Solution manual financial accounting 4e by wild appendi xe

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Appendix E
Reporting and Preparing
Special Journals
QUESTIONS
1.

The five fundamental principles of accounting information systems are: (a) control
principle, (b) relevance principle, (c) compatibility principle, (d) flexibility principle,
and (e) cost-benefit principle.

2.

The five components of an accounting system are: source documents, input
devices, information processors, information storage, and output devices.

3.

Source documents contain data about business transactions or events that are put
into the accounting system and processed. Examples of source documents are
invoices from suppliers, checks received from customers, and payroll forms filled
out by employees.

4.

An input device is used to transfer data from source documents to the information
processor(s). Examples of input devices for computer systems include keyboards,
scanners, and bar-code readers.

5.

Data stored "off-line" are not immediately available to the information processor(s),
while "online" data are immediately available.

6.

Output devices provide the means by which information is taken from the
accounting system and made available for use.

7.

Four types of transactions usually recorded in special journals are: (a) sales on
credit, (b) purchases on credit, (c) cash receipts, and (d) cash disbursements.

8.

The (a) initial and (b) page number of the journal from which the amount is posted is
entered in the Posting Reference column of the ledger account.

9.

The double posting does not cause the trial balance to be out of balance because
only one credit is posted to the general ledger—the subsidiary ledger posting and its
balances are not part of a trial balance (they give details of general ledger accounts).

10. When copies of the sales invoices are used as a sales journal, each invoice total is
posted to the proper customer account in the subsidiary Accounts Receivable
Ledger, after which the invoices are bound in numerical order. Then at the end of
the period the bound invoice copies are totaled and the total is debited to Accounts
Receivable and credited to Sales. This method is called direct posting of sales

invoices.

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11. Both kinds of credits must 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 (the Other Accounts column total is not posted—instead, each
amount is individually posted to its general ledger account). Placing these credits in
separate columns makes it possible to post the Accounts Receivable column total to
its controlling account.
12. Immediate recording and posting of credit sales and cash receipts from customers
provides up-to-date information for use in decisions about granting credit to
customers. Also, up-to-date account balances are needed if customers inquire
about their balances.
13. In its note 10, Best Buy discusses its two reportable segments, Domestic and
International. Domestic is by far the larger of the two segments.
14. No. Information regarding the net income earned by business segments is not
found on Circuit City’s Consolidated Statement of Operations (Income Statement).
However, notes to the financial statements include the information regarding
business segments, domestic and international.
15. No. Information regarding any assets owned by Apple’s business segments is not
reported on the balance sheet. However, the information is detailed in the notes to
its financial statements.

QUICK STUDIES
Quick Study E-1 (10 minutes)
1.

A

4.

E

2.

C

5.

B

3.

D

Quick Study E-2 (5 minutes)
1.

batch

2.

network

3.

scanner

4.

enterprise resource planning

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Quick Study E-3 (15 minutes)
1.

B

7.

B

2.

E

8.

B

3.

E

9.

A

4.

E

10.

D

5.

A

11.

B

6.

C

12.

D

Quick Study E-4 (10 minutes)
a.
b.
c.
d.
e.
f.
g.
h.

Sales Journal
Purchases Journal
Cash Disbursements Journal
Cash Receipts Journal
Cash Receipts Journal
Purchases Journal
Cash Disbursements Journal
Cash Disbursements Journal

Quick Study E-5 (15 minutes)
General Journal
Nov. 2

[In Purchases Journal]

Nov. 12

Automobiles ............................................................. 17,000
Common Stock..................................................

17,000

Owner contributed an auto to the business.

Nov. 16

[In Sales Journal]

Nov. 19

Sales Returns and Allowances ...............................
Accounts Receivable—K. Myer .......................

175
175

Customer returned (worthless) merchandise.

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Quick Study E-6 (15 minutes)
Segment
Segment
Income
Americas ....................... $465

Average
Segment Assets
$529

Segment return
on Assets
87.9%

Europe...........................

280

256

109.4

Japan.............................

115

122

94.3

Interpretation: The European segment reports the highest return on
segment assets. However, each of its other segments has a relatively high
return on segment assets as well.

Product
Product Sales
iPod ...............................
$1,306

Percent of Total Sales
15.8%

Power Macintosh .........

1,419

17.1

PowerBook ...................

1,589

19.2

iBook .............................

961

11.6

iMac ...............................

954

11.5

Other .............................

2,050

24.8

Total ..............................

$8,279

100.0%

Interpretation: Sales of Apple’s PowerBook, Power Macintosh, and the iPod
make up its largest percentages of total individual product sales. The
iBook and iMac make up the smallest percentage of total individual product
sales. Sales of Apple’s ―Other‖ set of products makes up the remaining
one-quarter of its total individual product sales.

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EXERCISES
Exercise E-1 (15 minutes)
SALES JOURNAL

Date

Invoice
Number

Account Debited

PR

Mar. 7 J. Dryer ......................................
5704
12 R. Lamb .....................................
5705
25 T. Taylor ....................................
5706

Accounts
Receivable Dr.
Sales Cr.

1,250
340

750

Cost of Goods
Sold Dr.
Inventory Cr.

800
200
500

Exercise E-2 (10 minutes)
Mar. 2
5
7
8
12
16
19
25

Cash Receipts Journal
Purchases Journal
Sales Journal
Cash Receipts Journal
Sales Journal
Cash Receipts Journal
Cash Receipts Journal
Sales Journal

Exercise E-3A (15 minutes)

SALES JOURNAL
Date
Mar. 7
12
25

Invoice
Account Debited
Number PR
J. Dryer ......................................
5704
R. Lamb .....................................
5705
T. Taylor ....................................
5706

Accounts Receivable Dr.
Sales Cr.
1,250
340
750

Exercise E-4 (20 minutes)
CASH RECEIPTS JOURNAL

Date Account Credited

Cost of
Sales Accounts
Other

Goods
Cash Discount Recble. Sales Accounts Sold Dr.
Explanation PR Dr.
Dr.
Cr.
Cr.
Cr.
Inventory Cr.

Nov. 9 Notes Payable..................
Note to bank
13 Common Stock ................
Contribution
18 Sales....................................
Cash sale
27 J. Than ...............................
Invoice, 11/7

3,750
5,000
330
980

3,750
5,000
330
20

250

1,000
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Exercise E-5 (10 minutes)
Nov. 3
7
9
13
18
22
27
30

Purchases Journal
Sales Journal
Cash Receipts Journal
Cash Receipts Journal
Cash Receipts Journal
Cash Disbursements Journal
Cash Receipts Journal
Cash Disbursements Journal

Exercise E-6A (25 minutes)

CASH RECEIPTS JOURNAL
Account
Date Credited
Explanation PR
Nov. 9 Notes Payable................
Note to bank

13 Common Stock.. Contribution
18 Sales .................................
Cash sale
27 J. Than..............................
Invoice, 11/7

Sales
Discount
Dr.

Cash
Dr.

3,750
5,000
330
980

Accts.
Rec.
Cr.

Sales

Cr.

Other
Accounts
Cr.

3,750
5,000
330
20

1,000

Exercise E-7 (20 minutes)
PURCHASES JOURNAL
Date

Account

Date
of
Invoice Terms

PR

Accounts
Payable
Cr.

June 1 Lucas, Inc...........................

6/01

n/30

9,100

14 Store Supplies/
Park Co. ..........................
6/14

n/30

340

17 Ray Company...................
6/17

n/30

380

Inventory
Dr.

Office
Supplies
Dr.

Other
Accounts

Dr.

