Refer to Problem 7-1A and assume that Moore Co. uses the periodic inventory system....

Refer to Problem 7-1A and assume that Moore Co. uses the periodic inventory system.

Required

1. Prepare a general journal, a purchases journal like that in Exhibit 7A.3, and a cash disbursements

journal like that in Exhibit 7A.4. Number all journal pages as page 3. Review the April transactions

of Moore Company (Problem 7-1A) and enter those transactions that should be journalized

in the general journal, the purchases journal, or the cash disbursements journal. Ignore any transaction

that should be journalized in a sales journal or cash receipts journal.

2. Open the following general ledger accounts: Cash, Inventory, Office Supplies, Store Supplies, Store

Equipment, Accounts Payable, Long-Term Notes Payable, Purchases, Purchases Returns and

Allowances, Purchases Discounts, Sales Salaries Expense, and Advertising Expense. Enter the

March 31 balances of Cash ($85,000), Inventory ($152,000), Long-Term Notes Payable ($137,000),

and B. Moore, Capital ($100,000). Also open accounts payable subsidiary ledger accounts for

Hafman Supply, Newt Company, Dann Company, and Cray, Inc.

3. Complete parts 3 and 4 of Problem 7-3A using the results of parts 1 and 2 of this problem.

Refer to Problem 7-1A

Moore Company completes these transactions during April of the current year (the terms of all its credit

sales are 2/10, n/30).

Apr. 2 Purchased $14,200 of merchandise on credit from Newt Company, invoice dated April 2, terms

2/10, n/60.

3 Sold merchandise on credit to Ty Afton, Invoice No. 760, for $5,200 (cost is $2,100).

3 Purchased $1,530 of office supplies on credit from Cray, Inc. Invoice dated April 2, terms n/10

EOM.

4 Issued Check No. 587 to World View for advertising expense, $879.

5 Sold merchandise on credit to Debra Kohn, Invoice No. 761, for $9,300 (cost is $7,600).

6 Received a $70 credit memorandum from Cray, Inc., for the return of some of the office supplies

received on April 3.

9 Purchased $11,435 of store equipment on credit from Hafman Supply, invoice dated April 9,

terms n/10 EOM.

11 Sold merchandise on credit to Pat Orlof, Invoice No 762, for $12,300 (cost is $7,300).

12 Issued Check No. 588 to Newt Company in payment of its April 2 invoice, less the discount.

13 Received payment from Ty Afton for the April 3 sale, less the discount.

13 Sold $6,900 of merchandise on credit to Ty Afton (cost is $3,600), Invoice No. 763.

14 Received payment from Debra Kohn for the April 5 sale, less the discount.

16 Issued Check No. 589, payable to Payroll, in payment of sales salaries expense for the first

half of the month, $11,300. Cashed the check and paid employees.

16 Cash sales for the first half of the month are $54,240 (cost is $42,400). (Cash sales are recorded

daily from cash register data but are recorded only twice in this problem to reduce repetitive

entries.)

17 Purchased $12,850 of merchandise on credit from Dann Company, invoice dated April 17,

terms 2/10, n/30.

18 Borrowed $55,000 cash from First State Bank by signing a long-term note payable.

20 Received payment from Pat Orlof for the April 11 sale, less the discount.

20 Purchased $1,000 of store supplies on credit from Hafman Supply, invoice dated April 19,

terms n/10 EOM.

23 Received a $900 credit memorandum from Dann Company for the return of defective merchandise

received on April 17.

23 Received payment from Ty Afton for the April 13 sale, less the discount.

25 Purchased $11,465 of merchandise on credit from Newt Company, invoice dated April 24,

terms 2/10, n/60.

26 Issued Check No. 590 to Dann Company in payment of its April 17 invoice, less the return

and the discount.

27 Sold $3,460 of merchandise on credit to Debra Kohn, Invoice No. 764 (cost is $2,470).

27 Sold $7,100 of merchandise on credit to Pat Orlof, Invoice No. 765 (cost is $4,895).

30 Issued Check No. 591, payable to Payroll, in payment of the sales salaries expense for the last

half of the month, $11,000.

30 Cash sales for the last half of the month are $72,100 (cost is $61,500).

Required

1. Prepare a sales journal like that in Exhibit 7.5 and a cash receipts journal like that in Exhibit 7.7.

Number both journal pages as page 3. Then review the transactions of Moore Company and enter

those that should be journalized in the sales journal and those that should be journalized in the cash

receipts journal. Ignore any transactions that should be journalized in a purchases journal, a cash disbursements

journal, or a general journal.

2. Open the following general ledger accounts: Cash, Accounts Receivable, Inventory, Long-Term

Notes Payable, Cost of Goods Sold, Sales, and Sales Discounts. Enter the March 31 balances for

Cash ($85,000), Inventory ($152,000), Long-Term Notes Payable ($137,000), and B. Moore,

Capital ($100,000). Also open accounts receivable subsidiary ledger accounts for Debra Kohn, Ty

Afton, and Pat Orlof.

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

preparing a schedule of accounts receivable.

Analysis Component

5. Assume that the total for the schedule of Accounts Receivable does not equal the balance of the

controlling account in the general ledger. Describe steps you would take to discover the error(s).