Question

5. Selected accounts from the chart of accounts of Nader Company are shown below.

101 Cash

401 Sales Revenue

  112 Accounts Receivable

412 Sales Returns and Allowances

120 Inventory

414 Sales Discounts

126 Supplies

505 Cost of Goods Sold

157 Equipment

726 Salaries and Wages Expense

201 Accounts Payable

5. The cost of all merchandise sold was 60% of the sales price. During January, Nader completed the following transactions.

• Jan. 3 Purchased merchandise on account from Gallagher Co. $9,000.

• 4 Purchased supplies for cash $80.

• 4 Sold merchandise on account to Wheeler $5,250, invoice no. 371, terms 1/10, n/30.

• 5 Returned $300 worth of damaged goods purchased on account from Gallagher Co. on January 3.

• 6 Made cash sales for the week totaling $3,150.

• 8 Purchased merchandise on account from Phegley Co. $4,500.

• 9 Sold merchandise on account to Linton Corp. $5,400, invoice no. 372, terms 1/10, n/30.

• 11 Purchased merchandise on account from Cora Co. $3,700

. • 13 Paid in full Gallagher Co. on account less a 2% discount

. • 13 Made cash sales for the week totaling $6,260

. • 15 Received payment from Linton Corp. for invoice no. 372

. • 15 Paid semi-monthly salaries of $14,300 to employees

. • 17 Received payment from Wheeler for invoice no. 371

. • 17 Sold merchandise on account to Delaney Co. $1,200, invoice no. 373, terms 1/10, n/30.

• 19 Purchased equipment on account from Dozier Corp. $5,500.

• 20 Cash sales for the week totaled $3,200.

• 20 Paid in full Phegley Co. on account less a 2% discount.

• 23 Purchased merchandise on account from Gallagher Co. $7,800.

• 24 Purchased merchandise on account from Atchison Corp. $5,100.

• 27 Made cash sales for the week totaling $4,230.

• 30 Received payment from Delaney Co. for invoice no. 373.

• 31 Paid semi-monthly salaries of $13,200 to employees.

• 31 Sold merchandise on account to Wheeler $9,330, invoice no. 374, terms 1/10, n/30.

5. Nader Company uses the following journals.

• 1. Sales journal.

• 2. Single-column purchases journal.

• 3. Cash receipts journal with columns for Cash Dr., Sales Discounts Dr., Accounts Receivable Cr., Sales Revenue Cr., Other Accounts Cr., and Cost of Goods Sold Dr./Inventory Cr.

• 4. Cash payments journal with columns for Other Accounts Dr., Accounts Payable Dr., Inventory Cr., and Cash Cr.

• 5. General journal.

5. Instructions

• Using the selected accounts provided:

• (a) Record the January transactions in the appropriate journal noted

. • (b) Post to the appropriate A/R and A/P subsidiary ledger accounts

• (c) Post of the general ledger accounts

Answer 1

Answer:

Giving the answer of part (a) and (b)

(a) Journal Entries:

A journal entry is simply a summary of the debits and credits of the transaction entry to the Journal. They are important because they allow us to sort out the transactions in manageable data.

Amswer - Date CR(Amounting) Jan 3 9000 Journal Entries (a) un the Books of Nader company 1 of the month of January Particulars DR (Amouutin $) Purchase All Dr 9000 to Accounts Payable Alc (Being merchandise purchase U from Gallagher Co.) I Purchase Alc or - to cash Alc (Being supplies purchase i cash) 80 80 5250 4 5250 300 300 3150 3150 Account Receivable Ale by to Sales* Alc (Being merchandise sold to wheeler) Accounts Payable Ale Dy to Purchase Return (Being damaged goods returned to Gallagh Co.) Cash al or I to sales al (Being cash sales made) Purchase AC or to Accounts Payable AK (Being merchandice purchase from Phegley co.) Accounts Receivable AICDV to sales Alc (Being merchandise Sold to Linton corp.) 4500 4500 5400 5460

CR (Amount ins) Date 11 3700 13 8526 174 13 6260 15 54 5400 Particulars DR (Amount in $) Pwechase All Dr 3700 to Accounts Payable nc (Being purchase from corn Co.) Accounts Payable Alcoy 8700 ito cash Alc to Discount Recoined (Being full and final , Payment mode io Gauagher 6260 Cash Al or I - to sales Alc (Being cash sales mache) cash Alc 5346 o ver Discount Allowed De to Accounts Receivable ( Being payment received ytelu 1000 discount aŭowned as payment is received within 10 days) Salaries and wages 14300 Εκρεας Alc DY to cash Alc (Being semi-monthly ' Saudrice paid) 5250 I cash al or to Accounts Receivable (Being payment received from wheeler) Accounts Receivable DV 1200 to Sales Being inventory sold to Delaney & co. ) 15 143 0-0 - 17 5250 17 1200

Date CR Armount in $) Jan 19 5500 3200 20 3200 - 20 4410 90 23 Particulars DR (Amount in $) Equipment Alc Dr 5500 to 'Accounts Payable Alc (Being equipment purchase owl account from Dozies Coър) Cash Al or to Sales Alc ( Being Cash sales made) Accounts Payable Alcon 4500 to cash Alc to discount received (Bing full & final Payment made to Phegley Co.) Purchase al or 7800 to Accounts Payable [Being inventory puäthase from Gallagher.co.) | Purchase All or 516-0 to Accounts Payable ( Being inuentory purchase from Atchison corp.) Cash Ale or I 4230 to Sales ALC (Being cash sales made) cash Al or 1200 to Accounts Receivable (Being Payment received from Delaney & Co.) 7800 24 5100 4230 - 30 1200

Date CR (amount in $ ) DR (amount ing) 13200 31 _Pareticulars Salariel & Wages Alcor - to cash Being semi-monthly Salaveien paid) 13200 1 31 1 Accounts Receivable 9330 1 Al Dr 9330 to Sales AIC (Being inventory sold to wheeler ) - Sales Revenue can be used in place of Sales Alc. Sales Discount can be used in place of Discount Allowed Account Accounts Receivable Subsidiary Ledger : An accounts receivable subsidiary Ledger dan accounting Ledger that shows the transactions and payment history of each customers to whom business extends credit. The subsidiary Ledgere commonly difereed as subledger or Sub account. Accounts Payable subsidiary Tedgere i An accounts payable Subsidiary Ledger ů an accounting Ledger that shows the tšansachon thůtosey and amountă owed to eacli supplive aud veudoto

Accounts Receivable Subsidiosey dachgesos A. WHEELER AR 1 Dati Ref. Debit credit Balance Jan 4 371 | $5250 $5250 Jan 17 TOM 31 374 $9330 9330 B. LINTON CORP. AR 2 Debit credit Balance Date Jang 372 $ 5400 Jan 15 $5346 $ 54 AR 3 Date I ReL I Balance 373 Jan 17 Jan 30 C. DELANEY CO. l Debit I credit $ 1200 $1200 Accounts Payable Subsidiary Ledger A. Gallagher coo credit $ 9000 $ 300 $ 174 $8526 $ 7800 AP1 - I Ref De Balance Date Jan 3 Tan 5 Jan 13 Jan 23 $ 7800

B. Phegley co. Date I Rey , Debit 1 AP2 Balance credit $4500 Jans Jan2o $4410 $ 90 AP 3 C. . Cora Debit - I Ref Date Jan11 co. credit 3700 1 Balance $ 3700 AP4 Date Do | Dozier Debit I Rey Corp. credit $ 5500 Balance $ 5500 Janig APS E . I Ref . Date Jan24 Atchison corb. Debit I credit $ 5100 Balance . $ 5100