Darby Companys chart of accounts includes the following selected accounts. 101 Cash ...........401 Sales 112 Accounts Receivable
Question:
Darby Company’s chart of accounts includes the following selected accounts.
101 Cash ...........401 Sales
112 Accounts Receivable ......414 Sales Discounts
120 Merchandise Inventory ...505 Cost of Goods Sold
311 Common Stock
On June 1 the accounts receivable ledger of Darby Company showed the following balances: Deering & Son $2,500, Farley Co. $1,900, Grinnell Bros. $1,600, and Lenninger Co. $1,300. The June transactions involving the receipt of cash were as follows.
June 1 Stockholders invested $10,000 additional cash in the business, in exchange for common stock.
3 Received check in full from Lenninger Co. less 2% cash discount.
6 Received check in full from Farley Co. less 2% cash discount.
7 Made cash sales of merchandise totaling $6,135.The cost of the merchandise sold was $4,090.
9 Received check in full from Deering & Son less 2% cash discount.
11 Received cash refund from a supplier for damaged merchandise $320.
15 Made cash sales of merchandise totaling $4,500.The cost of the merchandise sold was $3,000.
20 Received check in full from Grinnell Bros. $1,600.
Instructions
(a) Journalize the transactions above in a six-column cash receipts journal with columns for Cash
Dr., Sales Discounts Dr., Accounts Receivable Cr., Sales Cr., Other Accounts Cr., and Cost of
Goods Sold Dr. /Merchandise Inventory Cr. Foot and cross foot the journal.
(b) Insert the beginning balances in the Accounts Receivable control and subsidiary accounts, and post the June transactions to these accounts.
(c) Prove the agreement of the control account and subsidiary account balances.
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
Financial Accounting
ISBN: 978-0470507018
7th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso