Question

Wiset Company completes these transactions during April of the current year (the terms of all its credit sales are 2/10, n/30).

Required

1. Prepare a sales journal and cash receipts journal. Number both journal pages as page 3. Enter the transactions of Wiset Company that should be journalized in the sales journal and those that should be journalized in the cash receipts journal. Ignore transactions that should be journalized in a purchases journal, cash payments journal, or general journal.

2. Open the following general ledger accounts: Cash; Accounts Receivable; Inventory; Long-Term Notes Payable; B. Wiset, Capital; Sales; Sales Discounts; and Cost of Goods Sold. Enter the March 31 balances for Cash ($85,000), Inventory ($125,000), Long-Term Notes Payable ($110,000), and B. Wiset, Capital ($100,000). Also open accounts receivable subsidiary ledger accounts for Paula Kohr, Page Alistair, and Nic Nelson.

3. Verify that amounts that should be posted as individual amounts from the journals have been posted. (Such items are immediately posted.) Foot and crossfoot the journals and make the month-end postings.

4. (a) Prepare a trial balance of the general ledger accounts opened as Required for part 2. (b) Prove the accuracy of the subsidiary ledger by preparing a schedule of accounts receivable.

Answer 1

Subsidiary Ledger:

A subsidiary ledger is basically a sub-ledger under the main ledger, which is divided into separate parts. The total of all the particular subsidiary ledger equals its main ledger.

General Ledger:

A general ledger categorizes the entries made in the journal and derives the balance of each account, to be posted in the trial balance.

Accounts receivable:

When a service is rendered, or a product is sold, the income is earned. But the transaction is said to be complete only when the payment is done. At any time, goods or services can be availed on credit, which means, the goods or service can be availed but the payment can be done later. In such a case, the vendor records the revenue amount in the accounts receivable, which states that the cash or its equivalent is not received yet but, will be acquired later. Accounts receivable are recorded under assets in the balance sheet.

Schedule of accounts receivable:

The Schedule of accounts receivable shows the list of debtors who owe the company individually. The total schedule of accounts receivable will be the amount that is stated in the accounts receivable in the assets column.

1 (a) Prepare a sales journal of Company W.

1 (b) Prepare cash receipts journal of Company W.

2. Prepare general ledger of Company W.

3. Prepare accounts receivable ledger of Company W.

4 (a) Prepare trial balance of Company W.

Therefore, the trial balance total is

4 (b) Prepare schedule of accounts receivable of Company W.

Therefore, the total of schedule of accounts receivable is