Presented below are the purchases and cash oe journals for Reyes Co. for its first month of operations.

In addition, the following transactions have not been journalized for July. The cost of all merchandise sold was 65% of the sales price.

Instructions

(a) Open the following accounts in the general ledger.

(b) Journalize the transactions that have not been journalized in the sales journal, the cash receipts journal (see Illustration 7-9), and the general journal.

(c) Post to the accounts receivable and accounts payable subsidiary ledgers. Follow the sequence of transactions as shown in the problem.

(d) Post the individual entries and totals to the general ledger.

(e) Prepare a trial balance at July 31, 2008.

(f) Determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

(g) The following adjustments at the end of July are necessary.

(1) A count of supplies indicates that \($140\) is still on hand.

(2) Recognize rent expense for July, \($500.\)

Prepare the necessary entries in the general journal. Post the entries to the general ledger.

(h) Prepare an adjusted trial balance at July 31, 2008.

Illustration 7-9

Transcribed Image Text:

PURCHASES JOURNAL P1 Merchandise Inventory Dr. Accounts Payable Cr. 6,800 Date Account Credited Ref. July 4 G. Clemens 5 A. Ernst 11 J. Happy 13 C. Tabor 20 M. Sneezy 8,100 5,920 15,300 7,900 44,020 CASH PAYMENTS JOURNAL CP1 Other Accounts Merchandise Account Accounts Payable Inventory Cash Date July 4 Debited Ref. Dr. Dr. Cr. Cr. Store Supplies 600 600 10 A. Ernst 8,100 81 8,019 11 Prepaid Rent 6,000 6,000 15 G. Clemens 6,800 6,800 19 Reyes, Drawing 2,500 2,500 21 C. Tabor 15,300 153 15,147 9,100 30,200 234 39.066