Question

Revenue and cash receipts journals; accounts receivable subsidiary and general ledgers

Transactions related to revenue and cash receipts completed by Crowne Business Services Co. during the period April 2–30 are as follows:

Apr. 2.		Issued Invoice No. 793 to Ohr Co., $6,260.
Apr. 5.		Received cash from Mendez Co. for the balance owed on its account.
Apr. 6.		Issued Invoice No. 794 to Pinecrest Co., $2,260.
Apr. 13.		Issued Invoice No. 795 to Shilo Co., $3,360.
		Post revenue and collections to the accounts receivable subsidiary ledger.
Apr. 15.		Received cash from Pinecrest Co. for the balance owed on April 1.
Apr. 16.		Issued Invoice No. 796 to Pinecrest Co., $7,020. Post revenue and collections to the accounts receivable subsidiary ledger.
Apr. 19.		Received cash from Ohr Co. for the balance due on invoice of April 2.
Apr. 20.		Received cash from Pinecrest Co. for balance due on invoice of April 6.
Apr. 22.		Issued Invoice No. 797 to Mendez Co., $9,250.
Apr. 25.		Received $2,560 note receivable in partial settlement of the balance due on the Shilo Co. account.
Apr. 30.		Received cash from fees earned, $15,780. Post revenue and collections to the accounts receivable subsidiary ledger.

Required:

1. Insert the following balances in the general ledger as of April 1:

11	Cash	$13,890
12	Accounts Receivable	16,920
14	Notes Receivable	7,360
41	Fees Earned	-

After completing the recording of the transactions in the journals in part 3, total each of the columns of the special journals, and post the individual entries and totals to the general ledger. Insert account balances after the last posting. When posting to the general ledger, post in chronological order. However, if there is more than one entry on the same date, be sure to post transactions from the revenue journal before posting transactions from the cash receipts journal.

If an amount box does not require an entry, leave it blank. In CNOW, Journal pages begin with “J”, Cash Receipts begin with “CR” and Cash Receipts begins with “R”. For example journal/ Cash Receipts/ Cash Receipts, page 1/36/40 respectively. POST. REF. is simply J1, CR36, and R40.

GENERAL LEDGER
Date	Item	Post. Ref.	Debit	Credit	Balance Dr.	Balance Cr.
Account: Cash # 11
Apr. 1	Balance	✔
Account: Accounts Receivable # 12
Apr. 1	Balance	✔
Account: Notes Receivable # 14
Apr. 1	Balance	✔
Account: Fees Earned # 41

2. Insert the following balances in the accounts receivable subsidiary ledger as of April 1:

Mendez Co.	$9,720
Ohr Co.	-
Pinecrest Co.	7,200
Shilo Co.	-

After completing the recording of the transactions in the journals in part 3, post to the accounts receivable subsidiary ledger in chronological order, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customer's account before recording a cash receipt. If an amount box does not require an entry, leave it blank. In CNOW, Journal pages begin with “J”, Cash Receipts begin with “CR” and Cash Receipts begins with “R”. For example journal/ Cash Receipts/ Cash Receipts, page 1/36/40 respectively. POST. REF. is simply J1, CR36, and R40.

ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Date	Item	Post. Ref.	Debit	Credit	Balance
Account: Mendez Co.
Apr. 1	Balance	✔
Account: Ohr Co.
Account: Pinecrest Co.
Apr. 1	Balance	✔
Account: Shilo Co.

Prepare a single-column revenue journal (p. 40) and a cash receipts journal (p. 36). Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. The Fees Earned column is used to record cash fees.

4. Using the two special journals and the two-column general journal (p. 1), journalize the transactions for April. Post to the accounts receivable subsidiary ledger, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customer’s account before recording a cash receipt.

5. Total each of the columns of the special journals and post the individual entries and totals to the general ledger. Insert account balances after the last posting.

If an amount box does not require an entry, leave it blank.

REVENUE JOURNAL				PAGE 40
Date	Invoice No.	Account Debited	Post. Ref.	Accounts Rec. Dr. Fees Earned Cr.
			✔
			✔
			✔
			✔
			✔
				() ()

CASH RECEIPTS JOURNAL					PAGE 36
Date	Account Credited	Post. Ref.	Fees Earned Cr.	Accts. Rec. Cr.	Cash Dr.
		✔
		✔
		✔
		✔
		✔
			()	()	()

JOURNAL				PAGE 1
Date	Description	Post. Ref.	Debit	Credit

6. What is the sum of the customer balances?
$

Does the sum of the customer balances agree with the accounts receivable controlling account in the general ledger?
   

