 Totals ..........................................$491,623$491,623
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 722
*Problem 8-9A - Perpetual (100 minutes) Part 4
SALES JOURNAL Page 2Accts. PST GST COGS
Invoice
Rec. Payable
Payable
Sales Dr./
Date
Account Debited Number
PR Debit Credit Credit Credit MI Cr.
2011Mar.
2 Leroy Hackett 854 18,328.00
1,580.00
948.00
15,800.00
1,027
3 Sam Snickers 855 10,672.00
920.00 552.00
9,200.00
5,980
10
Marjorie Coble 856 5,336.00
460.00 276.00
4,600.00
2,990
27
Marjorie Coble 857 16,135.60
1,391.00
834.60
13,910.00
9,040
28
Sam Snickers 858 6,165 .40
531.50
318. 90
5,315.
00
3,455
31
Totals 56,637.00
4,882.50
2,929.50
48,825.00
22,492
(106) (224) (225) (413) (502/119)
CASH RECEIPTS JOURNAL Page 2 Sales Accts. Other PST GST COGS
Cash Discount
Rec. Sales Accts. Payable
Payable
Dr./
Date
Account Credited
Explanation
PR
Debit Debit Credit Credit Credit Credit Credit MI Cr.
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-Hill Ryerson Lim
ited. All rights reserved.692
Fundamental Accounting Principles, Tw
elfth Canadian Edition
2011Mar 6
L.T. Notes Pay.
Note to bank
251
72,000.00
72,000.00
12 Leroy Hackett
Invoice, Mar 2
18,012.00
316.00
18,328.00
13 Sam Snickers
Invoice, Mar 3
10,488.00
184.00
10,672.00
15 Sales Cash sales 191,028.80
164,680.00
16,468.00
9,880.80
107,042
20 Marjorie Coble
Invoice, Mar 10
5,244.00
92.00 5,336.00
31 Sales Cash sales 202,524.40
174,590.00
17,459.00
10,475.40
113,480
31 Totals 499,297.20
592.00
34,336 .00
339,270.00
72,000.00
33,927.00
20,356.20
220,522
(101) (415)
(106)
(413)
() (224)
(225)
(502/119)
*Problem 8-9A - Perpetual (continued)
PURCHASES JOURNAL Page 2Accts. Merch. Other GST
Date of
Payable
Inventory
Accounts
Rec’ble
Date
Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011Mar.
3 Office Supplies/Arndt Company
Mar 3
n/10 EOM
124/
1,187.20
1,120.00
67.20
5 Defore Industries Mar 3
2/10, n/30
45,156.00
42,600.00
2,556.00
9 Office Equip./Jett Supply
Mar 9
n/10 EOM
163/
22,101.00
20,850.00
1,251.00
14
The Welch Company Mar 13
2/10, n/30
33,522.50
31,625.00
1,897.50
16
Store Supplies/Arndt Company
Mar 16
n/10 EOM
125/
1,77 0.20
1,670 . 00
100 . 20
31
Totals 103,73 6 .90
74,225 . 00
23,640 . 00
5,871 . 90
(201) (119) (X) (108)
CASH DISBURSEMENTS JOURNAL Page 2 Merch. Other GST Accts.
Ch.
Cash Inv. Accts. Rec’ble
Payable
Date No.
Payee Account Debited PR Credit Credit Debit Debit Debit
2011Mar. 41 Defore Defore 44,304. 852.00 45,156
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-Hill Ryerson Lim
ited. All rights reserved.Solutions M
anual for Chapter 8693
13 6 Industries1 Industries 00 .0015 41
7Payroll Sales Salaries
Expense621 15,900.
0015,900
.0023 41
8The Welch Co. 2
The Welch Company
30,368.00
584.00 30,952.00
31 419
Payroll Sales Salaries Expense
621 15,900 .00
15,900.00
31 Totals 106,472.00
1,436.00 31,800.00
76,108.00
(101) (119) (X) (201)
1. 42,600 x 2% = 852 discount2. 31,625 – 2,425 = 29,200; 29,200 x 2% = 584 discount
*Problem 8-9A - Perpetual (continued)GENERAL JOURNAL Page 2
Date Account Title and Explanations PR DebitCredit
2011Mar.
17
Accounts Payable—The Welch Company ..............................
201/
2,570.50
GST Payable..................... 225 145.50 Merchandise Inventory...... 119 2,425.
00 Returned merchandise.
19
Accounts Payable—Jett Supply 201/
667.80
GST Payable..................... 225 37.80 Office Equipment.............. 163 630.00 Returned office equipment.
Parts 2 and 4ACCOUNTS RECEIVABLE SUBLEDGER
Marjorie CobleDate Explanation PR Debit Credit Balanc
e2011
Mar.
10
S2 5,336.00
5,336.00
20
CR2
5,336.00
0.00
27
S2 16,135.60
16,135.60
Leroy HackettDate Explanation PR Debit Credit Balanc
e2011
Mar.
2 S2 18,328.00
18,328.00
12
CR2
18,328.00
0.00
Sam Snickers
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.727 Fundamental Accounting Principles, Twelfth Canadian Edition
Date Explanation PR Debit Credit Balance
2011 Mar.
3 S2 10,672.00
10,672.00
13
CR2
10,672.00
0.00
28
S2 6,165.40
6,165.40
Parts 3 and 4ACCOUNTS PAYABLE SUBLEDGER
Arndt CompanyDate Explanation PR Debit Credit Balanc
e2011
Mar.
3 P2 1,187.20
1,187.20
16 P2 1,770.20
2,957.40
*Problem 8-9A - Perpetual (continued)Defore Industries
Date Explanation PR Debit Credit Balance
2011 Mar.
5 P2 45,156.00
45,156.00
13 CD3
45,156.00
0.00
Jett SupplyDate Explanation PR Debit Credit Balanc
e2011
Mar.
9 P2 22,101.00
22,101.00
19 G2 667.80 21,433.20
The Welch Company
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 728
Date Explanation PR Debit Credit Balance
2011 Mar.
14 P2 33,522.50
33,522.50
17 G2 2,570.50
30,952.00
23 CD3
30,952.00
0.00
Parts 1 and 4GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
2011 Mar.
31 CR2
499,297.20
499,297.20
31 CD3
106,472.00
392,825.20
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011Mar.
31 S2 56,637.00
56,637.00
31 CR2
34,336.00
22,301.00
GST Receivable Acct. No. 108
Date Explanation PR Debit Credit Balance
2011Mar.
31 P2 5,871.90
5,871.90
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.729 Fundamental Accounting Principles, Twelfth Canadian Edition
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 730
*Problem 8-9A - Perpetual (continued)Merchandise Inventory Acct. No.
119Date Explanation PR Debit Credit Balanc
e2011
Mar.
1 Beginning balance 250,000.00
17 G2 2,425.00
247,575.00
31 S2 22,492.00
225,083.00
31 CR2
220,522.00
4,561.00
31 P2 74,225.00
78,786.00
31 CD3
1,436.00
77,350.00
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
2011 Mar.
31
P2 1,120.00
1,120.00
Store Supplies Acct. No. 125
Date Explanation PR Debit Credit Balance
2011 Mar.
16 P2 1,670.00
1,670.00
Office Equipment Acct. No. 163
Date Explanation PR Debit Credit Balance
2011Mar.
9 P2 20,850.00
20,850.00
19 G2 630.00 20,220.
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.731 Fundamental Accounting Principles, Twelfth Canadian Edition
00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 732
*Problem 8-9A - Perpetual (continued)Accounts Payable Acct. No.
201Date Explanation PR Debit Credit Balanc
e2011
Mar.
17 G2 2,570.50
(2,570.50)
19 G2 667.80 (3,238.30)
31 P2 103,736.90
100,498.60
31 CD3
76,108.00
24,390.60
PST Payable Acct. No. 224
Date Explanation PR Debit Credit Balance
2011Mar.
31 S2 4,882.50
4,882.50
31 CR2 33,927.00
38,809.50
GST Payable Acct. No. 225
Date Explanation PR Debit Credit Balance
2011Mar.
17 G2 145.50 145.50
19 G2 37.80 183.3031 S2 2,929.5
03,112.8
031 CR2 20,356.
2023,469.
00
Long-Term Notes Payable Acct. No. 251
Date Explanation PR Debit Credit Balance
2011Mar.
6 CR2 72,000.00
72,000.00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.733 Fundamental Accounting Principles, Twelfth Canadian Edition
George Bledsoe, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
2011Mar.
1 Beginning balance 250,000.00
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
2011Mar.
31 S2 48,825.00
48,825.00
31 CR2 339,270.00
388,095.00
Sales Discounts Acct. No. 415
Date Explanation PR Debit Credit Balance
2011Mar.
31 CR2 592.00 592.00
*Problem 8-9A - Perpetual (continued)Cost of Goods Sold Acct. No.
502Date Explanation PR Debit Credit Balanc
e 2011
Mar.
31 S2 22,492.00
22,492.00
31 CR2 220,522.00
243,014.00
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit Balance
2011Mar.
15 CD3
15,900.00
15,900.00
31 CD 15,900. 31,800.
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 734
3 00 00
Part 5THE BLEDSOE COMPANY
Trial BalanceMarch 31, 2011
Account Debit CreditCash ............................. $392,825.20Accounts receivable ...... 22,301.00GST receivable............... 5,871.90Merchandise inventory... 77,350.00Office supplies............... 1,120.00Store supplies ............... 1,670.00Office equipment ........... 20,220.00 Accounts payable .......... $ 24,390.60PST payable .................. 38,809.50GST payable ................. 23,469.00Long-term notes payable 72,000.00George Bledsoe, capital . 250,000.00Sales ............................ 388,095.00Sales discounts ............. 592.00Cost of goods sold ........ 243,014.00Sales salaries expense.. . 31,800.00 Totals............................$796,764 .10 $796,764.10
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.735 Fundamental Accounting Principles, Twelfth Canadian Edition
*Problem 8-9A - Perpetual (concluded)
THE BLEDSOE COMPANYSchedule of Accounts Receivable
March 31, 2011
Marjorie Coble ............. $16,135.60Sam Snickers................ 6,165 .40 Total accounts receivable $22,301.00
THE BLEDSOE COMPANYSchedule of Accounts Payable
March 31, 2011
Arndt Company ............ $ 2,957.40Jett Supply................... 21,433 .20 Total accounts payable . $24,390 .60
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 736
*Problem 8-9A - Periodic (100 minutes) Part 4
SALES JOURNAL Page 2Accts. PST GST
Invoice
Rec. Payable
Payable
Sales
Date
Account Debited Number
PR Debit Credit Credit Credit
2011Mar.
2 Leroy Hackett 854 18,328.00
1,580.00
948.00 15,800.00
3 Sam Snickers 855 10,672.00
920.00 552.00 9,200.00
10
Marjorie Coble 856 5,336.00
460.00 276.00 4,600.00
27
Marjorie Coble 857 16,135.60
1,391.00
834.60 13,910.00
28
Sam Snickers 858 6,165 .40
531.50
318. 90
5,315.
0031
Totals 56,637.00
4,882.50
2,929.50
48,825.00
(106) (224) (225) (413)
CASH RECEIPTS JOURNAL Page 2 Sales Accts. Other PST GST
Cash Discount
Rec. Sales Accts. Payable Payable
Date
Account Credited
Explanation
PR Debit Debit Credit Credit Credit Credit Credit
201
Copyright © 2007 by M
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-Hill Ryerson Lim
ited. All rights reserved.700
Fundamental Accounting Principles, Tw
elfth Canadian Edition
1Mar
. 6L.T. Notes Pay.
Note to bank
251
72,000.00
72,000.00
12 Leroy Hackett
Invoice, Mar 2
18,012.00
316.00 18,328.00
13 Sam Snickers
Invoice, Mar 3
10,488.00
184.00 10,672.00
15 Sales Cash sales 191,028.80
164,680.00
16,468.00
9,880.80
20 Marjorie Coble
Invoice, Mar 10
5,244.00
92.00 5,336.00
31 Sales Cash sales 202,524.40
174,590.00
17,459.00
10,475.40
31 Totals 499,297.20
592.00 34,336 . 00
339,270.00
72,000.00
33,927.00
20,356.20
(101) (415)
(106)
(413) () (224) (225)
*Problem 8-9A - Periodic (continued)
PURCHASES JOURNAL Page 2Accts. Other GST
Date of
Payable
Purchases
Accounts
Rec’ble
Date
Account Invoice
Terms PR Credit Debit Debit Debit
2011Mar.
3 Office Supplies/Arndt Company
Mar 3
n/10 EOM
124/
1,187.20
1,120.00
67.20
5 Defore Industries Mar 3
2/10, n/30
45,156.00
42,600.00
2,556.00
9 Office Equip./Jett Supply
Mar 9
n/10 EOM
163/
22,101.00
20,850.00
1,251.00
14
The Welch Company Mar 13
2/10, n/30
33,522.50
31,625.00
1,897.50
16
Store Supplies/Arndt Company
Mar 16
n/10 EOM
125/
1,77 0.20
1,670 . 00
100 . 20
31
Totals 103,73 6 .90
74,225 . 00
23,640 . 00
5,871 . 90
(201) (505) (X) (108) CASH DISBURSEMENTS JOURNAL Page 3
Pur. Other GST Accts.Ch.
Cash Disc. Accts. Rec’ble
Payable
Date No.
Payee Account Debited
PR Credit Credit Debit Debit Debit
2011Mar.
13416
Defore Industries
Defore Industries
44,304.00
852.00 45,156.00
Copyright © 2007 by M
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-Hill Ryerson Lim
ited. All rights reserved.Solutions M
anual for Chapter 8701
15 417
Payroll Sales Salaries Expense
621
15,900.00
15,900.00
23 418
The Welch Co.
The Welch Company
30,368.00
584.00 30,952.00
31 419
Payroll Sales Salaries Expense
621
15,900 .00
15,900.00
31 Totals 106,472.00
1,436.00
31,800.00
76,108.00
(101) (507) (X) (201)
*Problem 8-9A - Periodic (continued)GENERAL JOURNAL Page 2
Date Account Title and Explanations PR DebitCredit
2011Mar.
17
Accounts Payable—The Welch Company ..............................
201/
2,570.50
GST Payable..................... 225 145.50 Purchases Returns and Allowances............................
506 2,425.00
Returned merchandise.
19
Accounts Payable—Jett Supply 201/
667.80
GST Payable..................... 225 37.80 Office Equipment.............. 163 630.00 Returned office equipment.
Parts 2 and 4ACCOUNTS RECEIVABLE SUBLEDGER
Marjorie CobleDate Explanation PR Debit Credit Balanc
e2011
Mar.
10
S2 5,336.00
5,336.00
20
CR2
5,336.00
0.00
27
S2 16,135.60
16,135.60
Leroy HackettDate Explanation PR Debit Credit Balanc
e2011
Mar.
2 S2 18,328.00
18,328.00
12
CR2
18,328.00
0.00
Sam Snickers
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.741 Fundamental Accounting Principles, Twelfth Canadian Edition
Date Explanation PR Debit Credit Balance
2011 Mar.
3 S2 10,672.00
10,672.00
13
CR2
10,672.00
0.00
28
S2 6,165.40
6,165.40
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*Problem 8-9A - Periodic (continued)Parts 3 and 4
ACCOUNTS PAYABLE SUBLEDGER
Arndt CompanyDate Explanation PR Debit Credit Balanc
e2011
Mar.
3 P2 1,187.20
1,187.20
16 P2 1,770.20
2,957.40
Defore IndustriesDate Explanation PR Debit Credit Balanc
e2011
Mar.
5 P2 45,156.00
45,156.00
13 CD3
45,156.00
0.00
Jett SupplyDate Explanation PR Debit Credit Balanc
e2011
Mar.
9 P2 22,101.00
22,101.00
19 G2 667.80 21,433.20
The Welch CompanyDate Explanation PR Debit Credit Balanc
e2011
Mar.