9,100
340
380

Exercise E-8 (10 minutes)
June 1 Purchases Journal
8 Sales Journal
14 Purchases Journal
17 Purchases Journal
24 Cash Receipts Journal
28 Cash Disbursements Journal
29 Cash Disbursements Journal
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Exercise E-9A (20 minutes)
PURCHASES JOURNAL
Date

Account

Date
of

Invoice Terms

PR

Accounts
Payable
Cr.

Purchases
Dr.

9,100

June 1 Lucas, Inc...........................
6/01

n/30

9,100

14 Store Supplies/
Park Co. ..........................
6/14

n/30

340

17 Ray Company..................
6/17

n/30

380

Office
Supplies
Dr.

Other
Accounts
Dr.

340
380

Exercise E-10 (25 minutes)
CASH DISBURSEMENTS JOURNAL
Date

Ck.
No.

Payee

Account
Debited

PR

Cash
Cr.

Other Accounts
Inventory Accounts Payable
Cr.
Dr.
Dr.

Apr. 9 210 Kitt Corp.......................................
Store Supplies ...............................................................
650

650

17 211 City Bank.....................................
Notes Payable................................................................
1,400
1,400
28 212 Lite.................................................
Lite .....................................................................................
4,410
90

4,500

29 213 B. Dock ........................................
Salaries Expense............................................................
1,800
1,800

30 214 Seth, Inc. ......................................
Seth, Inc. ..........................................................................
2,950

2,950

Exercise E-11 (10 minutes)
April 3
9
12
17
20
28
29
30

Purchases Journal
Cash Disbursements Journal
Sales Journal
Cash Disbursements Journal
Purchases Journal
Cash Disbursements Journal
Cash Disbursements Journal
Cash Disbursements Journal

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Exercise E-12A (25 minutes)
CASH DISBURSEMENTS JOURNAL
Date

Ck.
No.

Payee

Account
Debited

PR

Purchases Other Accounts
Cash Discounts Accounts Payable
Cr.
Cr.
Dr.
Dr.

Apr. 9 210 Kitt Corp.......................................
Store Supplies ...............................................................
650

650

17 211 City Bank.....................................
Notes Payable................................................................
1,400
1,400
28 212 Lite.................................................
Lite .....................................................................................
4,410
90

4,500

29 213 B. Dock ........................................
Salaries Expense ...........................................................
1,800
1,800
30 214 Seth Inc........................................
Seth, Inc. ..........................................................................
2,950

2,950

Exercise E-13 (10 minutes)
a. (i)

The June 5 purchase would be recorded in the Purchases Journal.

(ii) The June 14 payment would be recorded in the Cash
Disbursements Journal.
b. The error in journalizing the June 14 transaction should be discovered
in the process of crossfooting the Cash Disbursements Journal.

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Exercise E-14 (30 minutes)
Part 1
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Anna Page
May 17 1,850 May 20

350

May 10
25

Sara Reed
2,940
1,340

Aaron Reckers
May 6 3,880

Part 2
GENERAL LEDGER

Accounts Receivable
May 31 10,010 May 20 350

Inventory
May 31 8,000

Sales
May 31 10,010

Sales Returns and
Allowances
May 20 350

Cost of Goods Sold
May 31 8,000

Part 3
MOUNTAIN VIEW
Schedule of Accounts Receivable
May 31
Anna Page ............................................. $ 1,500
Sara Reed .............................................. 4,280
Aaron Reckers ...................................... 3,880
Total accounts receivable .................... $ 9,660

Accounts Receivable Controlling Account
Total debit...................................................$10,010
Credit for return ......................................... (350)
Balance as of May 31 ................................$ 9,660

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Exercise E-15 (30 minutes)
Part 1
ACCOUNTS RECEIVABLE LEDGER

June 8

Eric Horner
7,100

June 2
29

Joe Mack
4,600
8,300

June 14

Hong Jiang
21,500

June 10

20

Tess Cox
14,400
12,200

Part 2
GENERAL LEDGER
Accounts Receivable
June 30 68,100

Sales
June 30

68,100

Part 3
KEELER COMPANY
Schedule of Accounts Receivable
June 30
Eric Horner ...............................................
$ 7,100
Hong Jiang ...............................................21,500
Joe Mack...................................................12,900
Tess Cox ...................................................26,600
Total accounts receivable .......................
$68,100

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Exercise E-16 (10 minutes)
1.
2.
3.
4.
5.

