Presented below are the purchases and cash payments journals for Rosalez 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.
July 1 A. Rosalez invested $80,000 in cash in exchange for common stock.
6 Sold merchandise on account to Dorfner Co. $6,600 terms 1/10, n/30.
7 Made cash sales totaling $6,300.
8 Sold merchandise on account to Bonilha $3,600, terms 1/10, n/30.
10 Sold merchandise on account to L. Ortiz $4,900, terms 1/10, n/30.
13 Received payment in full from Bonilha.
16 Received payment in full from L. Ortiz.
20 Received payment in full from Dorfner Co.
21 Sold merchandise on account to M. Putzi $5,000, terms 1/10, n/30.
29 Returned damaged goods to T. Cigale and received cash refund of $450.

Instructions
(a) Open the following accounts in the general ledger.
101 ............Cash
112 ............Accounts Receivable
120 ............Inventory
127 ............Supplies
131 ............Prepaid Rent
201 ............Accounts Payable
311 ............Common Stock
332 ............Cash Dividends
401 ............Sales Revenue
414 ............Sales Discounts
505 ............Cost of Goods Sold
631 ............Supplies Expense
729 ............Rent Expense
(b) Journalize the transactions that have not been journalized in the sales journal, the cash receipts journal (see Illustration F-8), 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, 2014.
(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 $170 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 31,2014.

Transcribed Image Text:

PURCHASES JOURNAL Inventory Dr Date Account Credited Ref.Accounts Payable Cr 6,500 8,100 5,920 15,300 7,900 43,720 July 4 T. Cigale 5 K. Emmons 1M. Huang 13 D. Talbert 20 G. Young CASH PAYMENTS JOURNAL CP1 Other Accounts Account Debited Accounts PayablInventory Cash Date Ref Dr Dr. Cr Cr July 4 Supplies 600 10| K. Emmons 11Prepaid Rent 15 T. Cigale 19 Cash Dividends 21 D. Talbert 6,000 2,500 9,100 8,100 6,500 15,300 29,900 600 8,019 6,000 6,500 2,500 15,147 38,766 153 234