14 P2 33,522.50
33,522.50
17 G2 2,570.50
30,952.00
23 CD 30,952. 0.00
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3 00
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*Problem 8-9A - Periodic (continued)Parts 1 and 4
GENERAL LEDGERCash Acct. No.
101Date Explanation PR Debit Credit Balanc
e2011
Mar.
31 CR2
499,297.20
499,297.20
31 CD3
106,472.00
392,825.20
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011Mar.
31 S2 56,637.00
56,637.00
31 CR2
34,336.00
22,301.00
GST Receivable Acct. No. 108
Date Explanation PR Debit Credit Balance
2011Mar.
31 P2 5,871.90
5,871.90
Merchandise Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
2011Mar.
1 Beginning balance 250,000.00
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
2011
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Mar.
31
P2 1,120.00
1,120.00
Store Supplies Acct. No. 125
Date Explanation PR Debit Credit Balance
2011 Mar.
16 P2 1,670.00
1,670.00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 746
*Problem 8-9A - Periodic (continued)Office Equipment Acct. No.
163Date Explanation PR Debit Credit Balanc
e2011
Mar.
9 P2 20,850.00
20,850.00
19 G2 630.00 20,220.00
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
2011Mar.
17 G2 2,570.50
(2,570.50)
19 G2 667.80 (3,238.30)
31 P2 103,736.90
100,498.60
31 CD3
76,108.00
24,390.60
PST Payable Acct. No. 224
Date Explanation PR Debit Credit Balance
2011Mar.
31 S2 4,882.50
4,882.50
31 CR2 33,927.00
38,809.50
GST Payable Acct. No. 225
Date Explanation PR Debit Credit Balance
2011Mar.
17 G2 145.50 145.50
19 G2 37.80 183.3031 S2 2,929.5
03,112.8
0
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31 CR2 20,356.20
23,469.00
Long-Term Notes Payable Acct. No. 251
Date Explanation PR Debit Credit Balance
2011Mar.
6 CR2 72,000.00
72,000.00
George Bledsoe, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
2011Mar.
1 Beginning balance 250,000.00
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
2011Mar.
31 S2 48,825.00
48,825.00
31 CR2 339,270.00
388,095.00
*Problem 8-9A - Periodic (continued)Sales Discounts Acct. No.
415Date Explanation PR Debit Credit Balanc
e2011
Mar.
31 CR2 592.00 592.00
Purchases Acct. No. 505
Date Explanation PR Debit Credit Balance
2011Mar.
31 P2 74,225.00
74,225.00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 748
Purchases Returns and Allowances Acct. No. 506
Date Explanation PR Debit Credit Balance
2011Mar.
17 G2 2,425.00
2,425.00
Purchases Discounts Acct. No. 507
Date Explanation PR Debit Credit Balance
2011Mar.
31 CD2
1,436.00
1,436.00
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit Balance
2011Mar.
15 CD2
15,900.00
15,900.00
31 CD2
15,900.00
31,800.00
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*Problem 8-9A - Periodic (concluded)Part 5
THE BLEDSOE COMPANYTrial Balance
March 31, 2011
Account Debit CreditCash ............................. $392,825.20Accounts receivable ...... 22,301.00GST receivable .............. 5,871.90Merchandise inventory . . 250,000.00Office supplies............... 1,120.00Store supplies ............... 1,670.00Office equipment ........... 20,220.00 Accounts payable .......... $ 24,390.60PST payable .................. 38,809.50GST payable ................. 23,469.00Long-term notes payable 72,000.00George Bledsoe, capital . 250,000.00Sales ............................ 388,095.00Sales discounts ............. 592.00Purchases ..................... 74,225.00Purchases returns and allowances2,425.00Purchases discounts...... 1,436.00Sales salaries expense.. . 31,800.00 Totals............................$800,625 .10 $800,625.10
THE BLEDSOE COMPANYSchedule of Accounts Receivable
March 31, 2011
Marjorie Coble ............. $16,135.60Sam Snickers................ 6,165 .40 Total accounts receivable $22,301.00
THE BLEDSOE COMPANYSchedule of Accounts Payable
March 31, 2011
Arndt Company ............ $ 2,957.40
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Jett Supply................... 21,433 .20 Total accounts payable . $24,390 .60
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.751 Fundamental Accounting Principles, Twelfth Canadian Edition
*Problem 8-10A (30 minutes)Sales Journal Page X
Date Account Debited
Invoice No. PR A/R Dr.
PST Payable
Cr.
GST Payable
Cr.Sales
Cr
COGS Dr.Merchandise Inventory Cr.
2011Oct 12
K-Company 106 6,840 480 360 6,000 4,200
17 CanCor 107 7,980 560 420 7,000 4,60030 Delton
Hardware108 4,560 320 240 4,000 2,900
Cash Receipts Journal Page X
Date
Account Credited
Explanation PR
Cash
Dr.
Sales
DiscDr
A/R Cr.
Sales Cr.
Other Accounts Cr.
PST Payable Cr.
GST Payable Cr.
COGS/Dr. Merchan
diseInventory
/ Cr.201
1Oct
9Sales Inv #105 1,36
81,200 96 72 740
24 CanCor 7,910
70 7,980
26 K-Company 6,840
6,840
Purchases Journal Page X
Date Account Credited
Terms PR A/P Cr.Merchan
diseInventor
y Dr.
Other Accounts
Dr.
GST Rec’ble
Dr.
2011
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elfth Canadian Edition
Oct 1 Lexor Suppliers 2/10,n/30
4,240 4,000 240
27 Milton Suppliers n/30 8,480 8,000 480
Cash Disbursements Journal
Page X
Date Ch #
Account Debited PR Cash Cr.Merchandi
seInventory
Cr.
Other Accounts
Dr.
GST Rec’ble
Dr.A/P Dr.
2011Oct 5 13 Merchandise
inventory2,120 2,000 120
10 14 Lexor Suppliers 4,160 80 4,240
*Problem 8-11A (30 minutes)SALES JOURNAL Page X
Accts. PST GSTInvoice Rec. Payable Payable Sales
Date
Account Debited Number PR Debit Credit Credit Credit
2011
Oct. 12 K-Company 106 6,840 480 360 6,00017 CanCor 107 7,980 560 420 7,00030 Delton Hardware 108 4,560 320 240 4,000
CASH RECEIPTS JOURNAL Page X
Other Accts. PST GST SalesAccts. Rec. Payable Payable Sales Cash Discoun
tDate Account
CreditedExplanatio
nPR Credit Credit Credit Credit Credit Debit Debit
2011Oct.
9Sales Inv #105 96 72 1,200 1,368
24 CanCor 7,980 7,910 7026 K-Company 6,840 6,840
PURCHASES JOURNAL Page XAccts. Other GST
Date of
Payable Purchases
Accounts Rec’ble
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011
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ited. All rights reserved.Solutions M
anual for Chapter 8709
Oct. 1 Lexor Suppliers Oct. 1
2/10,n/30
4,240 4,000 240
27 Milton Suppliers Oct. 27
n/30 8,480 8,000 480
CASH DISBURSEMENTS JOURNAL Page XPur. Other GST Accts.
Ch.
Cash Disc. Accts. Rec’ble
Payable
Date No.
Payee Account Debited
PR Credit Credit Debit Debit Debit
2011Oct.
513 Cash purchase Purchases 2,120 2,000 120
10 14 Lexor Suppliers Lexor Suppliers
4,160 80 4,240
ALTERNATE PROBLEMSProblem 8-1B (20 minutes)
Date TransactionSpeci
al Journ
al
Subledger
May 1
The owner invested an automobile into the business.
G NE
2 Sold merchandise and received cash. CR MI3 Purchased merchandise inventory on
credit, 1/5, n/30.P AP/MI
4 Sold merchandise on credit; terms 2/15, n30.
S AR/MI
5 The customer of May 4 returned defective merchandise; the merchandise was scrapped.
G AR
6 Regarding the May 3 purchase, received a credit memorandum from the supplier granting an allowance.
G AP/MI
15 Paid mid-month salaries. CD NE17 Purchased office supplies on credit;
terms n/30.P AP
19 Paid for the balance owing regarding the May 3 purchase.
CD AP
22 Received payment regarding the May 4 sale.
CR AR
25 Borrowed money from bank. CR NE29 Purchased merchandise inventory
paying cash.CD MI
30 Accrued interest revenue. G NE30 Closed all revenue accounts to the
income summary.G NE
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Problem 8-2B (40 minutes)
Sales Journal Page: S1
Date Account DebitedInvoice No. PR
A/R Dr.Sales Cr.
COGS Dr.Merchandise Inventory Cr.
2011June 5 Martha Stohart 347 102,000 51,000
6 Carol Larson 348 8,200 5,70018 Lars Wilson 349 6,000 4,90025 Nathan Blythe 350 28,000 14,500
Cash Receipts Journal Page: CR1
DateAccount Credited
PR
Explanation
Cash Dr.
Sales
DiscDr A/R Cr. Sales Cr.
Other Accounts Cr.
COGS/Dr.
Merchandise
Inventory/ Cr.
2011June
12A/R – Carol Larson
Inv. 348 8,036 164 8,200
24 A/R – Martha Stohart
Inv. 347 102,000
102,000
27 A/R – Lars Wilson
Inv. 349 5,880 120 6,000
Purchases Journal Page: P1
Date Account Credited
Date of Invoice Terms P
RA/P Cr.
Merchandise Inventory
Dr.
Office Supplies
Dr.
Other Accounts
Dr.
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ited. All rights reserved.Solutions M
anual for Chapter 8711
2011June 1 Exeter
Equip./Equipment
June 1 n30 45,000 45,000
4 Whitby Co. June 4 1/5, n15
85,000 85,000
8 Suppliers Unlimited
June 8 2/10, n30
1,800 1,800
Problem 8-2B (concluded)Cash Disbursements Page:
CD1
Date Ch #
Account Debited PR Cash Cr.Merchan
diseInventory
Cr.
Other Accounts
Dr.A/P Dr.
2011June 11 10
1Whitby Co.* 80,200 80,200
14 102
Salaries Expense 15,000 15,000
28 103
Exeter Equipment 45,000 45,000
29 104
Salaries Expense 15,000 15,000
*85,000 – 4,800 = 80,200
General Journal Page: G1Date Account Titles and
ExplanationsPR Debit Credit
2011Jun
e7 Accounts Payable – Whitby Co....... 4,800
Merchandise Inventory........... 4,800 To record allowance received for damages that occurred during delivery.
26
Sales Returns and Allowances....... 2,800
Accounts Receivable – Nathan 2,800
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elfth Canadian Edition
Blythe.......................................... To record unsatisfactory goods returned by customer.
26
Merchandise Inventory.................. 2,200
Cost of Goods Sold................. 2,200 Goods returned to inventory.
Problem 8-3B (40 minutes)Note: Since posting to the General Ledger was not a requirement in this problem, posting references are shown for values posted to the subledgers only.
Part 3SALES JOURNAL Page 3
Date Account Debited
Invoice Number
PRA/R Dr. Sales.
Cr.
Cost of Goods Sold Dr. Merchandise
Inventory Cr.
2011July
5 Karen Harden 918 18,400 10,200
6 Paul Kane 919 7,500 4,10013
Kelly Grody 920 8,350 4,600
14
Karen Harden 921 4,100 2,300
CASH RECEIPTS JOURNAL Page 3
DateAccount Credited Explanati
on
PR
Cash Debit
Sales Discount
Debit
Accts.
Rec. Credit
Sales Credit
Other
Accts.
Credit
Cost of Goods Sold Dr.
Merchandise Inventory Cr.
2011July
15
Karen Harden
Sale of Jul 5
18,032 368 18,400
15
Sales Cash sales
121,370
121,370
66,700
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anual for Chapter 8713
PURCHASES JOURNAL Page 3
Date Account Credited
Date of Invoice Terms PR
Accounts
Payable
Credit
Merchandise
Inventory Debit
Office Suppli
es Debit
Other
Accts.
Debit2011
July 1 Beech Company Jun 30
2/10, n/60
6,300 6,300
7 Blackwater Inc. /Store Supp.
Jul 7 n/10 EOM
1,050 1,050
9 Poppe’s Supply /Store Equip.
Jul 8 n/10 EOM
37,710 37,710
Problem 8-3B (continued)CASH DISBURSEMENTS JOURNAL Page
3
Date
Ch. No. Payee Account Debited PR
Cash Credit
Merchandise
Inventory Credit
Other Accts. Debit
Accts.
Payable
Debit2011July
3 300
The Weekly Journal
Advertising Expense
575 575
10
301
Beech Company
Beech Company 6,174 126 6,300
15
302
Payroll Sales Salaries Expens
30,620 30,620
GENERAL JOURNAL Page 3Date
Account Titles and Explanations
PR Debit Credit
2011July 8 Accounts Payable—Blackwater
Inc. .....................................201/
150
Store Supplies................ 125 150 Returned supplies to supplier.
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Problem 8-3B (continued)Parts 1, 2, 3
ACCOUNTS RECEIVABLE SUBLEDGER
Karen HardenDate Explanation PR Debit Credit Bala
nce2011
July 5 S3 18,400 18,400
14
S3 4,100 22,500
15
CR3
18,400 4,100
Kelly GrodyDate Explanation PR Debit Credit Bala
nce2011
July 13
S3 8,350 8,350
Paul KaneDate Explanation PR Debit Credit Bala
nce2011
July
6 S3 7,500 7,500
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.765 Fundamental Accounting Principles, Twelfth Canadian Edition
Problem 8-3B (concluded)
ACCOUNTS PAYABLE SUBLEDGER
Beech CompanyDate Explanation PR Debit Credit Balanc
e2011
July 1 P3 6,300 6,30010
CD3
6,300 0
Blackwater Inc.Date Explanation PR Debit Credit Balanc
e2011
July 7 P3 1,050 1,0508 G3 150 900
Poppe’s SupplyDate Explanation PR Debit Credit Balanc
e2011
July 9 P3 37,710 37,710
Sprague CompanyDate Explanation PR Debit Credit Balanc
e2011
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 766
Problem 8-4B (70 minutes)Parts 2, 3, 4
SALES JOURNAL Page 3
Date Account DebitedInvoice Number
PR
A/R Dr. Sales.
Cr.
Cost of Goods Sold Dr. Merchandise
Inventory Cr.
2011July
5 Karen Harden 918 18,400 10,200
6 Paul Kane 919 7,500 4,10013
Kelly Grody 920 8,350 4,600
14
Karen Harden 921 4,100 2,300
29
Paul Kane 922 28,090 15,500
30
Kelly Grody 923 15,750 8,700
31
Totals 82,190 45,400
(106/413)
(502/119)
CASH RECEIPTS JOURNAL Page 3
DateAccount Credited Explanati
on
PR
Cash Debit
Sales Discount
Debit
Accts.
Rec. Credit
Sales Credit
Other
Accts.
Credit
Cost of Goods Sold Dr.
Merchandise Inventory Cr.
2011
Copyright © 2007 by M
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ited. All rights reserved.Solutions M
anual for Chapter 8717
July
15
Karen Harden
Sale of Jul 5
18,032 368 18,400
15
Sales Cash sales
121,370
121,370
66,700
16
Paul Kane Sale of Jul 6
7,350 150 7,500
21
L.T. Notes Pay
Note to bank
251
20,000 20,000
23
Kelly Grody
Sale of Jul 13
8,183 167 8,350
24
Karen Harden
Sale of Jul 14
4,018 82 4,100
31
Sales Cash sales
79,02 0
79,02 0
43,500
31
Totals 257,973
767 38,350
200,390
20,000
110,200
(101)
(415)
(106)
(413)
(X) (502/119)
Problem 8-4B (continued)PURCHASES JOURNAL Page
3
Date Account Credited
Date of Invoice Terms PR
Accounts
Payable
Credit
Merchandise
Inventory Debit
Office Suppli
es Debit
Other
Accts.
