Please do not forgetPlease do not forget

News articles are due by the end of this News articles are due by the end of this week……week……

Must have 6 of them, not from the same Must have 6 of them, not from the same day…..day…..

Short summary about each Short summary about each DUE BY THURSDAY!!!!!!!!DUE BY THURSDAY!!!!!!!!

Chapter 10Chapter 10

Journalizing Payments Using Journalizing Payments Using Special JournalsSpecial Journals

Moving from sole proprietorship to Moving from sole proprietorship to a Partnershipa Partnership

We know that if there is one owner we can We know that if there is one owner we can do just about anything with the money and do just about anything with the money and expenses.expenses.

However when there is more than one However when there is more than one owner many things change.owner many things change.

Different types of businessesDifferent types of businesses

When we were working with a sole When we were working with a sole proprietorship we were working in a proprietorship we were working in a service business.service business.

Now that the company is a partnership we Now that the company is a partnership we will be working in a merchandising will be working in a merchandising business. business.

Special JournalsSpecial Journals

Now that our merchandising business Now that our merchandising business does a lot more transactions. We use does a lot more transactions. We use journals to record just that type of journals to record just that type of transaction.transaction.

Special JournalsSpecial Journals

Purchases Journal – all Purchases Journal – all purchasespurchases of of merchandisemerchandise on account.on account.Merchandise is any item we buy to sell to our Merchandise is any item we buy to sell to our

customers.customers.Cash payments journal – for all cash Cash payments journal – for all cash

paymentspaymentsAnytime we write a check for something.Anytime we write a check for something.

Special Journals cont’dSpecial Journals cont’d

Sales Journal – for all sales of Sales Journal – for all sales of merchandise on accountmerchandise on accountAnytime we sell something to someone on Anytime we sell something to someone on

credit.credit.Cash receipts journal – for anytime we Cash receipts journal – for anytime we

receive money.receive money.General Journal – for all other transactionsGeneral Journal – for all other transactions

Terms you need to know.Terms you need to know.

Cost of merchandise Cost of merchandise The price a business pays for goods it The price a business pays for goods it

purchases to sell.purchases to sell.MarkupMarkup

The amount added to establish the selling The amount added to establish the selling price from what the business paid for it. price from what the business paid for it.

VendorVendorThe person we buy the merchandise from.The person we buy the merchandise from.

Purchases Journal

Date Account Credited Purch No. Post RefPurchases Dr. Accts Pay Cr.

           

           

           

           

           

           

           

           

           

Special Amount Column

Things you need to know about Things you need to know about purchasespurchases

When you buy something on account, you When you buy something on account, you receive a purchase invoicereceive a purchase invoiceTerms of saleTerms of sale

2/10 N 302/10 N 30 2% discount if paid for in full within the first 10 days2% discount if paid for in full within the first 10 days N 30 or Balance is due at the end of the monthN 30 or Balance is due at the end of the month

New Account- Purchases – Asset AccountNew Account- Purchases – Asset AccountUsed anytime we buy goods to sell to Used anytime we buy goods to sell to

someone else. someone else. (Purchase )(Purchase )

November 2. Purchased merchandise on November 2. Purchased merchandise on account from Crown Ltd. $2,039.00. account from Crown Ltd. $2,039.00.

Purchases Order No. 83Purchases Order No. 83

Purchases A/P – Crown Ltd

2039 2039

November 2. Purchased merchandise on November 2. Purchased merchandise on account from Crown Ltd. $2,039.00. account from Crown Ltd. $2,039.00. Purchases Order No. 83Purchases Order No. 83

Purchases Journal

Date Account Credited Purch No. Post RefPurchases Dr.Accts Pay Cr.

