Assume that Crystal Company in Problem 7-5A uses the periodic inventory system. Req...

Assume that Crystal Company in Problem 7-5A uses the periodic inventory system.

Required

1. Open the following general ledger accounts: Cash; Accounts Receivable; Inventory (March 1 beg.

bal. is $50,000); Office Supplies; Store Supplies; Office Equipment; Accounts Payable; Long-Term

Notes Payable; Z. Crystal, Capital (March 1 beg. bal. is $50,000); Sales; Sales Discounts; Purchases;

Purchases Returns and Allowances; Purchases Discounts; and Sales Salaries Expense. Open the following

accounts receivable subsidiary ledger accounts: Jovita Altern, Chao Chu, and Lance Wern.

Open the following Accounts Payable subsidiary ledger accounts: Glen Company, Value Industries,

Simon Supply, and AJ Company.

2. Enter the transactions from Problem 7-5A in a sales journal like that in Exhibit 7A.1, a purchases journal

like that in Exhibit 7A.3, a cash receipts journal like that in Exhibit 7A.2, a cash disbursements

journal like that in Exhibit 7A.4, or a general journal. Number journal pages as page 2.

3. Prepare a trial balance of the general ledger and prove the accuracy of the subsidiary ledgers by

preparing schedules of both accounts receivable and accounts payable.

REFER 7-5A

Crystal 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 $43,300 of merchandise from Value Industries, invoice dated March 1, terms 2/15,

n/30.

2 Sold merchandise on credit to Chao Chu, Invoice No. 854, for $16,000 (cost is $8,050).

3 Purchased $1,300 of office supplies on credit from Glen Company, invoice dated March 3,

terms n/10 EOM.

3 Sold merchandise on credit to Lance Wern, Invoice No. 855, for $9,500 (cost is $4,760).

6 Borrowed $72,000 cash from Federal Bank by signing a long-term note payable.

9 Purchased $21,000 of office equipment on credit from Simon Supply, invoice dated March 9,

terms n/10 EOM.

10 Sold merchandise on credit to Jovita Altern, Invoice No. 856, for $4,700 (cost is $2,380).

12 Received payment from Chao Chu for the March 2 sale less the discount.

13 Sent Value Industries Check No. 416 in payment of the March 1 invoice less the discount.

13 Received payment from Lance Wern for the March 3 sale less the discount.

14 Purchased $32,200 of merchandise from the AJ Company, invoice dated March 13, terms 2/10, n/30.

15 Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first

half of the month, $17,700. Cashed the check and paid the employees.

15 Cash sales for the first half of the month are $67,570 (cost is $39,080). (Cash sales are recorded

daily, but are recorded only twice here to reduce repetitive entries.)

16 Purchased $1,820 of store supplies on credit from Glen Company, invoice dated March 16,

terms n/10 EOM.

17 Received a $2,500 credit memorandum from AJ Company for the return of unsatisfactory merchandise

purchased on March 14.

19 Received a $630 credit memorandum from Simon Supply for office equipment received on

March 9 and returned for credit.

20 Received payment from Jovita Altern for the sale of March 10 less the discount.

23 Issued Check No. 418 to AJ Company in payment of the invoice of March 13 less the March 17

return and the discount.

27 Sold merchandise on credit to Jovita Altern, Invoice No. 857, for $14,300 (cost is $6,285).

28 Sold merchandise on credit to Lance Wern, Invoice No. 858, for $5,400 (cost is $2,300).

31 Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last

half of the month, $17,700. Cashed the check and paid the employees.

31 Cash sales for the last half of the month are $77,625 (cost is $40,510).

31 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.

Required

1. Open the following general ledger accounts: Cash; Accounts Receivable; Inventory (March 1 beg.

bal. is $50,000); Office Supplies; Store Supplies; Office Equipment; Accounts Payable; Long-Term

Notes Payable; Z. Crystal, Capital (March 1 beg. bal. is $50,000); Sales; Sales Discounts; Cost of

Goods Sold; and Sales Salaries Expense. Open the following accounts receivable subsidiary ledger

accounts: Jovita Altern, Chao Chu, and Lance Wern. Open the following accounts payable subsidiary

ledger accounts: Glen Company, Value Industries, Simon Supply, and AJ Company.

2. Enter these transactions in a sales journal like Exhibit 7.5, a purchases journal like Exhibit 7.9, a cash

receipts journal like Exhibit 7.7, a cash disbursements journal like Exhibit 7.11, or a general journal.

Number all journal pages as page 2.

3. Prepare a trial balance of the general ledger and prove the accuracy of the subsidiary ledgers by

preparing schedules of both accounts receivable and accounts payable.