Debit2011July 1 Beech Company Jun
302/10, n/60
6,300 6,300
7 Blackwater Inc. /Store Supp.
Jul 7 n/10 EOM
125/
1,050 1,050
9 Poppe’s Supply /Store Equip.
Jul 8 n/10 EOM
165/
37,710 37,710
17
Sprague Company Jul 17
2/10, n/60
8,200 8,200
20
Poppe’s Supply Jul 19
n/10 EOM
750 750
26
Beech Company Jul 26
2/10, n/30
9,770 9,770
31
Totals 63,780 24,270 750 38,760
(201)
(119)
(124) (X)
CASH DISBURSEMENTS JOURNAL Page 3
Date
Ch. No. Payee Account Debited PR
Cash Credit
Merchandise
Inventory Credit
Other Accts. Debit
Accts.
Payable
Debit201
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elfth Canadian Edition
1July
3 300
The Weekly Journal
Advertising Expense
655
575 575
10
301
Beech Company
Beech Company 6,174 126 6,300
15
302
Payroll Sales Salaries Expens e
621
30,620 30,620
27
303
Sprague Company
Sprague Company
5,684 116 5,800*
31
304
Payroll Sales Salaries Expense
621
30,620 30,620
31
Totals 73,673 242 61,815 12,100
(101)
(119) (X) (201)
* $8,200 – $2,400 return = $5,800
Problem 8-4B (continued)GENERAL JOURNAL Page 3
Date
Account Titles and Explanations
PR Debit Credit
2011July 8 Accounts Payable—Blackwater
Inc. .....................................201/
150
Store Supplies................ 125 150 Returned supplies to supplier.
24
Accounts Payable—Sprague Company.............................
201/
2,400
Merchandise Inventory.... 119 2,400 Returned defective inventory to merchandise supplier.
Parts 1, 2, 3, 4GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
2011June
30
Balance Forward 95,000
July 31
CR3
257,973
352,973
31
CD3
73,673 279,300
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011July 3
1S3 82,190 82,190
31
CR3
38,350 43,840
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Merchandise Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
2011Jun. 3
0Balance Forward 167,00
0Jul. 2
4G3 2,400 164,60
031
S3 45,400 119,200
31
CR3
110,200
9,000
31
P3 24,270 33,270
31
CD3
242 33,028
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
2011July 3
1P3 750 750
Problem 8-4B (continued)Store Supplies Acct. No.
125Date Explanation PR Debit Credit Balanc
e2011
July 7 P3 1,050 1,0508 G3 150 900
Store Equipment Acct. No. 165
Date Explanation PR Debit Credit Balance
2011July 9 P3 37,710 37,710
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 772
2011July
8 G3 150 (150)
24
G3 2,400 (2,550)
31
P3 63,780 61,230
31
CD3
12,100 49,130
Long-Term Notes Payable Acct. No. 251
Date Explanation PR Debit Credit Balance
2011June
30
Balance Forward 167,000
July 21
CR3
20,000 187,000
Gene Eldridge, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
2011Jun. 3
0Balance Forward 95,000
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
2011July 3
1S3 82,190 82,190
31
CR3
200,390
282,580
Sales Discounts Acct. No. 415
Date Explanation PR Debit Credit Balance
2011July 3
1CR3
767 767
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Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 774
Problem 8-4B (continued)Cost of Goods Sold Acct. No.
502Date Explanation PR Debit Credit Balanc
e2011
July 31
S3 45,400 45,400
31
CR3
110,200
155,600
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit Balance
2011July 1
5CD3
30,620
30,620
31
CD3
30,620
61,240
Advertising Expense Acct. No. 655
Date Explanation PR Debit Credit Balance
2011July 3 CD
3575 575
ACCOUNTS RECEIVABLE SUBLEDGER
Karen HardenDate Explanation PR Debit Credit Bala
nce2011
July 5 S3 18,400 18,400
14
S3 4,100 22,500
15
CR3
18,400 4,100
24
CR3
4,100 0
Kelly Grody
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Date Explanation PR Debit Credit Balance
2011July 1
3S3 8,350 8,350
23
CR3
8,350 0
30
S3 15,750 15,750
Paul KaneDate Explanation PR Debit Credit Bala
nce2011
July
6 S3 7,500 7,500
16
CR3
7,500 0
29
S3 28,090 28,090
Problem 8-4B (continued)ACCOUNTS PAYABLE SUBLEDGER
Beech CompanyDate Explanation PR Debit Credit Balanc
e2011
July 1 P3 6,300 6,30010
CD3
6,300 0
26
P3 9,770 9,770
Blackwater Inc.Date Explanation PR Debit Credit Balanc
e2011
July 7 P3 1,050 1,0508 G3 150 900
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 776
Poppe’s SupplyDate Explanation PR Debit Credit Balanc
e2011
July 9 P3 37,710 37,71020
P3 750 38,460
Sprague CompanyDate Explanation PR Debit Credit Balanc
e2011
July 17
P3 8,200 8,200
24
G3 2,400 5,800
27
CD3
5,800 0
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Problem 8-4B (continued)Part 5
ELDRIDGE INDUSTRIESTrial BalanceJuly 31, 2011
Account Debit CreditCash................................................... $279,3
00Accounts receivable............................. 43,840Merchandise inventory........................ 33,028Office supplies..................................... 750Store supplies..................................... 900Store equipment.................................. 37,710Accounts payable................................ $
49,130Long-term notes payable..................... 187,00
0Gene Eldridge, capital.......................... 95,000Sales................................................... 282,58
0Sales discounts................................... 767Cost of goods sold............................... 155,60
0Sales salaries expense......................... 61,240Advertising expense............................ 5
75
Totals................................................. $613,710
$613,710
ELDRIDGE INDUSTRIESSchedule of Accounts Receivable
July 31, 2011
Kelly Grody.......................................... $15,750
Paul Kane............................................ 28,09 0
Total accounts receivable..................... $43,840
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 778
ELDRIDGE INDUSTRIESSchedule of Accounts Payable
July 31, 2011
Beech Company................................... $ 9,770
Blackwater Inc. ................................... 900
Poppe’s Supply................................... 38,46 0
Total accounts payable........................ $49,130
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.779 Fundamental Accounting Principles, Twelfth Canadian Edition
Problem 8-4B (concluded)Analysis component:
To find the error(s), re-add the account balances on the schedule of accounts
payable to confirm that the addition was correct. trace the balances listed on the schedule of accounts
payable back to the subsidiary accounts to confirm that they were listed correctly on the schedule.
recalculate the balance of each subsidiary account to confirm that the additions and subtractions were correct.
trace the postings from each subsidiary account and from the controlling account back to the appropriate journals.
Since the purchases and cash disbursements journals were footed and crossfooted before posting, the previous steps should disclose the error.
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 780
Problem 8-5B (120 minutes)Parts 1, 2, 3
SALES JOURNAL Page 3
Date Account DebitedInvoiceNumbe
r
PR
A/R Dr. Sales.
Cr.
Cost of Goods Sold Dr. Merchandise
Inventory Cr.2011
Oct.
6 Marge Craig 913 3,300 1,800
12 Heather Flatt 914 3,650 2,00015 Amy Izon 915 3,100 1,70016 Heather Flatt 916 4,290 2,46021 Jan Wildman 917 5,52
0 3,000
31 Totals 19,86 0
10,960
(106/413)
(502/119)
CASH RECEIPTS JOURNAL
Page 3
Date
AccountCredited
Explanation PR
Cash Debit
SalesDiscount
Debit
Acct. Rec. Credit
Sales Credit
Other
Acct.
Credit
Cost of Goods Sold Dr.
Merchandise Inventory Cr.
2011Oct. 2
Jan Wildman
Invoice Nov 23
4,116 84 4,200*
15 Sales Cash sales 38,830 38,830 21,400
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anual for Chapter 8725
15 Marge Craig
Invoice, Dec 6
2,401 49 2,450*
22 Heather Flatt
Invoice, Dec 12
3,577 73 3,650**
25 Amy Izon Invoice, Dec 15
2,842 58 2,900**
28 Store Supplies
Sold supplies
125
58 58
31 Sales Cash sales 66,12 8
66,12 8
36,400
31 Totals 117,952
264 13,200 **
104,958
58 57,800
(101) (415) (106) (413)
(X) (502/119)
* $3,300 – $850 return = $2,450** $3,100 – $200 return = $2,900
Problem 8-5B (continued)
PURCHASES JOURNAL Page 2
Date Account CreditedDate of Invoice
Terms PRAccoun
ts Payabl
e Credit
Merchandise
Inventory Debit
Office Suppli
es Debit
Other Accts. Debit
2011Oct.
2 Walters Company Oct 2 2/10, n/60
3,200 3,200
5 Green Supply Co. Oct 3 n/10 EOM
1,300 1,300
15
Walters Company Oct 15
2/10, n/60
3,990 3,990
15
Sunshine Company Oct 15
2/10, n/60
2,650 2,650
16
Green Supply Co. Oct 16
n/10 EOM
765 765
20
Green Supply Co. /Store Equip.
Oct 19
n/10 EOM
165/
7,475 7,475
28
Sunshine Company Oct 28
2/10, n/60
6,030 6,030
31
Totals 25,410 17,170 765 7,475
(201)
(119)
(124) (X)
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Problem 8-5B (continued)CASH DISBURSEMENTS JOURNAL Page
4
DateCh. No.
Payee Account Debited PRCash Credi
t
Merchandise
Inventory Credit
Other Accts. Debit
Accts.
Payable
Debit2011Oct.
2 619
Omni Realty Co.
Rent Expense 640
2,250
2,250
6 620
Fireside Company
Fireside Company
3,724
76 3,800
12
621
Walters Company
Walters Company
3,136
64 3,200
15
622
Jamie Ford Sales Salaries Expense
621
2,620
2,620
25
623
Walters Company*
Walters Company
3,283
67 3,350
25
624
Sunshine Company
Sunshine Company
2,597
53 2,650
29
625
Marlee Levin Marlee Levin, Withdrawals
302
4,000
4,000
30
626
Midwest Elec. Co.
Utilities Expense...................................690
990 990
30
627
Jamie Ford. Sales Salaries Expense
621
2,6 20
2,62 0
31
Totals 25,220
260 12,480
13,000
(101)
(507) (X) (201)
*3,990 – 640 return = 3,350
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anual for Chapter 8727
Problem 8-5B (continued)GENERAL JOURNAL Page
2Date
Account Title and Explanations PR Debit Credit
2011Oct.
4 Accounts Payable—Fireside Company....................................
201/
460
Merchandise Inventory........... 119 460 Defective merchandise returned.
9 Sales Returns and Allowances...... 414 850 Accounts Receivable—Marge Craig..........................................
106/
850
Returned merchandise was scrapped.
18
Sales Returns and Allowances...... 414 200
Accounts Receivable—Amy Izon 106/
200
Returned merchandise was scrapped.
19
Accounts Payable—Walters Company....................................
201/
640
Merchandise Inventory........... 119 640 Returned merchandise.
20
Accounts Payable—Green Supply Co. ............................................
201/
143
Office Supplies....................... 124 143 Returned office supplies.
ACCOUNTS RECEIVABLE SUBLEDGER
Marge CraigDate Explanation PR Debit Credit Balan
ce2011
Oct.
6 S3 3,300 3,300
9 G2 850 2,4501 CR 2,450 0
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5 3
Heather FlattDate Explanation PR Debit Credit Balan
ce2011
Oct.
12
S3 3,650 3,650
16
S3 4,290 7,940
22
CR3
3,650 4,290
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 786
Problem 8-5B (continued)Amy Izon
Date Explanation PR Debit Credit Balance
2011Oct.
15
S3 3,100 3,100
18
G2 200 2,900
25
CR3
2,900 0
Jan WildmanDate Explanation PR Debit Credit Balan
ce2011
Sept
23
S2 4,200 4,200
Oct.
2 CR3
4,200 0
21
S3 5,520 5,520
Part 2ACCOUNTS PAYABLE SUBLEDGER
Fireside CompanyDate Explanation PR Debit Credit Balan
ce2011
Sept
28
P1 4,260 4,260
Oct.
4 G2 460 3,800
6 CD4
3,800 0
Green Supply CompanyDate Explanation PR Debit Credit Balan
ce2011
Oct.
5 P2 1,300 1,300
16
P2 765 2,065
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20
P2 7,475 9,540
20
G2 143 9,397
Sunshine CompanyDate Explanation PR Debit Credit Balan
ce2011
Oct.
15
P2 2,650 2,650
25
CD4
2,650 0
28
P2 6,030 6,030
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 788
Problem 8-5B (continued)Walters Company
Date Explanation PR Debit Credit Balance
2011Oct.
2 P2 3,200 3,200
12
CD4
3,200 0
15
P2 3,990 3,990
19
G2 640 3,350
25
CD4
3,350 0
Parts 2, 3GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
2011Sept
30
Balance 5,361
Oct.
31
CR3
117,952
123,313
31
CD4
25,220 98,093
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011Sept
30
Balance 4,200
Oct.
9 G2 850 3,350
18
G2 200 3,150
31
S3 19,860 23,010
31
CR3
13,200 9,810
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Merchandise Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
2011Sept
30
Balance 66,970
Oct.
4 G2 460 66,510
19
G2 640 65,870
31
S3 10,960 54,910
31
P2 17,170 72,080
31
CD4
260 71,820
31
CR3
57,800 14,020
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
2011Sept
30
Balance 607
Oct.
20
G2 143 464
31
P2 765 1,229
Problem 8-5B (continued)Store Supplies Acct. No.
125Date Explanation PR Debit Credit Balan
ce2011
Sept
30
Balance 346
Oct.
28
CR3
58 288
Store Equipment Acct. No. 165
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 790
Date Explanation PR Debit Credit Balance
2011Sept
30
Balance 42,129
Oct.
20
P2 7,475 49,604
Accumulated Amortization, Store Equipment
Acct. No. 166
Date Explanation PR Debit Credit Balance
2011Sept
30
Balance 9,153
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
2011Sept
30
Balance 4,260
Oct.
4 G2 460 3,800
19
G2 640 3,160
20
G2 143 3,017
31
P2 25,410 28,427
31
CD4
13,000 15,427
Marlee Levin, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
2011Sept
30
Balance 106,200
Marlee Levin, Withdrawals Acct. No. 302
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Date Explanation PR Debit Credit Balance
2011Oct.
29
CD4
4,000 4,000
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
2011Oct.
31
S3 19,860 19,860
31
CR3
104,958
124,818
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Problem 8-5B (continued)Sales Returns and Allowances Acct. No.
414Date Explanation PR Debit Credit Balan
ce2011
Oct.
9 G2 850 850
18
G2 200 1,050
Sales Discounts Acct. No. 415
Date Explanation PR Debit Credit Balance
2011Oct.
31
CR3
264 264
Cost of Goods Sold Acct. No. 502
Date Explanation PR Debit Credit Balance
2011Oct.
31
S3 10,960 10,960
31
CR3
57,800 68,760
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit Balance
2011Oct.
15
CD4
2,620 2,620
30
CD4
2,620 5,240
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance
2011Oc 2 CD 2,250 2,250
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t. 4
Utilities Expense Acct. No. 690
Date Explanation PR Debit Credit Balance
2011Oct.
30
CD4
990 990
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Problem 8-5B (concluded)Part 4
STARSHINE PRODUCTSTrial Balance
October 31, 2011Account Debit Credit
Cash......................................... $ 98,093
Accounts receivable................... 9,810Merchandise inventory............... 14,020Office supplies........................... 1,229Store supplies........................... 288Store equipment........................ 49,604Accumulated amortization, store equipment.................................
