Question

a. Journalize the following transaction. Record subsidiary ledger and post to ledger as appropriate.

b. Prepare a schedule of accounts receivable for the end of October.

4. Gary Wilcox opened Gary's Cosmetic Market on October 1. A 4% sales tax is to all cosmetic sales. Gary offers no sales discounts. tober 1. A 4% sales tax is calculated and added The following transactions occurred in October, 2018: Oct. 1 Gary Wilcox invested $9,500 in the Cosmetic Market from his personal savings account Oct. 5 From the cash register tapes, lipstick cash sales were $4,900, plus sales tax. Oct. 5 From the cash register tapes, eye shadow cash sales were $2,500, plus sales tax. Oct. 8 Sold lipstick on account to Fione Tay Co., $500, sales ticket no. 1, plus sales tax. Oct. 9 Sold eye shadow on account to Marika Sanford Co., $600, sales ticket no. 2, plus sales tax. Oct. 15 Issued credit memorandum no. 1 to Fione Tay Co. for $50 for lipstick returned. (Be sure to reduce Sales Tax Payable for Gary's.) Oct. 19 Marika Sanford Co. paid half the amount owed from sales ticket no. 2, dated October 9. Oct. 21 Sold lipstick on account to Mary Ruvolo Co., $500, sales ticket no. 3, plus sales tax. Oct. 24 Sold eye shadow on account to Peter Melnyk Co., $800, sales ticket no. 4, plus sales tax. Oct. 25 Issued credit memorandum no. 2 to Mary Ruvolo Co. for $300 for lipstick returned from sales ticket no. 3, dated October 21. Oct. 29 Cash sales taken from the cash register tape showed the following: a. Lipstick: $700 + $28 sales tax collected. b. Eye shadow: $3,500 + $140 sales tax collected. Oct. 29 Sold lipstick on account to Marika Sanford Co., $500, sales ticket no. 5, plus sales tax. Oct. 30 Received payment from Marika Sanford Co. of sales ticket no. 5, dated October 29.

Answer 1

Answer:-

1. Journal Entries for the month of October

Oct 1

Bank A/c   Dr                                                                               9500

       To Capital A/c                                                                                 9500

(Being capital invested in the business from personal savings account of Mr Gary)

Oct 5

Cash A/c   Dr   5096

     To Sales A/c                4900

     To Sales Tax                  196

(Being lipstick Cash sales made)

Oct 5

Cash A/c    Dr   2600

       To Sales A/c             2500

      To Sales Tax A/c      100

(Being Eye Shadow cash sales made)

Oct 8

Fione Tay Co.   Dr   520

   To Sales A/c                     500                    

   To Sales Tax A/c               20

(Being Sales made to Fionee Tay co.)

Oct 9

Marika Sanford Co.   Dr      624

          To Sales A/c                                600

          To Sales Tax A/c                          24

(Being Sales made to Sanford Co. On Account)

Oct 15

Sales Return A/c     Dr   48.08

Sales Tax A/c           Dr   1.92

            To Fione Tay co.                50

(Being sales returns of lipstick made)

Oct 19

Bank/Cash A/c     Dr          312

       To Marika Sanford Co.        312

(Being half payment made in respect to ticket 2)

Oct 21

Mary Ruvolo Co.   Dr    520

              To Sales A/c               500

              To Sales Tax A/c        20

(Being Sales made to Mary Ruvolo Co. On Account)

Oct 24

Peter Melnyk Co.    Dr   832

          To Sales A/c                        800

          To Sales Tax A/c                 32

(Being Sales made to Peter Melnyk Co. On Account)

Oct 25

Sales Return A/c     Dr   288.46

Sales Tax A/c           Dr   11.54

            To Mary Ruvolo Co.       300

(Being sales returns of lipstick made)

Oct 29

Cash A/c       Dr   4368

     To Sales A/c                4200

     To Sales Tax A/c         168

( Being Cash Sales made)

Oct 29

Marika Sanford Co.    Dr     520

          To Sales A/c                        500

          To Sales Tax A/c                   20

(Being lipstick sales made to Marika Sanford Co.)

Oct 30

Cash/Bank A/c       Dr           520

       To Marika Sanford Co.               520

(Being payment received from Marika Sanford Co.)

Ledger Accounts

Cash and Bank Account
Date	Particulars	Amount	Date	Particulars	Amount
Oct 31	By Balance c/d	22369	Oct 1	By Capital A/c	9500
			Oct 5	By Sales A/c	5069
			Oct 5	By Sales A/c	2600
			Oct 19	By Marika Sanford Co.	312
			Oct 29	By Sales A/c	4368
			Oct 29	By To Marika Sanford Co.	520
Total		22369	Total		22369

Sales Account
Date	Particulars	Amount	Date	Particulars	Amount
Oct 5	To Cash/Bank A/c	4900		By Fione Tay Co.	48.08
Oct 5	To Cash/Bank A/c	2500		By Mary Ruvolo Co.	288.46
Oct 8	To Fione Tay Co.	500		By Balance c/d	14163.46
Oct 9	To Marika Sanford Co.	600
Oct 21	To Mary Ruvolo Co.	500
Oct 24	To Peter Melnyk Co.	800
Oct 29	To Cash/Bank A/c	4200
Oct 29	To Marika Sanford Co.	500
Total		14500	Total		14500

b) Schedule for Accounts Receivable Schedule at the end of October

Date	Party	Amount	Ticket no.
Oct 8	Fione Tay Co.	470	1
Oct 9	Marika Sanford Co.	312	2
Oct 21	Mary Ruvolo Co.	520	3
Oct 24	Peter Melnyk Co	632	4