Question

Bruno Company (buyer) and Smith, Inc. (seller), engaged in the following transactions during January 2016:

Bruno Company
DATE TRANSACTIONS
2016
Jan. 8 Issued Check 2101 for $2,940 on account to Smith, Inc., in payment of Invoice 1885 dated December 30, 2015, less cash discount of $60.
10 Purchased merchandise for $2,000 from Smith, Inc., Invoice 1920; terms 2/10, n/30.
15 Received Credit Memorandum 320 from Smith, Inc., for damaged merchandise totaling $200 that was returned; the goods were purchased on Invoice 1920, dated January 10.
19 Paid amount due to Smith, Inc., for Invoice 1920 of January 10, less the return of January 15 and less the cash discount, Check 2130.
30 Purchased merchandise for $4,200 from Smith, Inc., Invoice 1950; terms 2/10, n/30.

Smith, Inc.
DATE TRANSACTIONS
2016
Jan. 8 Received payment of $2,940 on account from Bruno Company in payment of Invoice 1885 dated December 30, 2015, less cash discount of $60.
10 Sold merchandise for $2,000 on account to Bruno Company, Invoice 1920, terms 2/10, n/30.
15 Issued Credit Memorandum 320 to Bruno Company for damaged merchandise totaling $200 that was returned; the goods were purchased on Invoice 1920, dated January 10.
19 Received payment from Bruno Company for Invoice 1920 of January 10, less the return of January 15 and less the cash discount.
30 Sold merchandise for $4,200 to Bruno Company, Invoice 1950; terms 2/10, n/30.

INSTRUCTIONS
1. Open the accounts payable ledger account and accounts receivable ledger account indicated below for both Bruno Company and Smith, Inc. Enter the balances as of January 1, 2016.
2. Journalize the transactions above in a general journal for both Bruno Company and Smith, Inc. Begin the journals for both companies with page 21.
3. Post the transactions to the appropriate accounts in the general ledger and the accounts payable subsidiary ledger for Bruno Company.
4. Post the transactions to the appropriate accounts in the general ledger and the accounts receivable subsidiary ledger for Smith, Inc.
GENERAL LEDGER ACCOUNTS—BRUNO COMPANY
201 Accounts Payable, $3,000 Cr.
ACCOUNTS PAYABLE LEDGER ACCOUNT—BRUNO COMPANY
Smith, Inc., $3,000
GENERAL LEDGER ACCOUNTS—SMITH, INC.
111 Accounts Receivable, $3,000 Dr.
ACCOUNTS RECEIVABLE LEDGER ACCOUNT—SMITH, INC.
Bruno Company, $3,000
Analyze: What is the balance of the accounts payable for Smith, Inc., in the Bruno Company accounts payable subsidiary ledger? What is the balance of the accounts receivable for Bruno Company in the Smith, Inc., accounts receivable subsidiary ledger?



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  • CreatedAugust 08, 2014
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