This is a continuation of Problem 3B. You must complete Problem 3B before attempting this problem. Additional transactions for July follow:
July 16 Received payment from Paul Kane for the July 6 sale.
17 Purchased merchandise on credit from Sprague Company, invoice dated July 17, terms 2/10, n/30, $1 7,600.
20 Purchased office supplies on credit from Poppe's Supply, $1,500. Invoice dated July 19, terms n/10 EOM.
21 Borrowed $40,000 from College Bank by giving a long-term note payable.
23 Received payment from Kelly Grody for the July 1 3 sale
24 Received payment from Karen Harden for the July 14 sale.
24 Received a $4,800 credit memorandum from Sprague Company for defective merchandise received on July 1 7 and returned.
26 Purchased merchandise on credit from Beech Company, invoice dated July 26, terms 2/10, n/30, $21,300.
27 Issued cheque #303 to Sprague Company in payment of its July 1 7 invoice
29 Sold merchandise on credit to Paul Kane, invoice #922, $52,000. Cost, $28,600
30 Sold merchandise on credit to Kelly Grody, invoice #923, $33,000. Cost, $18,150
31 Issued cheque #304, payable to Payroll, in payment of the sales salaries for the last half of the month, $60,400. For simplicity, we assume one cheque.
31 Cash sales for the last half of the month were $158,040. Cost, $86,900
Required
1. Set up the following General Ledger accounts: Cash (101); Accounts Receivable (106); Merchandise Inventory (119); Office Supplies (124); Store Supplies (125); Store Equipment (165); Accounts Payable (201); Long-Term Notes Payable (251); Gene Duncan, Capital (301); Sales (413); Sales Discounts (415); Cost of Goods Sold (502); Sales Salaries Expense (621); and Advertising Expense (655). Enter the June 30 balances of $190,000 for Cash; $334,000 for Merchandise Inventory; $190,000 for Gene Duncan, Capital; and $334,000 for Long-Term Notes Payable.
2. Continuing from Problem 3B, journalize the remaining July transactions for Duncan Industries into the appropriate special journal, posting to the sub ledgers as required.
3. Post the items that should be posted as individual amounts from the journals.
4. Foot and cross foot the journals and make the month-end postings.
5. Prepare a trial balance of the General Ledger and prepare schedules of accounts receivable and accounts payable.
Analysis Component: Assume that the sum of the account balances on the schedule of accounts payable does not equal the balance of the controlling account in the General Ledger. Describe the steps you would go through to discover the error(s).