When the schedule of accounts payable is prepared.
When crossfooting the Purchases Journal.
When the trial balance is prepared.
When the schedule of accounts payable is prepared.
When the schedule of accounts payable is prepared.

Exercise E-17 (20 minutes)

Segment

Segment Income
(in $ mil.)
2007
2006

Segment Assets
(in $ mil.)

2007
2006

Segment Return
on Assets
2007

Specialty
Skiing Group .............. $ 72

$ 68

$ 591

$ 450

13.8%

Skating Group ............

19

16

63

52

33.0%

Specialty Footwear .......

32

29

165

146

20.6%

Other Specialty ..........

21

14

47

34

51.9%

Subtotal ......................

144

127

866

682

South America ...........

42

46

315

284

14.0%

United States ..............

17

18

62

45

31.8%

Europe ........................

15

13

24

22

65.2%

Subtotal ......................

74

77

401

351

Total .............................. $218

$204

$1,267

$1,033

General Merchandise

Analysis and interpretation: This company shows solid profitability in all
segments based on segment return on assets.
For the specialty segments, the ―Other Specialty‖ has the highest segment
return on assets at 51.9% in 2007, whereas the skiing segment has the
lowest return on segment assets at 13.8%.
For the geographic segments, the highest segment return on assets is
produced by the European segment with 65.2% in 2007, whereas the South
American segment has the lowest return of 14.0%.

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PROBLEM SET A
Problem E-1A (70 minutes)
Parts 1, 2 and 3

Date

SALES JOURNAL
Invoice
Accounts Receivable Dr.
Account Debited
Number
PR
Sales Cr.


760
Page Alistair..............................................
4,000

761
Paula Kohr ................................................
8,000

762
Nic Nelson.................................................
10,500

763
Page Alistair..............................................
5,100

764
Paula Kohr ................................................
3,170

765
Nic Nelson.................................................
6,700

Apr. 3
5
11
13
27

27
30 Totals .........................................................

CASH RECEIPTS JOURNAL
Sales
Cash
Discount
Date Account Credited Explanation
PR
Dr.
Dr.

Apr.13 Page Alistair ..............................................
Sale of 4/3
3,920
80

14 Paula Kohr .................................................
Sale of 4/5
7,840
160

16
18
20
23
30
30



Sales ...........................................................
Cash Sales
52,840
L.T. Notes Payable ......................................
Note to bank 251
60,000

Nic Nelson .................................................
Sale of 4/11
10,290

Page Alistair ..............................................
Sale of 4/13
4,998

Sales ...........................................................
Cash sales
73,975
Totals .......................................................... 213,863
(101)

Page 3
Cost of Goods Sold Dr.
Inventory Cr.

37,470

3,000
6,500
7,000

3,600
2,520
4,305
26,925

(106/413)

(502/119)

Accounts
Receivable
Cr.

Sales
Cr.

Other
Accts.
Cr.

Page 3
Cost of Goods
Sold Dr.
Inventory Cr.