Nov 2 Crown Ltd. 83   2039

           

           

           

           

           

           

           

           

Cash Payments JournalCash Payments Journal

Section 2Section 2

Cash Payments Journal

Date Account Title CK NO Post Ref

General

Accounts Pay Debit Cash CreditDebit Credit

                 

                 

                 

                 

                 

                 

                 

General Amount Columns

Special Amount Columns

Nov. 1 Purchased merchandise for Nov. 1 Purchased merchandise for Cash, $575. Check No. 290Cash, $575. Check No. 290

Cash Payments Journal

Date Account TitleCKNO

PostRef

GeneralAccount

PayDebit

CashCreditDebit Credit

Nov 1 Purchases 290   575     575

                 

                 

                 

Nov. 7 Paid cash on account to Pacific Nov. 7 Paid cash on account to Pacific Imports, $1050. covering Purchase Imports, $1050. covering Purchase

Invoice No. 81 Check No. 294Invoice No. 81 Check No. 294

Cash Payments Journal

Date Account TitleCKNO

PostRef

General

AccountsPay

DebitCashCreditDebit Credit

Nov 7 Pacific Imports 294       1050 1050

                 

Nov. 9 Paid cash for advertising Nov. 9 Paid cash for advertising $150 Check No. 296$150 Check No. 296

Cash Payments Journal

Date Account TitleCK N

Post Ref

General

Accounts Pay

Debit Cash CreditDebit Credit

Nov 9 Advertising Expense 296   150   150

                 

                 

Section 3Section 3

Nov 9, Paid cash to replenish the petty cash fund Nov 9, Paid cash to replenish the petty cash fund $205, office supplies $35.00, store supplies, $205, office supplies $35.00, store supplies,

$47.00, advertising $92.00 miscellaneous $31.00$47.00, advertising $92.00 miscellaneous $31.00

Cash Payments Journal

Date Account Title

CK NO Post Ref

General Accounts

Pay Debit

Cash Credi

tDebit Credit

Nov 9 Supplies - off 297   35   205

    Supplies - store     47      

    Advert Exp     92      

    Miscellaneous Exp     31      

Cash Payments Journal

Date Account Title CK NO Post Ref

General

Accounts Pay Debit Cash CreditDebit Credit

   

             

             

             

                 

November 10. Michelle Wu, partner, withdrew cash for personal use, $1,200. Check No. 298

Cash Payments Journal

Date Account Title CK NO Post Ref

General

Accounts Pay Debit Cash CreditDebit Credit

   

             

             

             

                 

Cash Payments Journal

Date Account TitleCK NO Post Ref

General

Accounts Pay Debit

Cash CreditDebit Credit

Nov 10 Michelle Wu, Draw 298   1200   1200

             

             

What do we do when we run out of room in our journal?

1. We total all of the columns

Cash Payments Journal

Date Account TitleCK NO

Post Ref

GeneralAccounts Pay Debit

Cash CreditDebit Credit

Nov 10Michelle Wu, Draw 298   1200   1200

             

Nov. 20 Carried Forward     13281.8 695.38 12240 24826.42

2. Then we double underline all of the columns once debit = credit.

We then take the totals and place them at the topOf the next page……

Cash Payments Journal

Date Account TitleCK NO

Post Ref

General

Accounts Pay Debit

Cash CreditDebit Credit

Nov. 20 Brought Forward   13281.8 695.38 12240 24826.42

           

   

Section 4 Journalizing other Section 4 Journalizing other transactions using General Journaltransactions using General Journal

General Journal Page 4

Date Account Title Doc No Post Ref Debit Credit

Nov 6 Supplies - Store M52   210  

Accts. Pay/ Foxfire Supply     210

         

November 6. Bought store supplies on account from Foxfire Supply, $210.00 Memorandum No. 52.

November 12. Karl Koehn, partner, withdrew November 12. Karl Koehn, partner, withdrew merchandise for personal use, $300.00 merchandise for personal use, $300.00

Memorandum 53.Memorandum 53.

General Journal Page 4

Date Account Title Doc No Post Ref Debit Credit

Nov 12 Karl Koehn, Drawing M53   300  

Purchases     300

Problems Problems

10-1,2,3,4,510-1,2,3,4,5We will also do problem 10-5 on the We will also do problem 10-5 on the

computer (maybe next class)computer (maybe next class)