Wiset 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 $ 14,300 of merchandise on credit from Noth Company, invoice dated April 2, terms 2/10, n/60.
3 Sold merchandise on credit to Page Alistair, Invoice No. 760, for $ 4,000 (cost is $ 3,000).
3 Purchased $ 1,480 of office supplies on credit from Custer, Inc. Invoice dated April 2, terms n/10 EOM.
4 Issued Check No. 587 to World View for advertising expense, $ 899.
5 Sold merchandise on credit to Paula Kohr, Invoice No. 761, for $ 8,000 (cost is $ 6,500).
6 Received an $ 80 credit memorandum from Custer, Inc., for the return of some of the office sup-plies received on April 3.
9 Purchased $ 12,125 of store equipment on credit from Hal’s Supply, invoice dated April 9, terms n/10 EOM.
11 Sold merchandise on credit to Nic Nelson, Invoice No 762, for $ 10,500 (cost is $ 7,000).
12 Issued Check No. 588 to Noth Company in payment of its April 2 invoice, less the discount.
13 Received payment from Page Alistair for the April 3 sale, less the discount.
13 Sold $ 5,100 of merchandise on credit to Page Alistair (cost is $ 3,600), Invoice No. 763.
14 Received payment from Paula Kohr 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, $ 10,750. Cashed the check and paid employees.
16 Cash sales for the first half of the month are $ 52,840 (cost is $ 35,880). (Cash sales are recorded daily from cash register data but are recorded only twice in this problem to reduce repetitive entries.)
17 Purchased $ 13,750 of merchandise on credit from Grant Company, invoice dated April 17, terms 2/10, n/30.
18 Borrowed $ 60,000 cash from First State Bank by signing a long-term note payable.
20 Received payment from Nic Nelson for the April 11 sale, less the discount.
20 Purchased $ 830 of store supplies on credit from Hal’s Supply, invoice dated April 19, terms n/10 EOM.
23 Received a $ 750 credit memorandum from Grant Company for the return of defective merchandise received on April 17.
23 Received payment from Page Alistair for the April 13 sale, less the discount.
25 Purchased $ 11,375 of merchandise on credit from Noth Company, invoice dated April 24, terms 2/10, n/60.
26 Issued Check No. 590 to Grant Company in payment of its April 17 invoice, less the return and the discount.
27 Sold $ 3,170 of merchandise on credit to Paula Kohr, Invoice No. 764 (cost is $ 2,520).
27 Sold $ 6,700 of merchandise on credit to Nic Nelson, Invoice No. 765 (cost is $ 4,305).
30 Issued Check No. 591, payable to Payroll, in payment of the sales salaries expense for the last half of the month, $10,750.
30 Cash sales for the last half of the month are $ 73,975 (cost is $ 58,900).
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 Wiset 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, 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. Prepare a trial balance of the general ledger and prove the accuracy of the subsidiary ledger by preparing a schedule of accounts receivable.
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).