4,000
8,000
52,840

35,880

60,000

210
102
___
552

10,500
5,100
_____
27,600

73,975
126,815

_____
60,000

(415)

(106)

(413)

()

58,900
94,780
(502/119)

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Problem E-1A (Continued)
Parts 2 and 3
GENERAL LEDGER
Cash
Date
Mar. 31
Apr. 30
Date
Apr. 30
30

Date
Mar. 31
Apr. 30
30
Date
Mar. 31
Apr. 18
Date
Apr. 30
30

213,863

Acct. No. 101
Credit
Balance
85,000
298,863

Accounts Receivable
Explanation
PR
Debit
S3
37,470
R3

Acct. No. 106
Credit
Balance
37,470
27,600
9,870

Explanation

PR
R3

Explanation

Inventory
PR

Debit

Debit

S3
R3
Long-Term Notes Payable
Explanation
PR
Debit
R3
Explanation

Sales
PR
S3
R3

Debit

Acct. No. 119
Credit
Balance
125,000
26,925
98,075
94,780

3,295
Acct. No. 251
Credit
Balance
210,000
60,000
270,000
Acct. No. 413
Credit
Balance
37,470
37,470
126,815
164,285

Date
Apr. 30

Sales Discounts
Explanation
PR
Debit
R3
552

Acct. No. 415
Credit
Balance
552

Date
Apr. 30
30

Cost of Goods Sold
Explanation
PR
Debit
S3
26,925
R3
94,780

Acct. No. 502
Credit
Balance
26,925
121,705

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Problem E-1A (Continued)
Parts 2 and 3 (continued)

Date
Apr. 3
13
13
23

ACCOUNTS RECEIVABLE LEDGER
Page Alistair
Explanation
PR
Debit
S3
4,000
R3
S3
5,100
R3

Date
Apr. 5
14
27

Paula Kohr
PR
Debit
S3
8,000
R3
S3

3,170

Date
Apr. 11
20
27

Explanation

Explanation

Nic Nelson
PR
Debit
S3
10,500
R3
S3
6,700

Credit
4,000
5,100

Credit
8,000

Credit
10,500

Balance
4,000
0
5,100
0

Balance
8,000
0
3,170
Balance
10,500
0
6,700

Part 4
WISET COMPANY
Trial Balance
April 30
Cash ......................................................................
Accounts receivable ............................................
Inventory ...............................................................
Long-term notes payable ....................................
Sales......................................................................
Sales discounts....................................................
Cost of goods sold ..............................................
Totals ....................................................................

Debit
$298,863

9,870
3,295

Credit

$270,000
164,285
552
121,705
$434,285

_______
$434,285

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Problem E-1A (Concluded)
Part 4 (continued)
WISET COMPANY
Schedule of Accounts Receivable
April 30
Paula Kohr ..................................................
Nic Nelson ..................................................
Total accounts receivable .........................

$3,170
6,700
$9,870

Part 5
Analysis component
To find the error(s), first re-add the account balances on the schedule of
accounts receivable to confirm that the addition is correct. Then, trace the
balances listed on the schedule of accounts receivable back to the
subsidiary accounts to confirm that they are listed correctly on the
schedule. Next, recalculate the balance of each subsidiary account to
confirm that the additions and subtractions are correct. Next, 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.

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Problem E-2AA (70 minutes)
Parts 1 and 2

Date

SALES JOURNAL
Invoice
Number PR

Account Debited

Page 3
Accounts Receivable Dr.
Sales Cr.

Apr. 3 Page Alistair ........................................
760



4,000

5 Paula Kohr ...........................................
761



8,000

11 Nic Nelson ...........................................
762



10,500

13 Page Alistair ........................................
763



5,100

27 Paula Kohr ...........................................
764



3,170

27 Nic Nelson ...........................................
765



6,700

30 Total ....................................................

37,470
(106/413)

CASH RECEIPTS JOURNAL
Account

Date Credited

Explanation

PR

Cash
Dr.

Page 3

Sales
Accounts
Discounts Receivable
Dr.
Cr.


Apr. 13 Page Alistair ..........................................
Sale of 4/3
3,920

80

4,000


14 Paula Kohr ............................................
Sale of 4/5
7,840

160

8,000

16 Sales .....................................................
Cash Sales 
52,840
251 60,000
18 L.T. Notes
Note to
Payable .................................................
bank

20 Nic Nelson.............................................
Sale of
10,290
4/11

Sales
Cr.