7. Would an automated system omit postings to a controlling account as performed in step 5 for Accounts Receivable?

Answer 1

Crowne Business Service Co.
1&5)			Cash A/c		Account No.-11
					Balance
Date	Item	Ref No.	Debit	Credit	Debit	Credit
1-Apr	Balance				$                13,890.00
30-Apr			$                    15,780.00		$                29,670.00
			Accounts receivable		Account No.-12
					Balance
Date	Item	Ref No.	Debit	Credit	Debit	Credit
1-Apr	Balance				$                16,920.00
25-Apr				$                                2,560.00	$                14,360.00
30-Apr		R40	$                    28,150.00		$                42,510.00
30-Apr		CR36		$                              25,440.00	$                17,070.00
			Notes Receivable		Account No.-14
					Balance
Date	Item	Ref No.	Debit	Credit	Debit	Credit
1-Apr	Balance				$                   7,360.00
25-Apr			$                       2,560.00		$                   9,920.00
			Fees Earned		Account No.41
					Balance
Date	Item	Ref No.	Debit	Credit	Debit	Credit
30-Apr	Balance			$                              28,150.00	$                28,150.00
30-Apr				$                              15,780.00	$                43,930.00
Journal
Date	General,Journal	Debit	Credit
25-Apr	Notes Receivable	$                2,560.00
	To Shilo Co.		$                       2,560.00
	(Being Notes Received from Shilo co. for partial settlement)
Accounts receivable Subsidiary Ledger
2&4)		Mendez Co.			Balance
Date	Item	Ref No.	Debit	Credit	Debit	Credit
1-Apr	Balance				$                   9,720.00
5-Apr		CR36		$                                9,720.00
22-Apr		R40	$                       9,250.00		$                   9,250.00
		Ohr Co.			Balance
Date	Item	Ref No.	Debit	Credit	Debit	Credit
2-Apr		R40	$                       6,260.00		$                   6,260.00
19-Apr		CR36		$                                6,260.00
		Pinecrest Co.			Balance
Date	Item	Ref No.	Debit	Credit	Debit	Credit
1-Apr	Balance				$                   7,200.00
6-Apr		R40	$                       2,260.00		$                   9,460.00
15-Apr		CR36		$                                7,200.00	$                   2,260.00
16-Apr		R40	$                       7,020.00		$                   9,280.00
20-Apr		CR36		$                                2,260.00	$                   7,020.00
		Shilo Co.			Balance
Date	Item	Ref No.	Debit	Credit	Debit	Credit
13-Apr	Balance	R40	$                       3,360.00		$                   3,360.00
25-Apr		CR36		$                                2,560.00	$                      800.00
3,4& 5)		Revenue Journal
Date	Invoice No.	Account Debited	Post Ref	Account Received (DR) and Fess Earned (CR)
2-Apr	793	Ohr Co.		$                                6,260.00
6-Apr	794	Pinercrest		$                                2,260.00
13-Apr	795	Shilo Co.		$                                3,360.00
16-Apr	796	Pinercrest		$                                7,020.00
22-Apr	797	Mendez		$                                9,250.00
30-Apr				$                              28,150.00
		Cash Receipt Journal
Date	Account Credited	Post Ref	Fees Earned(CR)	Account Receipts (Cr)	Cash (Dr)
5-Apr	Mendez Co.			$                                9,720.00	$                   9,720.00
15-Apr	Pinecest Co.			$                                7,200.00	$                   7,200.00
19-Apr	Ohr co.			$                                6,260.00	$                   6,260.00
20-Apr	Pinecest Co.			$                                2,260.00	$                   2,260.00
30-Apr	Fees Earned		$                    15,780.00		$                15,780.00
30-Apr			$                    15,780.00	$                              25,440.00	$                41,220.00
6)	*The sum of customer balance in an agreement with the controlling account.Both have a balance of $17070($9250+$7020+$800)*
7)	**In an automated system individual transactions are automaticallyposted to the general ledger at the time of original entry.**