$ 9,153
Accounts payable....................... 15,427
Marlee Levin, capital.................. 106,200
Marlee Levin, withdrawals.......... 4,000Sales......................................... 124,8
18Sales returns and allowances...... 1,050Sales discounts.......................... 264Cost of goods sold..................... 68,760Sales salaries expense............... 5,240Rent expense............................. 2,250Utilities expense........................ 99
0
Totals....................................... $255,598
$255,598
STARSHINE PRODUCTSSchedule of Accounts Receivable
October 31, 2011
Heather Flatt........ $4,290Jan Wildman......... 5,520Total accounts payable................
$9,810
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STARSHINE PRODUCTSSchedule of Accounts
PayableOctober 31, 2011
Green Supply Company..............
$ 9,397
Sunshine Company. .............
6,03 0
Total accounts payable................
$15,427
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 796
Problem 8-6B (30 minutes)
Sales Journal Page 1
Date Account DebitedInvoice No. PR
A/R Dr.Sales Cr. P
R
COGS Dr.Merchandise Inventory Cr.
2011July 9 W. Tilden 213 300.00 108.00
15 J. Samuelson 214 750.00 270.0022 V. Nels 215 600.00 200.6030 M. Bains 216 810.00 270.81
Purchases Journal Page 1
Date Account Credited
Date of
Invoice Terms PR A/P Cr. PR
Merchandise
Inventory
Dr.
Office Supplie
s Dr.
Other Accounts
Dr.2011July 4 Tulsco Supply July
4n/30 450.00 450.00
18 Gentry Holdings July 18
n/30 270.00 270.00
NOTE: An additional PR column has been added to facilitate the referencing of inventory entries into the inventory subsidiary ledger.
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elfth Canadian Edition
Problem 8-6B (concluded)Inventory Subledger Record — Weighted-Average Perpetual
Inventory Balance Dat e
PR Purchases Sales (at cost) (a) (b) (a)
(b)
Units
Unit Cos
tTotal Cost
Units
Unit Cost
Total Cost
Total
Units
Average
Cost/Unit
Total Cost
Inventory Balance Calculations
July 31
Beginning inventory
30 @ $12.00
= $ 360.00
30 $12.00
$ 360.00
30
$ 360.0
04 P
145 @ $10.
00= $
450.0045
@ 10.00
= 450 .00
75 $10.80
$ 810.00
75
$ 810.0
075
$ 810.0
09 S
110 @ $10.
80= $
108.00–10
@ 10.80
= –108.0
065 $10.8
0$
702.0065
$ 702.0
065
$ 702.0
015 S
125 @ $10.
80= $
270.00–25
@ 10.80
= –270.0
040 $10.8
0$
432.0040
$ 432.0
040
$ 432.0
018 P
130 @ $9.0
0= $
270.0030
@ 9.00
= 270 .00
70 $10.03
$ 702.00
70
$ 702.0
070
$ 702.0
022 S
120 @ $10.
03= $
200.60–20
@ 10.03
= – 200.6
050 $10.0
3$
501.4050
$ 501.4
050
$ 501.4
Copyright © 2011 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 798
030 S
127 @ $10.
03= $
270.81–27
@ 10.03
= – 270.8
123 $10.0
3$
230.5923
$ 230.5
9Tota
l105
$1,080.00
82 $849.41 23 $230.59
Cost of goods available for sale =
Cost of goods sold +
Ending inventory
Note: An additional PR column has been added to the Inventory Subledger Record to facilitate referencing of inventory entries.
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*Problem 8-7B (40 minutes)
Note: Since posting to the General Ledger was not a requirement in this problem, posting references are shown for values posted to the subledgers only.
SALES JOURNAL Page 3Invoic
eA/R Dr.
Date Account Debited Number
PR Sales Cr.
2011July
5 Karen Harden 918 18,400
6 Paul Kane 919 7,50013 Kelly Grody 920 8,35014 Karen Harden 921 4,100
CASH RECEIPTS JOURNAL Page 3Sales Accts. Other
Account Cash Disc. Rec. Sales Accts.Date Credited Explanation PR Debit Debit Credit Credit Credit2011
July 15
Karen Harden
Sale of July 5 18,032 368 18,400
15
Sales Cash sales 121,370
121,370
PURCHASES JOURNAL Page 3Accoun
tsOffice Other
Date of
Payable
Purchases
Supplies
Accounts
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011
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July 1 Beech Company Jun. 30
2/10,n/60
6,300 6,300
7 Blackwater Inc./Store Supplies
July 7 n/10 EOM
1,050 1,050
9 Poppe’s Supply/Store Equipment
July 8 n/10 EOM
37,710
37,710
*Problem 8-7B (continued)CASH DISBURSEMENTS JOURNAL Page 3
Purchase
Other Accts.
Ch. Cash Discount
Accts. Payable
Date No. Payee Account Debited PR Credit Credit Debit Debit2011
July 3 300 The Weekly Journal
Advertising Expense
575 575
10
301 Beech Company
Beech Company 6,174 126 6,300
15
302 Payroll Sales Salaries Expense
30,620
30,620
GENERAL JOURNAL Page 3Date
Account Titles and Explanations
PR Debit Credit
2011July 8 Accounts Payable—Blackwater
Inc. .....................................201/
150
Store Supplies................ 125 150 Returned supplies to supplier.
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anual for Chapter 8737
*Problem 8-7B (concluded)ACCOUNTS RECEIVABLE SUBLEDGER
Karen HardenDate Explanation PR Debit Credit Bala
nce2011
July 5 S3 18,400 18,400
14
S3 4,100 22,500
15
CR3
18,400 4,100
Kelly GrodyDate Explanation PR Debit Credit Bala
nce2011
July 13
S3 8,350 8,350
Paul KaneDate Explanation PR Debit Credit Bala
nce2011
July
6 S3 7,500 7,500
ACCOUNTS PAYABLE SUBLEDGER
Beech CompanyDate Explanation PR Debit Credit Balanc
e2011
July 1 P3 6,300 6,30010
CD3
6,300 0
Blackwater Inc.Date Explanation PR Debit Credit Balanc
e2011
July 7 P3 1,050 1,0508 G3 150 900
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Poppe’s SupplyDate Explanation PR Debit Credit Balanc
e2011
July 9 P3 37,710 37,710
Sprague CompanyDate Explanation PR Debit Credit Balanc
e2011
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 804
*Problem 8-8B (70 minutes)SALES JOURNAL Page 3
Invoice
A/R Dr.
Date Account Debited Number
PR Sales Cr.
2011July
5 Karen Harden 918 18,400
6 Paul Kane 919 7,50013 Kelly Grody 920 8,35014 Karen Harden 921 4,10029 Paul Kane 922 28,09
030 Kelly Grody 923 15,75
0Totals 82,19
0(106/413)
CASH RECEIPTS JOURNAL Page 3Sales Accts. Other
Account Cash Disc. Rec. Sales Accts.Date Credited Explanation PR Debit Debit Credit Credit Credit2011
July 15
Karen Harden
Sale of July 5 18,032
368 18,400
15
Sales Cash sales 121,370
121,370
16
Paul Kane Sale of July 6 7,350 150 7,500
21
L.T. Notes P.
Note to bank 251
20,000
20,000
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anual for Chapter 8739
23
Kelly Grody
Sale of July 13 8,183 167 8,350
24
Karen Harden
Sale of July 14 4,018 82 4,100
31
Sales Cash sales 79,0 20
79,0 20
Totals 257,973
767 38,350
200,390
20,000
(101) (415) (106) (413) (X)
*Problem 8-8B (continued)
PURCHASES JOURNAL Page 3Account
sOffice Other
Date of
Payable Purchases
Supplies
Accounts
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011July 1 Beech Company Jun.
302/10,n/60
6,300 6,300
7 Blackwater Inc./Store Supplies
July 7
n/10 EOM
125/
1,050 1,050
9 Poppe’s Supply/Store Equipment
July 8
n/10 EOM
165/
37,710 37,710
17 Sprague Company July 17
2/10,n/60
8,200 8,200
20 Poppe’s Supply July 19
n/10 EOM
750 750
26 Beech Company July 26
2/10,n/30
9,770 9,77 0
Totals 63,780 24,270
750 38,760
(201) (505) (124)
(X)
CASH DISBURSEMENTS JOURNAL Page 3Purcha
seOther Accts.
Ch. Cash Discount
Accts. Payable
Date No. Payee Account Debited PR Credit Credit Debit Debit
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ited. All rights reserved.740
Fundamental Accounting Principles, Tw
elfth Canadian Edition
2011July 3 300 The Weekly
JournalAdvertising Expense
655 575 575
10
301 Beech Company
Beech Company 6,174 126 6,300
15
302 Payroll Sales Salaries Expense
621 30,620
30,620
27
303 Sprague Company
Sprague Company
5,684 116 5,800*
31
304 Payroll Sales Salaries Expense
621 30,620
30,620
Totals 73,673
242 61,815
12,100
(101) (506) (X) (201)*$8,200 - $2,400 return = $5,800
*Problem 8-8B (continued)GENERAL JOURNAL Page 3
Date
Account Titles and Explanations
PR Debit Credit
2011July 8 Accounts Payable—Blackwater
Inc. .....................................201/
150
Store Supplies................ 125 150 Returned supplies to supplier.
24
Accounts Payable—Sprague Company.............................
201/
2,400
Purchase Returns and Allowances..........................
507 2,400
Returned defective inventory to merchandise supplier.
Parts 1, 2, 3, 4GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
2011June
30
Balance Forward 95,000
July 31
CR3
257,973
352,973
31
CD3
73,673 279,300
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011July 3
1S3 82,190 82,190
31
CR3
38,350 43,840
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Merchandise Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
2011Jun. 3
0Balance Forward 167,00
0
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
2011July 3
1P3 750 750
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 810
*Problem 8-8B (continued)Store Supplies Acct. No.
125Date Explanation PR Debit Credit Balanc
e2011
July 7 P3 1,050 1,0508 G3 150 900
Store Equipment Acct. No. 165
Date Explanation PR Debit Credit Balance
2011July 9 P3 37,710 37,710
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance2011
July 8
G3 150 (150)
24
G3 2,400 (2,550)
31
P3 63,780 61,230
31
CD3
12,100 49,130
Long-Term Notes Payable Acct. No. 251
Date Explanation PR Debit Credit Balance
2011June
30
Balance Forward 167,000
July 21
CR3
20,000 187,000
Gene Eldridge, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
2011Jun. 3 Balance Forward 95,000
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.811 Fundamental Accounting Principles, Twelfth Canadian Edition
0
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
2011July 3
1S3 82,190 82,190
31
CR3
200,390
282,580
Sales Discounts Acct. No. 415
Date Explanation PR Debit Credit Balance
2011July 3
1CR3
767 767
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 812
*Problem 8-8B (continued)Purchases Acct. No.
505Date Explanation PR Debit Credit Balanc
e2011
July 31
P3 24,270 24,270
Purchase Discounts Acct. No. 506
Date Explanation PR Debit Credit Balance
2011July 3
1CD3
242 242
Purchase Returns and Allowances Acct. No. 507
Date Explanation PR Debit Credit Balance
2011July 2
4G3 2,400 2,400
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit Balance
2011July 1
5CD3
30,620
30,620
31
CD3
30,620
61,240
Advertising Expense Acct. No. 655
Date Explanation PR Debit Credit Balance
2011July 3 CD
3575 575
ACCOUNTS RECEIVABLE SUBLEDGER
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.813 Fundamental Accounting Principles, Twelfth Canadian Edition
Karen HardenDate Explanation PR Debit Credit Bala
nce2011
July 5 S3 18,400 18,400
14
S3 4,100 22,500
15
CR3
18,400 4,100
24
CR3
4,100 0
Kelly GrodyDate Explanation PR Debit Credit Bala
nce2011
July 13
S3 8,350 8,350
23
CR3
8,350 0
30
S3 15,750 15,750
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 814
*Problem 8-8B (continued)Paul Kane
Date Explanation PR Debit Credit Balance
2011July
6 S3 7,500 7,500
16
CR3
7,500 0
29
S3 28,090 28,090
ACCOUNTS PAYABLE SUBLEDGER
Beech CompanyDate Explanation PR Debit Credit Balanc
e2011
July 1 P3 6,300 6,30010
CD3
6,300 0
26
P3 9,770 9,770
Blackwater Inc.Date Explanation PR Debit Credit Balanc
e2011
July 7 P3 1,050 1,0508 G3 150 900
Poppe’s SupplyDate Explanation PR Debit Credit Balanc
e2011
July 9 P3 37,710 37,71020
P3 750 38,460
Sprague CompanyDate Explanation PR Debit Credit Balanc
e2011
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.815 Fundamental Accounting Principles, Twelfth Canadian Edition
July 17
P3 8,200 8,200
24
G3 2,400 5,800
27
CD3
5,800 0
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 816
*Problem 8-8B (concluded)Part 5
ELDRIDGE INDUSTRIESTrial BalanceJuly 31, 2011
Account Debit CreditCash................................................ $279,3
00Accounts receivable......................... 43,840Merchandise inventory..................... 167,00
0Office supplies................................. 750Store supplies.................................. 900Store equipment.............................. 37,710Accounts payable............................. $
49,130Long-term notes payable.................. 187,00
0Gene Eldridge, capital...................... 95,000Sales............................................... 282,58
0Sales discounts................................ 767Purchases........................................ 24,270Purchase discounts.......................... 242Purchase returns and allowances...... 2,400Sales salaries expense..................... 61,240Advertising expense......................... 5
75
Totals.............................................. $616,352
$616,352
ELDRIDGE INDUSTRIESSchedule of Accounts Receivable
July 31, 2011
Kelly Grody...................................... $15,750Paul Kane......................................... 28,090 Total accounts receivable.................. $43,840
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.817 Fundamental Accounting Principles, Twelfth Canadian Edition
ELDRIDGE INDUSTRIESSchedule of Accounts Payable
July 31, 2011
Beech Company................................ $ 9,770Blackwater Inc. ............................... 900Poppe’s Supply................................ 38,460 Total accounts payable..................... $49,130
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 818
*Problem 8-9B - Perpetual (100 minutes) Part 4SALES JOURNAL Page 2
Accts. PST GST COGS Invoic
eRec. Payab
lePayab
leSales Dr./
Date Account Debited Number
PR Debit Credit Credit Credit MI Cr.
2011Nov.
8 Leroy Holmes 439 7,366.00
635.00
381.00
6,350.00
4,445.00
10
Sam Spear 440 14,500.00
1,250.00
750.00
12,500.00
8,750.00
15
Marjorie Cook 441 4,930.00
425.00
255.00
4,250.00
2,975.00
22
Sam Spear 442 3,010.20
259.50
155.70
2,595.00
1,800.00
24
Marjorie Cook 443 3,758. 40
324.0
0
194. 40
3,240 .00
2,260 .00
31
Totals 33,564.60
2,893.50
1,736.10
28,935.00
20,230.00
(106) (224) (225) (413) (502/119)
CASH RECEIPTS JOURNAL Page 3Sales Accts. Other PST GST COGS
Account Cash Disc. Rec. Sales Accts Payable
Payable
Dr./
Date Credited Explanation
PR Debit Debit Credit Credit Credit Credit Credit MI Cr.
2011
Copyright © 2007 by M
cGraw
-Hill Ryerson Lim
ited. All rights reserved.746
Fundamental Accounting Principles, Tw
elfth Canadian Edition
Nov.
2 L.T. Notes Pay
Note to bank
251
86,250.00
86,250.00
15
Sales Cash sales 31,517.20
27,170.00
2,717.00
1,630.20
19,000.00
18
Leroy Holmes
Invoice, Nov 8
7,239.00
127.00
7,366.00
19
Sam Spear Invoice, Nov 10
14,250.00
250.00
14,500.00
25
Marjorie Cook
Invoice, Nov 15
4,845.00
85.00
4,930.00
30
Sales Cash sales 41,415 .48
35,703.00
3,570.30
2,142.18
25,000.00
30
Totals 185,516.68
462.00
26,796.00
62,873.00
86,250.00
6,287.30
3,772.38
44,000.00
(101) (415) (106) (413) (X) (224) (225) (502/119)
*Problem 8-9B - Perpetual (continued)
PURCHASES JOURNAL Page 2Accts. Merchan
diseOther GST
Date of
Payable
Inventory
Accounts
Rec’ble
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011Nov.