Other
Accounts
Cr.

52,840
60,000
210

10,500


23 Page Alistair ..........................................
Sale of
4,998
4/13

102

5,100


30 Sales .....................................................
Cash sales
73,975

___

_____

73,975

_____

30 Totals ............

213,863

552

27,600

126,815

60,000

(101)

(415)

(106)

(413)

()

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Problem E- 2AA (Continued)
Parts 2 and 3

Date
Mar. 31

Apr. 30
Date
Apr. 30
30

Date
Mar. 31

Date
Mar. 31
Apr. 18
Date
Apr. 30
30
Date
Apr. 30

GENERAL LEDGER
Cash
Explanation
PR
Debit
213,863

Acct. No. 101
Credit
Balance
85,000
298,863

Accounts Receivable
Explanation
PR
Debit
S3
37,470
R3

Acct. No. 106
Credit
Balance
37,470
27,600
9,870

R3

Explanation

Inventory
PR

Debit

Long-Term Notes Payable
Explanation
PR
Debit

Explanation

Acct. No. 119
Credit
Balance
125,000

R3

Acct. No. 251
Credit
Balance
210,000
60,000
270,000

Sales
PR
S3
R3

Acct. No. 413
Credit
Balance
37,470
37,470
126,815
164,285

Debit

Sales Discounts
Explanation
PR
Debit
R3
552

Acct. No. 415
Credit
Balance
552

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Problem E- 2AA (Continued)
Parts 2 and 3—continued
ACCOUNTS RECEIVABLE LEDGER
Date
Apr. 3
13
13
23
Date
Apr. 5

14
27
Date
Apr. 11
20
27

Explanation

Explanation

Explanation

Page Alistair
PR
Debit
S3
4,000
R3
S3
5,100
R3
Paula Kohr
PR
Debit
S3
8,000
R3
S3
3,170

Nic Nelson
PR
Debit
S3
10,500
R3
S3
6,700

Credit
4,000
5,100
Credit
8,000

Credit
10,500

Balance
4,000
0
4,100
0
Balance
8,000
0
3,170
Balance
10,500
0

6,700

Part 4
WISET COMPANY
Trial Balance
April 30
Cash .......................................................................
Accounts receivable .............................................
Inventory ................................................................
Long-term notes payable .....................................
Sales.......................................................................
Sales discounts.....................................................
Totals .....................................................................

Debit
$298,863
9,870
125,000

552
$434,285

Credit

$270,000
164,285
_______
$434,285

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Financial Accounting, 4th Edition


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Problem E- 2AA (Concluded)
Part 4—continued
WISET COMPANY
Schedule of Accounts Receivable
April 30
Paula Kohr ..................................................

$3,170

Nic Nelson ..................................................

6,700

Total accounts receivable .........................

$9,870

Part 5
Analysis component
To find the error(s), first re-add the account balances on the schedule of
accounts receivable to confirm that the addition is correct. Then, trace the
balances listed on the schedule of accounts receivable back to the
subsidiary accounts to confirm that they are listed correctly on the

schedule. Next, recalculate the balance of each subsidiary account to
confirm that the additions and subtractions are correct. Next, 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.

©McGraw-Hill Companies, 2008
Solutions Manual, Appendix E

837


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Problem E-3A (120 minutes)
Parts 1 and 3
PURCHASES JOURNAL

Date

Account

Date of
Invoice

Terms

PR

Accounts
Payable
Cr.

Page 3
Office
Other
Inventory Supplies Accounts
Dr.
Dr.
Dr.

4/2
2/10, n/60
Apr. 2 Noth Company .............................................



14,300

4/2 n/10, EOM
3 Office Supplies/Custer Inc. ........................



1,480

4/9 n/10, EOM 165/
9 Store Equip./Hal’s Supply ..........................

12,125



13,750

4/19 n/10, EOM 125/
20 Store Supplies/Hal’s Supply ......................

