Problem 7-5A (Part Level Submission) Selected accounts from the chart of accounts of Fornelli Co. are shown below. 101 Cash 306 Owner's Drawings 112 Accounts Receivable 401 Sales Revenue 120 Inventory 414 Sales Discounts 126 Supplies 505 Cost of Goods Sold 131 Prepaid Rent 631 Supplies Expense 201 Accounts Payable 729 Rent Expense 301 Owner's Capital Presented below are the purchases and cash payments journals for Fornelli Co. for its first month of operations. PURCHASES JOURNAL P1 Inventory Dr. Date Account Credited Ref. Accounts Payable Cr. July 4 N. Alvarado 7,270 5 F. Rees 8,000 11 J. Gallup 5,680 13 C. Werly 15,100 20 M. Mangus 7,850 43,900 CASH PAYMENTS JOURNAL CP1 Other Accounts Accounts Payable Inventory Cash Date Account Debited Ref. Dr. Dr. Cr. Cr. July 4 Supplies 630 630 10 F. Rees 8,000 80 7,920 11 Prepaid Rent 6,060 6,060 15 N. Alvarado 7,270 7,270 19 Owner's Drawings 2,130 2,130 21 C. Werly 15,100 151 14,949 8,820 30,370 231 38,959 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 The founder, N. Fornelli, invests $71,200 in cash. 6 Sell merchandise on account to Dow Co. $5,700 terms 1/10, n/30. 7 Make cash sales totaling $7,600. 8 Sell merchandise on account to S. Goebel $5,500, terms 1/10, n/30. 10 Sell merchandise on account to W. Leiss $5,900, terms 1/10, n/30. 13 Receive payment in full from S. Goebel. 16 Receive payment in full from W. Leiss. 20 Receive payment in full from Dow Co. 21 Sell merchandise on account to H. Kenney $5,000, terms 1/10, n/30. 29 Returned damaged goods to N. Alvarado and received cash refund of $340. (b) Journalize the transactions that have not been journalized in the sales journal and the cash receipts journal. (Record entries in the order displayed in the problem statement.) Sales Journal S1 Accounts Receivable Dr. Sales Revenue Cr. Date Account Debited Ref. Cost of Goods Sold Dr. Inventory Cr. July 6 July 8 July 10 July 21 A (112)(401) (505)(120) Cash Receipts Journal CR1 Date Account Credited Ref. Cash Dr. Sales Discounts Dr. Accounts Receivable Cr. Cost of Goods Sold Dr. Inventory Cr. Sales Revenue Cr. Other Accounts Cr. 301 120