Question

[The following information applies to the questions displayed below.) Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 2/10, n/30). Mar. 1 Purchased $37,000 of merchandise from Van Industries, invoice dated March 1, terms 2/15, n/30. Sold merchandise on credit to Min Cho, Invoice No. 854, for $14,800 (cost is $7,400). 3 (a) Purchased $1,110 of office supplies on credit from Gabel Company, invoice dated March 3, terms n/10 EOM. 3 (b) Sold merchandise on credit to Linda Witt, Invoice No. 855, for $7,400 (cost is $3,700). Borrowed $72,000 cash from Federal Bank by signing a long-term note payable. Purchased $18,500 of office equipment on credit from Spell Supply, invoice dated March 9, terms n/10 EOM. Sold merchandise on credit to Jovita Albany, Invoice No. 856, for $3,700 (cost is $1,850). Received payment from Min Cho for the March 2 sale less the discount. 13 (a) Sent Van Industries Check No. 416 in payment of the March 1 invoice less the discount. 13 (b) Received payment from Linda Witt for the March 3 sale less the discount. Purchased $28,000 of merchandise from the CD Company, invoice dated March 13, terms 2/10, n/30. 15 (a) Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first half of the month, $15,900. Cashed the check and paid the employees. 15 (6) Cash sales for the first half of the month are $59,200 (cost is $47,360). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.) Purchased $1,630 of store supplies on credit from Gabel Company, invoice dated March 16, terms n/10 EOM. Received a $2,800 credit memorandum from CD Company for the return of unsatisfactory merchandise purchased on March 14. Received a $555 credit memorandum from Spell Supply for office equipment received on March 9 and returned for credit. Received payment from Jovita Albany for the sale of March 10 less the discount. Issued Check No. 418 to CD Company in payment of the invoice of March 13 less the March 17 return and the discount. Sold merchandise on credit to Jovita Albany, Invoice No. 857, for $11,100 (cost is $4,440). Sold merchandise on credit to Linda Witt, Invoice No. 858, for $4,440 (cost is $1,776). 31 (a) Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last half of the month, $15,900. Cashed the check and paid the employees. 31 (b) Cash sales for the last half of the month are $65,120 (cost is $39,072). 31 (c) Verify that amounts impacting customer and creditor accounts were posted and that any amounts that should have been posted as individual amounts to the general ledger accounts were posted. Foot and crossfoot the journals and make the month-end postings. Assume the following ledger account amounts Inventory (March 1 beg. bal. is $60,000), Z. Church, Capital (March 1 beg. bal. is $60,000) and Church Company uses the perpetual inventory system.

Answer 1

Req. 2C :

Cash Receipts Journal
Date	Account Credited	Cash Dr.	Sales Discount Dr.	Accounts Receivable Cr.	Sales Cr.	Other Accounts Cr.	Cost of Goods Sold Dr. Inventory Cr.
March 6	Long Term Notes Payable	$ 72,000				$ 72,000
March 12	Min Cho	14,504	296	14,800
March 13	Linda Witt	7,252	148	7,400
March 15	Sales	59,200			59,200		47,360
March 20	Jovita Albany	3,626	74	3,700
March 31	Sales	65,120			65,120		39,072
March 31	Totals	221,702	518	25,900	124,320	72,000	86,432

Req. 2D :

Cash Disbursements Journal
Date	Chk. No.	Payee	Account Debited	Cash Cr.	Inventory Cr.	Other Accounts Dr.	Accounts Payable Dr.
Mar 13	416	Van Industries	Van Industries	36,260	740		37,000
Mar 15	417	Payroll	Sales Salaries Expense	15,900		15,900
Mar 23	418	CD Company	CD Company	24,696	504		25,200
Mar 31	419	Payroll	Sales Salaries Expense	15,900		15,900
Mar 31	Totals			92,756	1,244	31,800	62,200

Req. 1 & 2 :

Date	Account Titles	Debit	Credit
		$	$
Mar 17	Accounts Payable	2,800
	Merchandise Inventory		2,800
March 19	Accounts Payable	555
	Office Equipment		555