1 Jett Supply/Office Equip.
Nov 1 n/10 EOM
163/
5,365.72
5,062.00
303.72
4 Defore Industries Nov 3 2/10, n/30
12,084.00
11,400.00
684.00
5 Atlas Company/Store Supplies
Nov 5 n/10 EOM
125/
1,081.20
1,020.00
61.20
11 The Welch Company Nov 10
2/10, n/30
3,060.22
2,887.00 173.22
16 Atlas Company/Office Supplies
Nov 16
n/10 EOM
124/
592 .54
559 . 00
33 .54
30 Totals 22,183 .68
14,287 .0 0
6,641 . 00
1,255.68
(201) (119) (X) (108)
CASH DISBURSEMENTS JOURNAL Page 3Merch. Other GST Accts.
Ch. Cash Inventory
Accts. Rec’ble
Payable
Date No. Payee Account Debited PR Credit Credit Debit Debit Debit2011
No 1 633 Defore Defore 11,856 228.00 12,084
Copyright © 2007 by M
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-Hill Ryerson Lim
ited. All rights reserved.Solutions M
anual for Chapter 8747
v. 2 Industries Industries .00 .0015
634 Payroll Sales Salaries Expense
621 8,435.00
8,435.00
19
635 The Welch Co.*
The Welch Company
2,496.00
48.00 2,544.00
30
636 Payroll Sales Salaries Expense
621 8,435.
00
8,435. 00
30
Totals 31,222.00
276.00 16,870.00
14,628.00
(101) (119) (X) (201)*2,887 – 487 = 2,400; 2,400 x 2% = 48 discount
Copyright © 2002 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 822
*Problem 8-9B - Perpetual (continued)GENERAL JOURNAL Page
2Date Account Titles and Explanations PR Debit
Credit2011
Nov.
17
Accounts Payable—The Welch Company.................................
201/
516.22
GST Payable....................... 225 29.22
Merchandise Inventory ....... 119 487.00
Returned merchandise.
26
Accounts Payable—Jett Supply. . 201/
977.32
Office Equipment................ 163 922.00
GST Payable....................... 225 55.32
Returned office equipment.
ACCOUNTS RECEIVABLE SUBLEDGER
Marjorie CookDate Explanation PR Debit Credit Balanc
e2011
Nov.
15 S2 4,930.50
4,930.50
24 S2 3,758.40
8,688.40
25 CR2
4,930.00
3,758.40
Leroy HolmesDate Explanation PR Debit Credit Balanc
e2011
Nov.
8 S2 7,366.00
7,366.00
18 CR2
7,366.00
0.00
Sam Spear
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.823 Fundamental Accounting Principles, Twelfth Canadian Edition
Date Explanation PR Debit Credit Balance
2011Nov.
10 S2 14,500.00
14,500.00
19 CR2
14,500.00
0.00
22 S2 3,010.20
3,010.20
Parts 3 and 4ACCOUNTS PAYABLE SUBLEDGER
Atlas CompanyDate Explanation PR Debit Credit Balanc
e2011
Nov.
5 P2 1,081.20
1,081.20
16 P2 592.54 1,673.74
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 824
*Problem 8-9B - Perpetual (continued)Defore Industries
Date Explanation PR Debit Credit Balance
2011Nov.
4 P2 12,084.00
12,084.00
12 CD2
12,084.00
0.00
Jett SupplyDate Explanation PR Debit Credit Balanc
e2011
Nov.
1 P2 5,365.72
5,365.72
26 G2 977.32 4,388.40
The Welch CompanyDate Explanation PR Debit Credit Balanc
e2011
Nov.
11 P2 3,060.22
3,060.22
17 G2 516.22 2,544.00
19 CD2
2,544.00
0.00
Parts 1 and 4
GENERAL LEDGERCash Acct. No.
101Date Explanation PR Debit Credit Balanc
e2011
Nov.
30 CR2
185,516.68
185,516.68
30 CD2
31,222.00
154,294.68
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.825 Fundamental Accounting Principles, Twelfth Canadian Edition
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011Nov.
30 S2 33,564.60
33,564.60
30 CR2
26,796.00
6,768.60
GST Receivable Acct. No. 108
Date Explanation PR Debit Credit Balance
2011Nov.
30 P2 1,255.68
1,255.68
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 826
*Problem 8-9B - Perpetual (continued)Merchandise Inventory Acct. No.
119Date Explanation PR Debit Credit Balanc
e2011
Oct.
31 210,000.00
Nov.
17 G2 487.00 209,513.00
30 S2 20,230.00
189,283.00
30 CR3
44,000.00
145,283.00
30 P2 14,287.00
159,570.00
30 CD3
276.00 159,294.00
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
2011Nov.
30 P2 559.00 559.00
Store Supplies Acct. No. 125
Date Explanation PR Debit Credit Balance
2011Nov.
5 P2 1,020.00
1,020.00
Office Equipment Acct. No. 163
Date Explanation PR Debit Credit Balance
2011Nov.
1 P2 5,062.00
5,062.00
26 G2 922.00 4,140.00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.827 Fundamental Accounting Principles, Twelfth Canadian Edition
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
2011Nov.
17 G2 516.22 (516.22)
26 G2 977.32 (1,493.54)
30 P2 22,183.68
20,690.14
30 CD2
14,628.00
6,062.14
PST Payable Acct. No. 224
Date Explanation PR Debit Credit Balance
2011Nov.
30 S2 2,893.50
2,893.50
30 CR2
6,287.30
9,180.80
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 828
*Problem 8-9B - Perpetual (continued)
GST Payable Acct. No. 225
Date Explanation PR Debit Credit Balance
2011Nov.
17 G2 29.22 29.22
26 G2 55.32 84.5430 S2 1,736.
101,820.6
430 CR
23,772.
385,593.0
2
Long-Term Notes Payable Acct. No. 251
Date Explanation PR Debit Credit Balance
2011Nov.
2 CR2
86,250.00
86,250.00
Asha Crystal, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
2011Oct.
31 210,000.00
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
2011Nov.
30 S2 28,935.00
28,935.00
30 CR2
62,873.00
91,808.00
Sales Discounts Acct. No. 415
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.829 Fundamental Accounting Principles, Twelfth Canadian Edition
Date Explanation PR Debit Credit Balance
2011Nov.
30 CR2
462.00 462.00
Cost of Goods Sold Acct. No. 502
Date Explanation PR Debit Credit Balance
2011Nov.
30 S2 20,230.00
20,230.00
30 CR3
44,000.00
64,230.00
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit Balance
2011Nov.
15 CD2
8,435.00
8,435.00
30 CD2
8,435.00
16,870.00
*Problem 8-9B - Perpetual (concluded)Part 5
CRYSTAL COMPANYTrial Balance
November 30, 2011Account Debit Credit
Cash............................................$154,294.68Accounts receivable...................... 6,768.60GST receivable............................. 1,255.68Merchandise inventory..................159,294.00Office supplies.............................. 559.00Store supplies.............................. 1,020.00Office equipment.......................... 4,140.00Accounts payable......................... $ 6,062.14PST payable................................. 9,180.80GST payable................................. 5,593.02
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 830
Long-term notes payable...................................................86,250.00Asha Crystal, capital........................................................210,000.00Sales.................................................................................91,808.00Sales discounts............................ 462.00Cost of goods sold........................64,230.00Sales salaries expense.................. 16,870.00 Totals..........................................$408,893.96.................................$408,893.96
CRYSTAL COMPANYSchedule of Accounts Receivable
November 30, 2011Marjorie Cook.................$3,758.40Sam Spear...................... 3,010.20Total accounts receivable $6,768.60
CRYSTAL COMPANYSchedule of Accounts Payable
November 30, 2011Atlas Company................$1,673.74Jett Supply...................... 4,388.40Total accounts payable....$6,062.14
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.831 Fundamental Accounting Principles, Twelfth Canadian Edition
*Problem 8-9B - Periodic (100 minutes)Part 4 SALES JOURNAL Page 2
Accts. PST GSTInvoic
eRec. Payab
lePayab
leSales
Date Account Debited Number
PR Debit Credit Credit Credit
2011Nov.
8 Leroy Holmes 439 7,366.00
635.00
381.00
6,350.00
10
Sam Spear 440 14,500.00
1,250.00
750.00
12,500.00
15
Marjorie Cook 441 4,930.00
425.00
255.00
4,250.00
22
Sam Spear 442 3,010.20
259.50
155.70
2,595.00
24
Marjorie Cook 443 3,758 .40
324.0
0
194. 40
3,240 .00
31
Totals 33,564.60
2,893.50
1,736.10
28,935.00
(106) (224) (225) (413)
CASH RECEIPTS JOURNAL Page 3Sales Accts. Other PST GST
Account Cash Discount
Rec. Sales Accts Payable
Payable
Date Credited Explanation
PR
Debit Debit Credit Credit Credit Credit Credit
2011No 2 L.T. Notes Note to 25 86,250. 86,250
Copyright © 2007 by M
cGraw
-Hill Ryerson Lim
ited. All rights reserved.Solutions M
anual for Chapter 8753
v. Pay bank 1 00 .0015
Sales Cash sales 31,517.20
27,170.00
2,717.00
1,630.20
18
Leroy Holmes
Invoice, Nov 8
7,239.00
127.00
7,366.00
19
Sam Spear Invoice, Nov 10
14,250.00
250.00
14,500.00
25
Marjorie Cook
Invoice, Nov 15
4,845.00
85.00 4,930.00
30
Sales Cash sales 41,415.48
35,703.00
3,570.30
2,142.18
30
Totals 185,516.68
462.00
26,796.00
62,873.00
86,250.00
6,287.30
3,772.38
(101) (415) (106) (413) (X) (224) (225)
*Problem 8-9B - Periodic (continued)
PURCHASES JOURNAL Page 2Accts. Other GST
Date of
Payable
Purchases
Accounts
Rec’ble
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011Nov.
1 Jett Supply/Office Equip.
Nov 1 n/10 EOM
163/
5,365.72
5,062.00
303.72
4 Defore Industries Nov 3 2/10, n/30
12,084.00
11,400.00
684.00
5 Atlas Company/Store Supplies
Nov 5 n/10 EOM
125/
1,081.20
1,020.00
61.20
11 The Welch Company Nov 10
2/10, n/30
3,060.22
2,887.00
173.22
16 Atlas Company/Office Supplies
Nov 16
n/10 EOM
124/
592 .54
559 . 00
33 .54
30 Totals 22,183 .68
14,287 . 00
6,641 . 00
1,255.68
(201) (505) (X) (108)
CASH DISBURSEMENTS JOURNAL Page 3Pur. Other GST Accts.
Ch. Cash Disc. Accts. Rec’ble
Payable
Date No. Payee Account Debited PR Credit Credit
Debit Debit Debit
2011No 1 633 Defore Defore 11,856 228. 12,084
Copyright © 2007 by M
cGraw
-Hill Ryerson Lim
ited. All rights reserved.754
Fundamental Accounting Principles, Tw
elfth Canadian Edition
v. 2 Industries Industries .00 00 .0015
634 Payroll Sales Salaries Expense
621 8,435.00
8,435.00
19
635 The Welch Co.
The Welch Company
2,496.00
48.00
2,544.00
30
636 Payroll Sales Salaries Expense
621 8,435.
00
8,435. 00
30
Totals 31,222.00
276.00
16,870.00
14,628.00
(101) (507)
(X) (201)
*Problem 8-9B - Periodic (continued) GENERAL JOURNAL Page
2Date Account Titles and Explanations PR Debit
Credit2011
Nov.
17
Accounts Payable—The Welch Company.................................
201/
516.22
GST Payable....................... 225 29.22
Purchases Returns and Allowances ..............................
506 487.00
Returned merchandise.
26
Accounts Payable—Jett Supply. . 201/
977.32
Office Equipment................ 163 922.00
GST Payable....................... 225 55.32
Returned office equipment.
Parts 2 and 4
ACCOUNTS RECEIVABLE SUBLEDGER
Marjorie CookDate Explanation PR Debit Credit Balanc
e2011
Nov.
15 S2 4,930.00
4,930.00
24 S2 3,758.40
8,688.40
25 CR3
4,930.00
3,758.40
Leroy HolmesDate Explanation PR Debit Credit Balanc
e2011
Nov.
8 S2 7,366.00
7,366.00
18 CR 7,366. 0.00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 836
3 00
Sam SpearDate Explanation PR Debit Credit Balanc
e2011
Nov.
10 S2 14,500.00
14,500.00
19 CR3
14,500.00
0.00
22 S2 3,010.20
3,010.20
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.837 Fundamental Accounting Principles, Twelfth Canadian Edition
*Problem 8-9B - Periodic (continued) Parts 3 and 4
ACCOUNTS PAYABLE SUBLEDGER
Atlas CompanyDate Explanation PR Debit Credit Balanc
e2011
Nov.
5 P2 1,081.20
1,081.20
16 P2 592.54 1,673.74
Defore IndustriesDate Explanation PR Debit Credit Balanc
e2011
Nov.
4 P2 12,084.00
12,084.00
12 CD3
12,084.00
0.00
Jett SupplyDate Explanation PR Debit Credit Balanc
e2011
Nov.
1 P2 5,365.72
5,365.72
26 G2 977.32 4,388.40
The Welch CompanyDate Explanation PR Debit Credit Balanc
e2011
Nov.
11 P2 3,060.22
3,060.22
17 G2 516.22 2,544.00
19 CD3
2,544.00
0.00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 838
*Problem 8-9B - Periodic (continued) Parts 1 and 4
GENERAL LEDGERCash Acct. No.
101Date Explanation PR Debit Credit Balanc
e2011
Nov.
30 CR3
185,516.68
185,516.68
30 CD3
31,222.00
154,294.68
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011Nov.
30 S2 33,564.60
33,564.60
30 CR3
26,796.00
6,768.60
GST Receivable Acct. No. 108
Date Explanation PR Debit Credit Balance
2011Nov.
30 P2 1,255.68
1,255.68
Merchandise Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
2011Oct.
31 Beginning balance 210,000.00
Office Supplies Acct. No. 124
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.839 Fundamental Accounting Principles, Twelfth Canadian Edition
Date Explanation PR Debit Credit Balance
2011Nov.
30 P2 559.00 559.00
Store Supplies Acct. No. 125
Date Explanation PR Debit Credit Balance
2011Nov.
5 P2 1,020.00
1,020.00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 840
*Problem 8-9B - Periodic (continued)Office Equipment Acct. No.
163Date Explanation PR Debit Credit Balanc
e2011
Nov.
1 P2 5,062.00
5,062.00
26 G2 922.00 4,140.00
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
2011Nov.
17 G2 516.22 (516.22)
26 G2 977.32 (1,493.54)
30 P2 22,183.68
20,690.14
30 CD3
14,628.00
6,062.14
PST Payable Acct. No. 224
Date Explanation PR Debit Credit Balance
2011Nov.
30 S2 2,893.50
2,893.50
30 CR3
6,287.30
9,180.80
GST Payable Acct. No. 225
Date Explanation PR Debit Credit Balance
2011Nov.
17 G2 29.22 29.22
26 G2 55.32 84.5430 S2 1,736.
101,820.6
4
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.841 Fundamental Accounting Principles, Twelfth Canadian Edition
30 CR3
3,772.38
5,593.02
Long-Term Notes Payable Acct. No. 251
Date Explanation PR Debit Credit Balance
2011Nov.
2 CR3
86,250.00
86,250.00
Asha Crystal, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
2011Oct.
31 Beginning balance 210,000.00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 842
*Problem 8-9B - Periodic (continued)Sales Acct. No.
413Date Explanation PR Debit Credit Balanc
e2011
Nov.