830



11,375

11,375

____

_____

53,860

39,425

1,480

12,955

(201)

(119)

(124)

()

4/17
2/10, n/30
17 Grant Company............................................

25 Noth Company ................................. 4/24

2/10, n/60

30 Totals .................................................

14,300
1,480
12,125
13,750
830

CASH DISBURSEMENTS JOURNAL

Date

Ck.
No. Payee

Account Debited

PR

Cash
Cr.

Inventory
Cr.

Page 3
Other
Accounts
Accounts Payable
Dr.
Dr.

Apr. 4 587 World View ....................................................
Advertising Expense .......................................................................
655
899

899

12 588 Noth Company................................................
Noth Company..................................................................................

14,014
286

14,300

16 589 Payroll ............................................................
Sales Salaries Expense...................................................................
621 10,750
10,750
26 590 Grant Company............................................
Grant Company ................................................................................

12,740
260

13,000

30 591 Payroll ............................................................
Sales Salaries Expense...................................................................
621 10,750
___
10,750

_____

30

27,300
(201)

Totals .............................................................

49,153

(101)

546
(119)

22,399
()

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Problem E-3A (Continued)
GENERAL JOURNAL

Page 3

Apr. 6 Accounts Payable--Custer Inc. ................................
201/
Office Supplies..................................................
124

80
80

Received a credit memorandum.

23 Accounts Payable--Grant Co. ...............................
201/
Inventory. ...........................................................
119

750
750

Received a credit memorandum.

Parts 2 and 3

Date
Mar. 31
Apr. 30

Date
Mar. 31
Apr. 23
30
30

GENERAL LEDGER
Cash
Explanation
PR
Debit
D3

Explanation

Inventory
PR
G3
P3
D3

Debit

39,425

Acct. No. 101
Credit
Balance
85,000
49,153
35,847

Acct. No. 119
Credit
Balance
125,000
750
124,250
163,675
546
163,129

Date

Apr. 3
6

Office Supplies
Explanation
PR
Debit
P3
1,480
G3

Acct. No. 124
Credit
Balance
1,480
80
1,400

Date
Apr. 20

Store Supplies
PR
Debit
P3
830

Acct. No. 125
Credit
Balance

830

Explanation

©McGraw-Hill Companies, 2008
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839


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Problem E-3A (Continued)
General Ledger—continued
Date
Apr. 9

Store Equipment
Explanation
PR
Debit
P3
12,125

Acct. No. 165
Credit
Balance
12,125

Date

Apr. 6
23
30
30

Accounts Payable
Explanation
PR
Debit
G3
80
G3
750
P3
D3
27,300

Acct. No. 201
Credit
Balance
(80)
(830)
53,860
53,030
25,730

Long-Term Notes Payable
Explanation
PR
Debit

Acct. No. 251
Credit
Balance
210,000

Date
Apr. 16
30

Sales Salaries Expense
Explanation
PR
Debit
D3
10,750
D3
10,750

Acct. No. 621
Credit
Balance
10,750
21,500

Date
Apr. 4

Advertising Expense
Explanation

PR
Debit
D3
899

Acct. No. 655
Credit
Balance
899

Date
Mar. 31

ACCOUNTS PAYABLE LEDGER
Date
Apr. 3
6

Date
Apr. 17
23
26

Explanation

Explanation

Custer, Inc.
PR
Debit

P3
G3
80
Grant Company
PR
Debit
P3
G3
750
D3
13,000

Credit
1,480

Balance
1,480
1,400

Credit
13,750

Balance
13,750
13,000
0

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Problem E-3A (Concluded)
Accounts Payable Ledger—continued

