Transactions follow for the Extreme Sports Ltd. store and three of its customers in the company's first month of business:
June 3 Ben Kidd used his Extreme Sports credit card to purchase $1,050 of merchandise.
6 Biljana Pavic used her Extreme Sports credit card to purchase $840 of merchandise.
8 Biljana Pavic returned $210 of merchandise on credit.
9 Nicole Montpetit purchased $421 of merchandise and paid for it with Visa. Visa charges a 2% service fee.
18 Ben Kidd used his Extreme Sports credit card to purchase an additional $348 of merchandise.
19 Bonnie Cutcliffe used her debit card to purchase $230 of merchandise. There is a $0.50 service charge on all debit card transactions.
20 Biljana Pavic made a $315 payment on her credit card account.
23 Nicole Montpetit used her Extreme Sports credit card to purchase $498 of merchandise.
25 Ben Kidd paid the amount owing on his June 3 purchase.
30 Biljana Pavic used her Extreme Sports credit card to purchase $420 of merchandise.
Instructions
(a) Record the above transactions. Ignore any inventory or cost of goods sold entries for purposes of this question.
(b) Set up T accounts for the Accounts Receivable general ledger (control) account and for the Accounts Receivable subsidiary ledger accounts. Post the journal entries to these accounts.
(c) Prepare a list of customers and the balances of their accounts from the subsidiary ledger. Prove that the total of the subsidiary ledger is equal to the control account balance.