30 S2 28,935.00
28,935.00
30 CR3
62,873.00
91,808.00
Sales Discounts Acct. No. 415
Date Explanation PR Debit Credit Balance
2011Nov.
30 CR3
462.00 462.00
Purchases Acct. No. 505
Date Explanation PR Debit Credit Balance
2011Nov.
30 P2 14,287.00
14,287.00
Purchases Returns and Allowances Acct. No. 506
Date Explanation PR Debit Credit Balance
2011Nov.
17 G2 487.00 487.00
Purchases Discounts Acct. No. 507
Date Explanation PR Debit Credit Balance
2011Nov.
30 CD3
276.00 276.00
Sales Salaries Expense Acct. No. 621
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.843 Fundamental Accounting Principles, Twelfth Canadian Edition
Date Explanation PR Debit Credit Balance
2011Nov.
15 CD3
8,435.00
8,435.00
30 CD3
8,435.00
16,870.00
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 844
*Problem 8-9B - Periodic (concluded)Part 5
CRYSTAL COMPANYTrial Balance
November 30, 2011Account Debit Credit
Cash............................................$154,294.68Accounts receivable...................... 6,768.60GST receivable............................. 1,255.68Merchandise inventory..................210,000.00Office supplies.............................. 559.00Store supplies.............................. 1,020.00Office equipment.......................... 4,140.00Accounts payable......................... $ 6,062.14PST Payable................................. 9,180.80GST Payable................................. 5,593.02Long-term notes payable...................................................86,250.00Asha Crystal, capital........................................................210,000.00Sales.................................................................................91,808.00Sales discounts............................ 462.00Purchases....................................14,287.00Purchases returns and allowances. 487.00Purchases discounts..................... 276.00Sales salaries expense.................. 16,870.00 Totals..........................................$409,656.96.................................$409,656.96
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.845 Fundamental Accounting Principles, Twelfth Canadian Edition
CRYSTAL COMPANYSchedule of Accounts Receivable
November 30, 2011Marjorie Cook.................$3,758.40Sam Spear...................... 3,010.20Total accounts receivable $6,768.60
CRYSTAL COMPANYSchedule of Accounts Payable
November 30, 2011Atlas Company................$1,673.74Jett Supply...................... 4,388.40Total accounts payable....$6,062.14
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 846
*Problem 8-10B (30 minutes)Sales Journal Page X
Date Account Debited
Invoice No.
PR A/R Dr
PST Payable
CR
GST Payable
CRSales Cr
COGS DRMerchandise Inventory CR
2011May 3 Ajax
Holdings361 6,84
0480 360 6,000 3,200
30 Allendale Arena
363 4,218
296 222 3,700 1,900
Cash Receipts Journal
Page X
Date
Account Credited
Explanation
PRCash DR
Sales DiscDr
A/R CR
Sales CR
Other Accounts CR
PST Payable CR
GST Payable CR
COGS/DR Merchandis
e Inventory/C
R201
1May
1John Trenton, Capital
9,000 9,000
12 A/R – Ajax 6,780 60 6,840
13 Sales Inv #362 2,052 1,800
144 108 1,100
15 Bank Loan Payable
5,000 5,000
Purchases Journal Page X
Date Account Credited Terms PR A/P CR
Merchandise
Inventory
Other Accounts
DR
GST Rec’ble
DR
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DR2011May 7 Moore
Corporation/Off. Supplies
n/30 3,392 3,200 192
16 London Company 1/15,n/30
7,632 7,200 432
Cash Disbursements Journal
Page X
Date Ch #
Account Debited PR Cash CRMerchand
iseInventory
CR
Other Accounts
DR
GST Rec’ble
DRA/P DR
2011May 5 83 Merchandise
Inventory1,696 1,600 96
30 84 A/P – Moore Corporation
3,392 3,392
*Problem 8-11B (30 minutes)SALES JOURNAL Page X
Accts. PST GSTInvoice Rec. Payable Payable Sales
Date
Account Debited Number PR Debit Credit Credit Credit
2011
May 3 Ajax Holdings 361 6,840 480 360 6,00030 Allendale Arena 363 4,218 296 222 3,700
CASH RECEIPTS JOURNAL Page XSales Accts. Other PST GST
Cash Discount
Rec. Sales Accts. Payable Payable
Date Account Credited
Explanation
PR Debit Debit Credit Credit Credit Credit Credit
2011May
1John Trenton, Capital
9,000 9,000
12 A/R – Ajax 6,780 60 6,84013 Sales Inv #362 2,052 1,800 144 10815 Bank Loan
Payable5,000 5,000
PURCHASES JOURNAL Page XAccts. Other GST
Date of
Payable Purchases
Accounts Rec’ble
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011
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elfth Canadian Edition
May 7 Moore Corporation/Off. Supplies
May 7 N/30 3,392 3,200 192
16 London Company May 16
1/15,n/30
7,632 7,200 432
CASH DISBURSEMENTS JOURNAL PageXCh.
Cash Pur. Disc.
Other Accts.
GST Rec’ble
Accts. Payable
Date No.
Payee Account Debited
PR Credit Credit Debit Debit Debit
2011May
583 Merchandise
InventoryPurchases 1,696 1,600 96
30 84 A/P – Moore Corporation
Lexor Suppliers
3,424 3,424
ANALYTICAL & REVIEW PROBLEMSA&R Problem 8-1
Sales Journal Page 1
DateAccount Debited
Invoice No. PR
A/R Dr.Sales
Cr. PR
COGS Dr.Merchandise Inventory Cr.
2011Oct.
9Kitchen Club
210 1,125.00
465.75
18 Thorhild Co-op
211 2,250.00
1,090.50
24 Boyle Grocery
212 750.00 353.00
Purchases Journal Page 1
DateAccount Credited
Date of
Invoice Terms
PR
A/P CR
PR
Merchandise
Inventory
DR
Office Suppl
ies Dr.
Other Accounts DR
2011Oct.
3Arnold Brothers
Oct. 3
2/10, n/30
750.00
750.00
15 Arnold Brothers
Oct. 15
2/10, n/30
1,550.00
1,550.00
31 Arnold Brothers
Oct. 31
2/10, n/30
600.00
600.00
Cash Disbursements Journal Page 1
DateCh # Payee Account
DebitedPR Cash
Cr.PR
Merchandise
Inventor
Other Accounts
Dr.A/P Dr.
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y Cr.2011
Oct. 19
101
Arnold Brothers
A/P – Arnold Brothers
600.00 600.00
23 102
Arnold Brothers
A/P – Arnold Brothers
1,519.00
31.00 1,550.00
NOTE: An additional PR column has been added to the Sales and Purchases Journals to facilitate the referencing of inventory entries into the inventory subledger.
A&R Problem 8-1 (concluded)General Journal Page: G
1Date Account Titles and
ExplanationsPR
Debit Credit
2011Oct.
4 Accounts Payable – Arnold Brothers............................
150.00
Merchandise Inventory. . 150.00
To record the return of 20 units.
Inventory Subledger Record — Weighted-Average PerpetualInventory Balance
Date
PR Purchases Sales (at cost) (a) (b) (a)
(b)
Units
Unit Cost
Total Cost
Units
Unit Cost
Total Cost
Total
Units
Average
Cost/Unit
Total Cost
Inventory Balance Calculations
Oct. 1
Beginning inventory
85 @ $5.00
= $ 25.00
85 $5.00
$ 425.00
85 $ 425.00
3 P1 100 @ $7.50
= $ 50.00
10 0
@ 7.50
= 75 0.00
185 $6.35
$ 1,175.00
185 $ 1,175.0
0185 $
1,175.00
4 G1 –20 @ $7.50
= –$ 150.00
– 20
@ 7.50
= – 150.00
165 $6.21
$ 1,025.00
165 $ 1,025.0
0165 $
1,025.00
9 S1 75 @ $6.21
= $ 465.75
– 75
@ 6.21
= – 465.75
90 $6.21
$ 559.25
90 $ 559.25
90 $ 559.25
15 P1 200 @ $7.75
= $ 1,550.00
2 00
@ 7.75
= 1,55 0.00
290 $7.27
$ 2,109.25
290 $ 2,109.2
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5290 $
2,109.25
18 S1 150
@ $7.27
= $ 1,090.5
0
–150
@ 7.27
= – 1,090.5
0140 $7.2
8$
1,018.75140 $
1,018.75
140 $ 1,018.7
523 G1 –$
31.00
0 – 31.00
140 $7.06
$ 987.75
140 $ 987.75
140 $ 987.75
24 S1 50 @ $7.06
= $ 353.00
– 50
@ 7.06
= – 353.00
90 $7.06
$ 634.75
90 $ 634.75
90 $ 634.75
31 P1 75 @ $8.00
= $ 600.00
7 5
@ 8.00
= 600 .00
165 $7.48
$ 1,234.75
165 $ 1,234.7
5Total 440 $3,144.0
0275
$1,909.25
165 $1,234.75
Cost of goods available for sale =
Cost of goods sold +
Ending inventory
Note: An additional PR column has been added to the Inventory Subledger Record to facilitate referencing of inventory entries.
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 854
Ethics Challenge
EC 8–1
1. Independence in fact means that the auditor maintains an objective point of view of the client. Independence in appearance means that a third party viewing the relationship between the auditor/client would have no reason to believe that the auditor is not independent of the client.
2. While auditors are hired by their clients to perform audits, auditors also have a responsibility to the public. In our society auditors provide credibility to financial reporting situations by offering professional audit opinions about companies’ financial statements. While it is sometimes difficult to be responsible to clients as well as the public, auditors must maintain their independence to keep the public trust.
3. Since John Harris is a sole practitioner it is questionable whether he can consult on the client’s accounting system and then remain objective in subsequent years when he performs the audit of the company. Large firms often separate consulting and auditing engagements for the same client by having staff stationed in two different geographic branches of the firm do the work. Or a large local firm might be able to perform consulting and auditing for the same client by assigning different personnel to the two jobs. In this scenario John would need to do both jobs himself, making it difficult to maintain independence in fact and appearance.
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.855 Fundamental Accounting Principles, Twelfth Canadian Edition
Focus on Financial Statements
FFS 8-1
Single-step income statement:
MANGO DESIGNSIncome Statement
For Month Ended June 30, 2011
Revenues:Net sales ................................$211,404
Expenses:Cost of goods sold ................... $134,750Sales salaries expense ............. 42,000Office supplies expense ........... 13,400Advertising expense................. 600Amortization expense, store equipment 500Interest expense ..................... 200Total expenses......................... 191,450
Net income.................................. $ 19,954
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FFS 8-1 (concluded)
MANGO DESIGNSStatement of Owner’s Equity
For Month Ended June 30, 2011Tom Mandalay, capital, June 1 $ -0-Add: Owner investment 75,000 Net income ........ 19,954 Tom Mandalay, capital, June 30$94,954
MANGO DESIGNSBalance SheetJune 30, 2011
Assets Current assets: Cash.............................................. $156,304
Accounts receivable....................... 64,000Merchandise inventory................... 36,750Office supplies .............................. 4,600Total current assets ......................$261,654
Property, plant and equipment:Store equipment............................ $32,000
Less: Accumulated amortization . 500 31,500
Total assets......................................$293,154
Liabilities Current liabilities:
Accounts payable .......................... $148,000Interest payable............................ 200Total current liabilities................... $148,200
Long-term liabilities:Notes payable............................... 50,000
Total liabilities.....................................$198,200Owner’s Equity Tom Mandalay, capital .................. 94,954Total liabilities and owner’s equity... .
$293,154
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Analysis Component
Mango Designs operates under a perpetual inventory system because the special journals include the Cost of Goods Sold account.
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 858
FFS 8-2Danier Leather’s June 25, 2005, balance sheet includes Accounts receivable of $594 (thousand), about 0.7% of total assets (calculated as $594/$83,365 x 100). Although these accounts receivable are not significant in total, they represent amounts owed by various customers to Danier so it would help decision makers better monitor collection if the details of individual balances owed, by whom, and dates due were maintained in an accounts receivable subledger.
The same logic would apply regarding the June 25, 2005, Accounts payable and accrued liabilities balance of $8,170 (thousand), about 10% of total assets (calculated as $8,170/$83,365 x 100). Since these accounts payable are significant in total and represent amounts owed to various creditors, it would help decision makers better manage payments if the details of individual balances owed, by whom, credit terms, and dates due were maintained in an accounts payable subledger.
The June 25, 2005, balance sheet shows inventories of $29,031 (thousand), about 34.82% of total assets (calculated as $29,031/$83,365 x 100). Because Danier sells clothing and accessories, the inventory balance is significant and represents a large variety of items. It would help decision makers better manage inventory if the details of unit costs, units sold, units purchased, and units on hand along with any returns and/or allowances were detailed in an inventory subledger.
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.859 Fundamental Accounting Principles, Twelfth Canadian Edition
Critical Thinking QuestionCT 8-1Note to instructor: Student responses will vary therefore the answer here is only suggested and not inclusive of all possibilities; it is presented in point form for brevity.
Problem(s):— Detailed information regarding mining assets is required
but is not readily available given the current accounting information system
Goal(s)*:— To ensure the accounting information system is
maintained in such a way that reasonable internal requests for information can be fulfilled efficiently and effectively
Assumption(s)/Principle(s):— That the computer system in place at Northern Outposts
can accommodate special purpose reports— The disclosure principle requires that anything of
significance be reportedFacts:
— as presented
Conclusion(s)/Consequence(s):— Internal/external reporting requirements need to be identified
and matched against what is currently being provided by the accounting information system … gaps need to be identified and resolved to ensure that decisions dependent on such reports can be done efficiently and effectively
*The goal is highly dependent on “perspective.”
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 860
COMPREHENSIVE PROBLEMSComprehensive Problem 8.1—Alpine Company (150 minutes)
SALES JOURNAL Page 2Invoic
eA/R Dr. COGS Dr.
Date Account Debited Number
PR Sales Cr.
Merch. Inv. Cr
2011May
2 Essex Company 8785 6,100 3,660
16 Essex Company 8786 3,990 2,39422 Oscar Services 8787 6,850 4,11026 Deaver Corp. 8788 14,
210 8,52
631 Totals 31,
150 18,69
0(106/413)
(502/119)
CASH RECEIPTS JOURNAL Page 2Sales Accts. Othe
rCOGS
Dr.Account Cash Disc. Rec. Sales Accts
.Merch.
Inv.Date Credited Explanation PR Debit Debit Credit Credit Credi
tCredit
2011May
5 Nabors, Inc.*
Sale of Apr. 28 4,459 91 4,550
9 Store Supplies
Sold store supplies
125
350 350
11
Essex Company
Sale of May 2 5,978 122 6,100
1 Sales Cash sales, 59,22 59,220 35,532
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elfth Canadian Edition
5 May 1-15 030
Oscar Services
Sale of May 22 6,713 137 6,850
31
Sales Cash sales, May 16-31
66,05
2
66,05 2
39,630
31
Totals 142,772
350 17,500
125,272
350 75,162
(101) (414) (106) (413) ( X ) (502/119)
*4,725 – 175 = 4,550; 4,550 x 2% = 91 discount
Comprehensive Problem 8.1—Alpine Company (continued)PURCHASES JOURNAL Page 2
Accounts
Merchandise
Office Other
Date of
Payable Inventory
Supplies
Accounts
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011May 4 Store Supp./Thompson
Supp.May 04
n/10 EOM
125/ 37,729 37,072 83 574
10 Off. Equip./Thompson Supp.
May 10
n/10 EOM
163/ 4,074 4,074
11 Gale, Inc. May 10
2/10, n/30
8,800 8,800
17 Chandler Corp. May 14
2/10, n/60
13,650 13,650
24 Store Supp./Thompson Supp.
May 24
n/10 EOM
125/ 9,030 8,120 280 630
25 Parkay Products May 23
2/10, n/30
3,080 3,080
31 Totals 76,363 70,722 363 5,278 (201) (119) (124
) (X)
CASH DISBURSEMENTS JOURNAL Page 2Merchan
diseOther Accts.