Date
Apr. 9
20

Date
Apr. 2
12
25

Explanation

Hal’s Supply
PR
Debit
P3
P3

Noth Company
Explanation
PR
Debit
P3

D3
14,300
P3

Credit
12,125
830

Balance
12,125
12,955

Credit
14,300

Balance
14,300
0
11,375

11,375

Part 4
WISET COMPANY
Trial Balance
April 30
Debit
$ 35,847
163,129
1,400

830
12,125

Cash.............................................................
Inventory .....................................................
Office supplies............................................
Store supplies.............................................
Store equipment .........................................
Accounts payable.......................................
Long-term notes payable ..........................
Sales salaries expense ..............................
21,500
Advertising expense ..................................
899
Totals ........................................................... $235,730

Credit

$ 25,730
210,000

$235,730

WISET COMPANY
Schedule of Accounts Payable
April 30
Custer Inc. ....................................................
$ 1,400
Hal’s Supply .................................................
12,955

Noth Company ............................................ .
11,375
Total accounts payable ..............................
$25,730
©McGraw-Hill Companies, 2008
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Problem E-4AA (80 minutes)
Parts 1 and 3
PURCHASES JOURNAL

Date

Account

Date of
Invoice

Terms

PR

Page 3
Accounts
Office

Other
Payable Purchases Supplies Accounts
Cr.
Dr.
Dr.
Dr.

2/10, n/60



14,300

4/2 n/10, EOM
3 Office Supplies/Custer Inc. ........................



1,480

4/9 n/10, EOM 165/
9 Store Equip./Hal’s Supply ..........................

12,125



13,750

4/19 n/10, EOM 125/

20 Store Supplies/Hal’s Supply ......................

830



11,375

11,375

____

_____

53,860

39,425

1,480

12,955

(201)

(505)

(124)

()

4/2
Apr. 2 Noth Company .............................................

4/17
17 Grant Company............................................

25 Noth Company ................................. 4/24

2/10, n/30

2/10, n/60

30 Totals .................................................

CASH DISBURSEMENTS JOURNAL

Date

Ck.
No. Payee

Account Debited

PR

Cash
Cr.

14,300
1,480

12,125
13,750
830

Page 3
Purchases
Other
Accounts
Discount Accounts Payable
Cr.
Dr.
Dr.

Apr. 4 587 World View ....................................................
Advertising Expense.......................................................................
655
899

899

12 588 Noth Company................................................
Noth Company .................................................................................

14,014
286

14,300

16 589 Payroll ............................................................
Sales Salaries Expense ..................................................................

621 10,750
10,750
26 590 Grant Company............................................
Grant Company................................................................................

12,740
260

13,000

30 591 Payroll ............................................................
Sales Salaries Expense ..................................................................
621 10,750
___
10,750

_____

30

27,300
(201)

Totals .............................................................

49,153
(101)

546
(507)

22,399
()

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Problem E-4AA (Continued)
GENERAL JOURNAL

Page 3

Apr. 6 Accounts Payable—Custer, Inc ..................................
201/
Office Supplies..................................................
124

80
80

Received a credit memorandum.

23 Accounts Payable—Grant Co. ..............................
201/
Purchase Returns and Allowances ...................

506

750
750

Received a credit memorandum.

Parts 2 and 3
GENERAL LEDGER

Date
Mar. 31
Apr. 30

Date
Mar. 31

Explanation

Cash
PR

Debit

D3

Explanation

Inventory
PR

Debit

Acct. No. 101
Credit
Balance
85,000
49,153
35,847
Acct. No. 119
Credit
Balance
125,000

Date
Apr. 3
6

Office Supplies
Explanation
PR
Debit
P3
1,480
G3

Acct. No. 124
Credit
Balance
1,480

80
1,400

Date
Apr. 20

Store Supplies
PR
Debit
P3
830

Acct. No. 125
Credit
Balance
830

Store Equipment
Explanation
PR
Debit
P3
12,125

Acct. No. 165
Credit
Balance
12,125

Date

Apr. 9

Explanation

©McGraw-Hill Companies, 2008
Solutions Manual, Appendix E

843