Assignment 1 Manual Sales Journals & Ledgers

Purpose: The purpose of this assignment is to learn the sequence of recording from Journal to Ledger when using more than a general journal and a general ledger. It will also refresh your memory of routine sales transactions that are part of the sales business process.

You have two options for completing this assignment. Read the following very CAREFULLY:

To complete it manually pencil and paper. To do so print this assignment and use the journals and ledgers provided at the end of this word document. Then create a pdf file by scanning your assignment (either use a copy machine or there is free scan software available, such as Cam Scanner, do NOT take pictures) and submit the scanned pdf file to blackboard.

2. To complete it electronically using the excel templates provided and answering the questions either directly in blackboard or in a word document. If you choose this option, then you are required to randomly change an opening balance in the Accounts Receivable Sub-Ledger and an opening balance in the General Ledger. This will make your submission unique to others. Dont forget to tell me what change you made. Submit the excel file to blackboard. Instructions for submitting to blackboard are provided on the next page. Keep the original file in case I need to see the original.

Required: Using the company information for KBM Distributors (see below), complete the following:

1. Use the appropriate journal to record the business transactions for January: sales journal, a cash receipts journal, or a general journal. KBM Distributors records sales returns and allowances in the general journal. AND if required, immediately post transactions to the Accounts Receivable Sub-ledger.

2. At the end of the month, total each column of the sales journal and the cash receipts journal. AND for the cash receipts journal, show that total debits equal total credits.

3. Post the month end journal totals to the General Ledger. (Tip: Dont forget to also post journal entries recorded in the general journal.)

4. Demonstrate (show) that the Accounts Receivable Sub-ledger agrees with (matches) the Accounts Receivable control account in the General Ledger.

5. Using the blank space provided below, answer the following questions:

a. Examining the Sales Revenue Account #410:

i. What Sales Revenue would be reported for the month of January? $________________ ii. Using only the general ledger account: was it primarily cash or credit sales? And how can you tell?

b. Examining the Inventory Account #130: i. What Inventory Balance would appear on the January 31st Balance Sheet? $_________________ ii. Do you think we should buy more? Why?

c. In your own words explain how special journals and sub-ledgers are different and how they are connected to each other.

d. In your own words what connection does this assignment have with your study of Receivables in FAP2?

e. Based on what you experienced share your thoughts about recording business transactions with special journals and sub-ledgers.

The following is a few suggestions on what you could say:

I didn't know ____________

I was surprised by ________

I made a mistake by ________ and caught it because ________. This made me realize__________.

I found this difficult because ____________________. I think using special journals is more___________ because___________. I learned that________________. Note this is not a fill in the blank exercise, these are examples to help you reflect on your experience.

KBM Distributors Company Information The chart of accounts of KBM Distributors includes the following selected accounts, along with their account numbers:

Cash.110

Land.170

Accounts Receivable120

Sales Revenue410

Notes Receivable...125

Sales Discounts420

Inventory.130

Sales Returns and Allowances.430

Supplies.140

Cost of Goods Sold505

All credit sales are on the companys standard terms of 2/10, n/30. Transactions in January that affected sales and cash receipts were as follows:

Jan. 2

Sold inventory on credit to Moorea Inc., $2,300. KBMs cost of these goods was $1,380.

4

Cash sales of merchandise for the week totaled $9,510 (cost, $5,706).

8

Sold merchandise on account to A.M. Thornton, $46,000 (cost, $27,600).

10

As a favor to a competitor, sold supplies at cost, $4,300, receiving cash.

10

Sold goods on account to Sloan Forge Ltd., $14,416 (cost, $8,650).

11

Cash sales of merchandise for the week were $8,424 (cost $6,120).

11

Received cash from Moorea Inc. in full settlement of its account receivable from January 2

14

Sold inventory on credit to the partnership of Wilkie & Blinn, $14,600 (cost, $9,040).

16

Sold merchandise on account to Sloan Forge Ltd., $2,526 (cost, $1,800).

18

Cash sales of merchandise for the week were $3,960 (cost $2,760).

22

Received $16,000 cash from A.M. Thornton in partial settlement of her account receivable.

23

Received cash from Wilkie & Blinn for its account receivable from January 14.

24

Sold goods on account to Olsen Inc., $6,080 (cost, $4,200).

25

Cash sales of merchandise for the week were $15,096 (cost $9,840).

28

Collected $10,500 on a note receivable.

29

Sold inventory on account to new customer, R.O. Bankston Inc., $968 (cost, $680).

30

Received goods sold on Jan 24 to Olsen Inc. for $160. The wrong items were shipped. The cost of the goods was $100.

31

Received $18,880 cash on account from A. M. Thornton.

Completeness & Accuracy Your Marks Marks Available

Sales Journal 4

Cash Receipts Journal 7

General Journal 2

Accounts Receivable Sub-Ledger 6

General Ledger 5

Proof AR Sub-Ledger agrees to GL 3

Answers to Questions 10

Following instructions 3

Total Marks 40