Ch. Cash Inventory Accts. PayableDate No. Payee Account Debited PR Credi
tCredit Debit Debit
2011May 1 341
0S&M Mgmt. Co.
Rent Expense, Selling Space
642 2,968
Rent Expense, Office 641 3,71 742
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Space 08 341
1Parkay Products
Parkay Products 6,174
126 6,300
15 3412
Payroll Sales Salaries Expense
621 5,320
Office Salaries Expense
620 8,470
3,150
19 3413
Gale, Inc. Gale, Inc. 8,624
176 8,800
23 3414
Chandler Corp.
Chandler Corp. 13,377
273 13,650
26 3415
Trinity Power
Utilities Expense 690 1,283
1,283
29 3416
Clint Barry C. Barry, Withdrawal
302 7,000
7,000
30 3417
Payroll Sales Salaries Expense
621 5,320
Office Salaries Expense
620 8,4 70
3,15 0
31 Totals 57,108
575 28,933
28,750
(101)
(119) ( X )
(201)
Comprehensive Problem 8.1—Alpine Company (continued)GENERAL JOURNAL Page 3
Date Account Titles and Explanations PR Debit Credit2011May 2 Sales Returns and Allowances... 415 175
Accounts Receivable—Nabors, Inc. 106/175
3 Accounts Payable—Parkay Products 201/798
Merchandise Inventory........ 119 798
12 Accounts Payable—Thompson Supply Co. 201/854
Office Equipment................. 163 854
Adjusting entries:
May31 Insurance Expense................... 637 553Prepaid Insurance................ 128 553
31 Store Supplies Expense............ 651 669Store Supplies..................... 125 669
31 Office Supplies Expense............ 650 289Office Supplies.................... 124 289
31 Amortization Expense, Store Equipment 613567
Accumulated Amort., Store Equipment 166567
31 Amortization Expense, Office Equipment 612329
Accumulated Amort., Office Equipment 164329
31 Cost of Goods Sold................... 502 4,577Merchandise Inventory........ 119 4,577
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Comprehensive Problem 8.1—Alpine Company (continued)Closing entries: Page 4
2011
May31 Sales..................................... 413156,422 Income Summary........... 901 156,422
31 Income Summary................... 901123,294Sales Discounts................. 414 350Sales Returns and Allowances 415
175Cost of Goods Sold............ 502 98,429Amort. Expense, Office Equipment 612
329Amort. Expense, Store Equipment 613
567Office Salaries Expense...... 620 6,300Sales Salaries Expense...... 621 10,640Insurance Expense............ 637 553Rent Expense, Office Space 641 742Rent Expense, Selling Space 642
2,968Office Supplies Expense..... 650 289Store Supplies Expense..... 651 669Utilities Expense............... 690 1,283
31 Income Summary................... 901 33,128Clint Barry, Capital............ 301 33,128
31 Clint Barry, Capital................. 301 7,000Clint Barry, Withdrawals.... 302 7,000
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Comprehensive Problem 8.1—Alpine Company (continued)GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 50,247
May
31 R2 142,772
193,019
31 CD2
57,108 135,911
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 4,725
May
2 G3 175 4,550
31 S2 31,150
35,700
31 CR2
17,500 18,200
Merchandise Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
2011Apr. 30 Balance 220,08
0May 3 G3 798 219,28
231 S2 18,690 200,59
231 P2 70,722 271,31
431 CR
275,162 196,15
231 CD 575 195,57
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2 731 G3 4,577 191,00
0
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 430
May
31 P2 363 793
31 G3 289 504
Store Supplies Acct. No. 125
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 2,447
May
4 P2 574 3,021
9 CR2
350 2,671
24 P2 630 3,30131 G3 669 2,632
Comprehensive Problem 8-1—Alpine Company (continued)Prepaid Insurance Acct. No.
128Date Explanation PR Debit Credit Balanc
e2011
Apr.
30 Balance 3,318
May
31 G3 553 2,765
Office Equipment Acct. No. 163
Date Explanation PR Debit Credit Balance
2011
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Apr.
30 Balance 22,470
May
10 P2 4,074 26,544
12 G3 854 25,690
Accumulated Amortization, Office Equipment Acct. No. 164
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 9,898
May
31 G3 329 10,227
Store Equipment Acct. No. 165
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 38,920
Accumulated Amortization, Store Equipment Acct. No. 166
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 17,556
May
31 G3 567 18,123
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 7,098
May
3 G3 798 6,300
12 G3 854 5,44631 P2 76,363 81,80931 CD 28,75 53,059
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2 0
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Comprehensive Problem 8.1—Alpine Company (continued)Clint Barry, Capital Acct. No.
301Date Explanation PR Debit Credit Balanc
e2011
Apr.
30 Balance 308,085
May
31 G4 33,128 341,213
31 G4 7,000 334,213
Clint Barry, Withdrawals Acct. No. 302
Date Explanation PR Debit Credit Balance
2011May
29 CD2
7,000 7,000
31 G4 7,000 0
Sales Acct. No. 413
Date Explanation PR Debit Credit Balance
2011May
31 S2 31,150 31,150
31 CR2
125,272
156,422
31 G4 156,422
0
Sales Discounts Acct. No. 414
Date Explanation PR Debit Credit Balance
2011May
31 CR2
350 350
31 G4 350 0
Sales Returns and Allowances Acct. No. 415
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Date Explanation PR Debit Credit Balance
2011May
2 G3 175 175
31 G4 175 0
Cost of Goods Sold Acct. No. 502
Date Explanation PR Debit Credit Balance
2011May 31 S2 18,690 18,690
31 CR2
75,162 93,852
31 G3 4,577 98,42931 G4 98,429 0
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Comprehensive Problem 8.1—Alpine Company (continued)Amortization Expense, Office Equipment Acct. No.
612Date Explanation PR Debit Credit Balanc
e2011
May
31 G3 329 329
31 G4 329 0
Amortization Expense, Store Equipment Acct. No. 613
Date Explanation PR Debit Credit Balance
2011May
31 G3 567 567
31 G4 567 0
Office Salaries Expense Acct. No. 620
Date Explanation PR Debit Credit Balance
2011May
15 CD2
3,150 3,150
30 CD2
3,150 6,300
31 G4 6,300 0
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit Balance
2011May
15 CD2
5,320 5,320
30 CD2
5,320 10,640
31 G4 10,640 0
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
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2011May
31 G3 553 553
31 G4 553 0
Rent Expense, Office Space Acct. No. 641
Date Explanation PR Debit Credit Balance
2011May
1 CD2
742 742
31 G4 742 0
Rent Expense, Selling Space Acct. No. 642
Date Explanation PR Debit Credit Balance
2011May
1 CD2
2,968 2,968
31 G4 2,968 0Comprehensive Problem 8.1—Alpine Company (continued)
Office Supplies Expense Acct. No. 650
Date Explanation PR Debit Credit Balance
2011May
31 G3 289 289
31 G4 289 0
Store Supplies Expense Acct. No. 651
Date Explanation PR Debit Credit Balance
2011May
31 G3 669 669
31 G4 669 0
Utilities Expense Acct. No. 690
Date Explanation PR Debit Credit Balance
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 874
2011May
26 CD2
1,283 1,283
31 G4 1,283 0
Income Summary Acct. No. 901
Date Explanation PR Debit Credit Balance
2011May
31 G4 156,422
156,422
31 G4 123,294
33,128
31 G4 33,128
0
ACCOUNTS RECEIVABLE SUBLEDGER
Deaver Corp.Date Explanation PR Debit Credit Balanc
e2011
May
26 S2 14,210
14,210
Essex CompanyDate Explanation PR Debit Credit Balanc
e2011
May
2 S2 6,100 6,100
11 CR2
6,100 0
16 S2 3,990 3,990
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.875 Fundamental Accounting Principles, Twelfth Canadian Edition
Comprehensive Problem 8.1—Alpine Company (continued)Nabors, Inc.
Date Explanation PR Debit Credit Balance
2011Apr.
28 S1 4,725 4,725
May
2 G3 175 4,550
5 CR2
4,550 0
Oscar ServicesDate Explanation PR Debit Credit Balanc
e2011
May
22 S2 6,850 6,850
30 CR2
6,850 0
ACCOUNTS PAYABLE SUBLEDGER
Chandler Corp.Date Explanation PR Debit Credit Balanc
e2011
May
17 P2 13,650 13,650
23 CD2
13,650
0
Gale, Inc.Date Explanation PR Debit Credit Balanc
e2011
May
11 P2 8,800 8,800
19 CD2
8,800 0
Parkay ProductsDate Explanation PR Debit Credit Balanc
e2011
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Apr.
29 P2 7,098 7,098
May
3 G3 798 6,300
8 CD2
6,300 0
25 P2 3,080 3,080
Thompson Supply Co.Date Explanation PR Debit Credit Balanc
e2011
May
4 P2 37,729 37,729
10 P2 4,074 41,80312 G3 854 40,94924 P2 9,030 49,979
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.877 Fundamental Accounting Principles, Twelfth Canadian Edition
Comprehensive Problem 8.1—Alpine Company (continued)
ALPINE COMPANYWork Sheet
For Month Ended May 31, 2011
Balance Sheet and
Income Statement of
Trial Balance
Adjustmen ts
Statement
Owner’s Equity
Debit Credit
Debit Credit
Debit Credit
Debit Credit
Cash........................... 135,911
135,911
Accounts receivable.... 18,200
18,200
Merchandise inventory 195,577
(f) 4,577
191,000
Office supplies............ 793 (c) 289
504
Store supplies............ 3,301 (b) 669
2,632
Prepaid insurance....... 3,318 (a) 553
2,765
Office equipment 25,690
25,690
Accumulated Amort., office equip.
9,898 (e) 329
10,227
Store equipment......... 38,920
38,920
Accumulated Amort., store equip.
17,556
(d) 567
18,123
Accounts payable....... 53,059
53,059
Clint Barry, Capital..... 308,085
308,085
Clint Barry, Withdrawals...............
7,000 7,000
Sales.......................... 156,422
156,422
Sales discounts........... 350 350Sales returns and 175 175
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 878
allowances.................Cost of goods sold...... 93,85
2(f) 4,577
98,429
Amort. expense, office equipment
(e) 329
329
Amort. expense, store equipment
(d) 567
567
Office salaries expense 6,300 6,300Sales salaries expense 10,64
010,64
0Insurance expense...... (a)
553553
Rent expense, office space.........................
742 742
Rent expense, selling space.........................
2,968 2,968
Office supplies expense ..................................
(c) 289
289
Store supplies expense (b) 669
669
Utilities expense......... 1,2 83
1,2 83
Totals...................... 545,020
545,020
6,984 6,984 123,294
156,422
422,622
389,494
Net income................. 33,1 28
33,1 28
Totals...................... 156,422
156,422
422,622
422,622
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.879 Fundamental Accounting Principles, Twelfth Canadian Edition
Comprehensive Problem 8.1—Alpine Company (continued)
ALPINE COMPANYIncome Statement
For Month Ended May 31, 2011
Revenue:Sales ......................................$156,422
Less:.............Sales discounts $ 350
Sales returns and allowances 175 525 Net sales ................................$155,897
Cost of goods sold....................... 98,429Gross profit on sales ................... $ 57,468Operating expenses:
Selling expenses:Sales salaries expense ......... $10,640Rent expense, selling space . 2,968Store supplies expense ........ 669Amortization expense, store equipment 567 Total selling expenses .......... $ 14,844
General and administrative expenses:Office salaries expense......... $6,300Utilities expense .................. 1,283Rent expense, office space . . . 742Insurance expense ............... 553Amortization expense, office equipment 329Office supplies expense ........ 289Total general and administrative expenses
9,496 Total operating expenses......... 24,340
Net income.................................. $ 33,128
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 880
Comprehensive Problem 8.1— Alpine Company (continued)
ALPINE COMPANYStatement of Owner’s Equity
For Month Ended May 31, 2011Clint Barry, Capital, April 30$308,085Add: Net income ........... 33,128 Total ............................$341,213Less: Withdrawals.......... 7,000 Clint Barry, Capital, May 31$334,213
ALPINE COMPANYBalance SheetMay 31, 2011
Assets Current assets: Cash.............................................. $135,911
Accounts receivable....................... 18,200Merchandise inventory................... 191,000Office supplies .............................. 504Store supplies .............................. 2,632Prepaid insurance ......................... 2,765 Total current assets ......................$351,012
Property, plant and equipment:Office equipment........................$25,690
Less: Accumulated amortization 10,227 $15,463Store equipment........................$38,920
Less: Accumulated amortization 18,123 20,797Total property, plant and equipment 36,260
Total assets......................................$387,272
Liabilities Current liabilities:
Accounts payable .......................... $ 53,059
Owner’s Equity Clint Barry, Capital ........................
334,213
Copyright © 2011 by McGraw-Hill Ryerson Limited. All rights reserved.881 Fundamental Accounting Principles, Eleventh Canadian Edition
Total liabilities and owner’s equity... .$387,272
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 882
Comprehensive Problem 8.1—Alpine Company (concluded)
ALPINE COMPANYPost-Closing Trial Balance
May 31, 2011Account Debit Credit
Cash............................................$135,911Accounts receivable...................... 18,200Merchandise inventory.................. 191,000Office supplies.............................. 504Store supplies.............................. 2,632Prepaid insurance......................... 2,765Office equipment.......................... 25,690Accumulated amortization, office equipment....................................................$ 10,227Store equipment........................... 38,920Accumulated amortization, store equipment .................................................... 18,123Accounts payable ......................... 53,059Clint Barry, Capital....................... ...................................... 334,213 Totals..........................................$415,622......................................$415,622
ALPINE COMPANYSchedule of Accounts Receivable
May 31, 2011
Deaver Corp...................... $14,210Essex Company ................ 3,990 Total accounts receivable. . $18,200
ALPINE COMPANYSchedule of Accounts Payable
May 31, 2011
Parkay Products ............... $ 3,080Thompson Supply Co. ....... 49,979 Total accounts payable ..... $53,059
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.883 Fundamental Accounting Principles, Twelfth Canadian Edition
*Comprehensive Problem 8.2—Alpine Company (150 minutes)SALES JOURNAL Page 2
Invoice
A/R Dr.
Date Account Debited Number
PR Sales Cr.
2011May
2 Essex Company 8785 6,100
16 Essex Company 8786 3,990
22 Oscar Services 8787 6,850
26 Deaver Corp. 8788 14, 210
31 31, 150
(106/413)
CASH RECEIPTS JOURNAL Page 2Sales Accts. Other
Account Cash Disc. Rec. Sales Accts.Date Credited Explanation PR Debit Debit Credit Credit Credit2011
May
5 Nabors, Inc.
Sale of Apr. 28 4,459 91 4,550
9 Store Supplies
Sold store supplies
125
350 350
11
Essex Company
Sale of May 2 5,978 122 6,100
15
Sales Cash sales, May 1-15
59,220
59,220
3 Oscar Sale of May 22 6,713 137 6,850
Copyright © 2007 by M
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-Hill Ryerson Lim
ited. All rights reserved.784
Fundamental Accounting Principles, Tw
elfth Canadian Edition
0 Services31
Sales Cash sales, May 16-31
66,05
2
66,05 2
31
Totals 142,772
350 17,500
125,272
350
(101) (414) (106) (413) ( X )
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.885 Fundamental Accounting Principles, Twelfth Canadian Edition
*Comprehensive Problem 8.2—Alpine Company (continued)
PURCHASES JOURNAL Page 2Account
sOffice Other
Date of
Payable Purchases
Supplies
Accounts
Date Account Credited Invoice
Terms PR Credit Debit Debit Debit
2011May
4 Store Supp./Thompson Supp.
May 04
n/10 eom
125/ 37,729 37,072 83 574
10 Off. Equip./Thompson Supp.
May 10
n/10 eom
163/ 4,074 4,074
11 Gale, Inc. May 10
2/10, n/30
8,800 8,800
17 Chandler Corp. May 14
2/10, n/60
13,650 13,650
24 Store Supp./Thompson Supp.
May 24
n/10 eom
125/ 9,030 8,120 280 630
25 Parkay Products May 23
2/10, n/30
3,080 3,080
31 Totals 76,363 70,722 363 5,278 (201
) (505) (12
4) (X)
CASH DISBURSEMENTS JOURNAL Page 2Purcha
seOther Accts.
Ch. Cash Discount
Accts. Payable
Date No. Payee Account Debited PR Credit Credit Debit Debit2011
Ma 1 341 S&M Mgmt. Rent Expense, 642 2,968
Copyright © 2007 by M
cGraw
-Hill Ryerson Lim
ited. All rights reserved.Solutions M
anual for Chapter 8785
y 0 Co. Selling SpaceRent Expense, Office Space
641 3,710 742
8 3411
Parkay Products
Parkay Products 6,174 126 6,300
15
3412
Payroll Sales Salaries Expense
621 5,320
Office Salaries Expense
620 8,470 3,150
19
3413
Gale, Inc. Gale, Inc. 8,624 176 8,800
23
3414
Chandler Corp.
Chandler Corp. 13,377
273 13,650
26
3415
Trinity Power
Utilities Expense 690 1,283 1,283
29
3416
Clint Barry C. Barry, Withdrawal
302 7,000 7,000
30
3417
Payroll Sales Salaries Expense
621 5,320
Office Salaries Expense
620 8,47 0
3,15 0
31
Totals 57,108
575 28,933
28,750
(101)
(119) ( X ) (201)
*Comprehensive Problem 8.2—Alpine Company (continued)GENERAL JOURNAL Page 3
Date Account Titles and Explanations PR Debit Credit2011May 2 Sales Returns and Allowances... 415 175
Accounts Receivable—Nabors, Inc. 106/175
3 Accounts Payable—Parkay Products 201/798
Purchase Returns and Allowances 507 798
12 Accounts Payable—Thompson Supply Co. 201/854
Office Equipment................. 163 854
Adjusting entries:
May31 Insurance Expense................... 637 553Prepaid Insurance................ 128 553
31 Store Supplies Expense............ 651 669Store Supplies..................... 125 669
31 Office Supplies Expense............ 650 289Office Supplies.................... 124 289
31 Amortization Expense, Store Equipment 613567
Accumulated Amort., Store Equipment 166567
31 Amortization Expense, Office Equipment 612329
Accumulated Amort., Office Equipment 164329
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 888
*Comprehensive Problem 8.2—Alpine Company (continued)Closing entries: Page 4
2011May31 Merchandise Inventory........... 119191,000
Sales..................................... 413156,422Purchase Discounts................ 506 575Purchase Returns and Allowances 507 798
Income Summary............... 901 348,795
31 Income Summary................... 901315,667Merchandise Inventory...... 119 220,080Sales Discounts................. 414 350Sales Returns and Allowances 415
175Purchases......................... 505 70,722Amort. Expense, Office Equipment 612
329Amort. Expense, Store Equipment 613
567Office Salaries Expense...... 620 6,300Sales Salaries Expense...... 621 10,640Insurance Expense............ 637 553Rent Expense, Office Space 641 742Rent Expense, Selling Space 642
2,968Office Supplies Expense..... 650 289Store Supplies Expense..... 651 669Utilities Expense............... 690 1,283
31 Income Summary................... 901 33,128Clint Barry, Capital............ 301 33,128
31 Clint Barry, Capital................. 301 7,000Clint Barry, Withdrawals.... 302 7,000
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.889 Fundamental Accounting Principles, Twelfth Canadian Edition
*Comprehensive Problem 8.2—Alpine Company (continued)GENERAL LEDGER
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 50,247
May
31 R2 142,772
193,019
31 CD2
57,108 135,911
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 4,725
May
2 G3 175 4,550
31 S2 31,150
35,700
31 CR2
17,500 18,200
Merchandise Inventory Acct. No. 119
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 220,080
May
31 G4 220,080
31 G4 191,000
191,000
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 890
2011Apr.
30 Balance 430
May
31 P2 363 793
31 G3 289 504
Store Supplies Acct. No. 125
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 2,447
May
4 P2 574 3,021
9 CR2
350 2,671
24 P2 630 3,30131 G3 669 2,632
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.891 Fundamental Accounting Principles, Twelfth Canadian Edition
*Comprehensive Problem 8.2—Alpine Company (continued)Prepaid Insurance Acct. No.
128Date Explanation PR Debit Credit Balanc
e2011
Apr.
30 Balance 3,318
May
31 G3 553 2,765
Office Equipment Acct. No. 163
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 22,470
May
10 P2 4,074 26,544
12 G3 854 25,690
Accumulated Amortization, Office Equipment Acct. No. 164
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 9,898
May
31 G3 329 10,227
Store Equipment Acct. No. 165
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 38,920
Accumulated Amortization, Store Equipment Acct. No. 166
Date Explanation PR Debit Credit Balance
2011
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 892
Apr.
30 Balance 17,556
May
31 G3 567 18,123
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 7,098
May
3 G3 798 6,300
12 G3 854 5,44631 P2 76,363 81,80931 CD
228,75
053,059
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.893 Fundamental Accounting Principles, Twelfth Canadian Edition
*Comprehensive Problem 8.2—Alpine Company (continued)Clint Barry, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
2011Apr.
30 Balance 308,085
May
31 G4 33,128 341,213
31 G4 7,000 334,213
Clint Barry, Withdrawals Acct. No. 302Date Explanation PR Debit Credit Balanc
e2011
May
29 CD2
7,000 7,000
31 G4 7,000 0
Sales Acct. No. 413Date Explanation PR Debit Credit Balanc
e2011
May
31 S2 31,150 31,150
31 CR2
125,272
156,422
31 G4 156,422
0
Sales Discounts Acct. No. 414Date Explanation PR Debit Credit Balanc
e2011
May
31 CR2
350 350
31 G4 350 0
Sales Returns and Allowances Acct. No. 415Date Explanation PR Debit Credit Balanc
e2011
May
2 G3 175 175
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 894
31 G4 175 0
Purchases Acct. No. 505Date Explanation PR Debit Credit Balanc
e2011
May 31 P2 70,722 70,72231 G4 70,722 0
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.895 Fundamental Accounting Principles, Twelfth Canadian Edition
*Comprehensive Problem 8.2—Alpine Company (continued)Purchase Discounts Acct. No.
506Date Explanation PR Debit Credit Balanc
e2011
May 31 CD2
575 575
31 G4 575 0
Purchase Returns and Allowances Acct. No. 507
Date Explanation PR Debit Credit Balance
2011May 3 CD
2798 798
31 G4 798 0
Amortization Expense, Office Equipment Acct. No. 612
Date Explanation PR Debit Credit Balance
2011May
31 G3 329 329
31 G4 329 0
Amortization Expense, Store Equipment Acct. No. 613
Date Explanation PR Debit Credit Balance
2011May
31 G3 567 567
31 G4 567 0
Office Salaries Expense Acct. No. 620
Date Explanation PR Debit Credit Balance
2011May
15 CD2
3,150 3,150
30 CD 3,150 6,300Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 896
231 G4 6,300 0
Sales Salaries Expense Acct. No. 621
Date Explanation PR Debit Credit Balance
2011May
15 CD2
5,320 5,320
30 CD2
5,320 10,640
31 G4 10,640 0
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
2011May
31 G3 553 553
31 G4 553 0
*Comprehensive Problem 8.2—Alpine Company (continued)Rent Expense, Office Space Acct. No.
641Date Explanation PR Debit Credit Balanc
e2011
May
1 CD2
742 742
31 G4 742 0
Rent Expense, Selling Space Acct. No. 642
Date Explanation PR Debit Credit Balance
2011May
1 CD2
2,968 2,968
31 G4 2,968 0
Office Supplies Expense Acct. No. 650
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.897 Fundamental Accounting Principles, Twelfth Canadian Edition
Date Explanation PR Debit Credit Balance
2011May
31 G3 289 289
31 G4 289 0
Store Supplies Expense Acct. No. 651
Date Explanation PR Debit Credit Balance
2011May
31 G3 669 669
31 G4 669 0
Utilities Expense Acct. No. 690
Date Explanation PR Debit Credit Balance
2011May
26 CD2
1,283 1,283
31 G4 1,283 0
Income Summary Acct. No. 901
Date Explanation PR Debit Credit Balance
2011May
31 G4 348,795
348,795
31 G4 315,667
33,128
31 G4 33,128
0
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 898
*Comprehensive Problem 8.2—Alpine Company (continued)ACCOUNTS RECEIVABLE SUBLEDGER
Deaver Corp.Date Explanation PR Debit Credit Balanc
e2011
May
26 S2 14,210
14,210
Essex CompanyDate Explanation PR Debit Credit Balanc
e2011
May
2 S2 6,100 6,100
11 CR2
6,100 0
16 S2 3,990 3,990
Nabors, Inc.Date Explanation PR Debit Credit Balanc
e2011
Apr.
28 S2 4,725 4,725
May
2 G3 175 4,550
5 CR2
4,550 0
Oscar ServicesDate Explanation PR Debit Credit Balanc
e2011
May
22 S2 6,850 6,850
30 CR2
6,850 0
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.899 Fundamental Accounting Principles, Twelfth Canadian Edition
*Comprehensive Problem 8.2—Alpine Company (continued)ACCOUNTS PAYABLE SUBLEDGER
Chandler Corp.Date Explanation PR Debit Credit Balanc
e2011
May
17 P2 13,650 13,650
23 CD2
13,650
0
Gale, Inc.Date Explanation PR Debit Credit Balanc
e2011
May
11 P2 8,800 8,800
19 CD2
8,800 0
Parkay ProductsDate Explanation PR Debit Credit Balanc
e2011
Apr.
29 P2 7,098 7,098
May
3 G3 798 6,300
8 CD2
6,300 0
25 P2 3,080 3,080
Thompson Supply Co.Date Explanation PR Debit Credit Balanc
e2011
May
4 P2 37,729 37,729
10 P2 4,074 41,80312 G3 854 40,94924 P2 9,030 49,979
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 900
*Comprehensive Problem 8.2—Alpine Company (continued)ALPINE COMPANY
Work SheetFor Month Ended May 31, 2011
Balance Sheet and
Income Statement of
Trial Balance
Adjustmen ts
Statement
Owner’s Equity
Debit Credit
Debit Credit
Debit Credit
Debit Credit
Cash............................ 135,911
135,911
Accounts receivable..... 18,200
18,200
Merchandise inventory. 220,080
220,080
191,000
191,000
Office supplies............. 793 (c) 289
504
Store supplies.............. 3,301 (b) 669
2,632
Prepaid insurance........ 3,318 (a) 553
2,765
Office equipment.......... 25,690
25,690
Accumulated Amort., office equip.
9,898 (e) 329
10,227
Store equipment.......... 38,920
38,920
Accumulated Amort., store equip.
17,556
(d) 567
18,123
Accounts payable......... 53,059
53,059
Clint Barry, Capital....... 308,085
308,085
Clint Barry, Withdrawals................
7,000 7,000
Sales........................... 156,422
156,422
Sales discounts............ 350 350Sales returns and allowances...................
175 175
Purchases.................... 70,72 70,72
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.901 Fundamental Accounting Principles, Twelfth Canadian Edition
2 2Purchase discounts...... 575 575Purchase returns and allowances...................
798 798
Amort. expense, office equipment...................
(e) 329
329
Amort. expense, store equipment...................
(d) 567
567
Office salaries expense. 6,300 6,300Sales salaries expense. 10,64
010,64
0Insurance expense....... (a)
553553
Rent expense, office space..........................
742 742
Rent expense, selling space..........................
2,968 2,968
Office supplies expense ...................................
(c) 289
289
Store supplies expense (b) 669
669
Utilities expense.......... 1,2 83
1,2 83
Totals....................... 546,393
546,393
2,407 2,407 315,667
348,795
422,622
389,494
Net income.................. 33,1 28
33,1 28
Totals....................... 348,795
348,795
422,622
422,622
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 902
*Comprehensive Problem 8.2—Alpine Company (continued)
ALPINE COMPANYIncome Statement
For Month Ended May 31, 2011
Revenue:Sales ......................................$156,422
Less: Sales discounts........... $ 350Sales returns and allowances 175
525 Net sales ................................$155,897
Cost of goods sold:Merchandise inventory, April 30 220,080Purchases................................ $70,722
Less: ......Purchase discounts $575Purchase returns and allowances 798 1,373
Cost of goods purchased.......... 69,349 Goods available for sale........... $289,429Merchandise inventory, May 31. 191,000 Cost of goods sold.................... 98,429
Gross profit on sales ................... $ 57,468Operating expenses:
Selling expenses:Sales salaries expense ......... $10,640Rent expense, selling space . 2,968Store supplies expense ........ 669Amortization expense, store equipment 567 Total selling expenses .......... $ 14,844
General and administrative expenses:Office salaries expense......... $6,300Utilities expense .................. 1,283Rent expense, office space . . . 742Insurance expense ............... 553Amortization expense, office equipment 329Office supplies expense ........ 289Total general and administrative expenses
9,496 Total operating expenses......... 24,340
Net income.................................. $ 33,128Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.903 Fundamental Accounting Principles, Twelfth Canadian Edition
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 904
*Comprehensive Problem 8.2—Alpine Company (continued)
ALPINE COMPANYStatement of Owner’s Equity
For Month Ended May 31, 2011Clint Barry, Capital, April 30.$308,085Add: Net income ........... 33,128 Total ............................$341,213Less: Withdrawals.......... 7,000 Clint Barry, Capital, May 31$334,213
ALPINE COMPANYBalance SheetMay 31, 2011
Assets Current assets: Cash.............................................. $135,911
Accounts receivable....................... 18,200Merchandise inventory................... 191,000Office supplies .............................. 504Store supplies .............................. 2,632Prepaid insurance ......................... 2,765 Total current assets ......................$351,012
Property, plant and equipment:Office equipment...........................$25,690
Less: Accumulated amortization . 10,227$ 15,463Store equipment............................$38,920
Less: Accumulated amortization . 18,123 20,797Total property, plant and equipment 36,260
Total assets....................................$387,272
Liabilities Current liabilities:
Accounts payable ...................... $ 53,059
Owner’s Equity Clint Barry, Capital .........................
334,213
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.905 Fundamental Accounting Principles, Twelfth Canadian Edition
Total liabilities and owner’s equity... .$387,272
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.Solutions Manual for Chapter 8 906
*Comprehensive Problem 8.2—Alpine Company (concluded)
ALPINE COMPANYPost-Closing Trial Balance
May 31, 2011Account Debit Credit
Cash............................................$135,911Accounts receivable...................... 18,200Merchandise inventory.................. 191,000Office supplies.............................. 504Store supplies.............................. 2,632Prepaid insurance......................... 2,765Office equipment.......................... 25,690Accumulated amortization, office equipment....................................................$ 10,227Store equipment........................... 38,920Accumulated amortization, store equipment .................................................... 18,123Accounts payable ......................... 53,059Clint Barry, Capital....................... ...................................... 334,213 Totals..........................................$415,622......................................$415,622
ALPINE COMPANYSchedule of Accounts Receivable
May 31, 2011
Deaver Corp...................... $14,210Essex Company ................ 3,990 Total accounts receivable. . $18,200
ALPINE COMPANYSchedule of Accounts Payable
May 31, 2011
Parkay Products ............... $ 3,080Thompson Supply Co. ....... 49,979 Total accounts payable...... $53,059
Copyright © 2007 by McGraw-Hill Ryerson Limited. All rights reserved.907 Fundamental Accounting Principles, Twelfth Canadian Edition