Chapter 7

Exercises: Set B
E7-1B Gill Company uses both special journals and a general journal as described in this chapter. Determine control account
On June 30, after all monthly postings had been completed, the Accounts Receivable control balances, and explain posting
account in the general ledger had a debit balance of $200,000; the Accounts Payable control of special journals.
account had a credit balance of $120,000. (SO 2, 4)
The July transactions recorded in the special journals are summarized below. No entries
affecting accounts receivable and accounts payable were recorded in the general journal for July.
Sales journal Total sales $252,000
Purchases journal Total purchases $151,000
Cash receipts journal Accounts receivable column total $211,000
Cash payments journal Accounts payable column total $152,000
Instructions
(a) What is the balance of the Accounts Receivable control account after the monthly postings
on July 31?
(b) What is the balance of the Accounts Payable control account after the monthly postings on
July 31?
(c) To what account(s) is the column total of $252,000 in the sales journal posted?
(d) To what account(s) is the accounts receivable column total of $231,000 in the cash receipts
journal posted?
E7-2B Presented below is the subsidiary accounts receivable account of Maxwell Shafer. Explain postings to subsidiary
ledger.
(SO 2)
Date Ref. Debit Credit Balance
2012
Sept. 4 S29 16,000 16,000
7 G4 2,000 14,000
23 CR9 14,000

Instructions
Write a memo to Tyler Johnston, chief financial officer, that explains each transaction.
E7-3B On September 1 the balance of the Accounts Receivable control account in the general Post various journals to
ledger of Harland Company was $12,960. The customers subsidiary ledger contained account control and subsidiary
balances as follows: Garcia $1,940, Verduzco $3,140, Bautista $2,560, Campione $5,320. At the accounts.
end of September the various journals contained the following information. (SO 2, 4)
Sales journal: Sales to Bautista $900; to Garcia $1,400; to Miranda $1,500; to Campione $1,200.
Cash receipts journal: Cash received from Bautista $1,610; from Campione $2,600; from Miranda
$580; from Verduzco $2,100; from Garcia $1,540.
General journal: An allowance is granted to Campione $325.
Instructions
(a) Set up control and subsidiary accounts and enter the beginning balances. Do not construct
the journals.
(b) Post the various journals. Post the items as individual items or as totals, whichever would be
the appropriate procedure. (No sales discounts given.)
(c) Prepare a list of customers and prove the agreement of the controlling account with the
subsidiary ledger at September 30, 2012.
E7-4B Yaspo Company has a balance in its Accounts Receivable control account of $15,000 on Determine control and
January 1, 2012. The subsidiary ledger contains three accounts: James Company, balance $6,000; subsidiary ledger balances
Black Company, balance $3,700; and Change Company. During January, the following for accounts receivable.
receivable-related transactions occurred. (SO 2)

Credit Sales Collections Returns

James Company $14,000 $12,000 $ -0-
Black Company 11,000 4,000 4,500
Change Company 13,000 14,000 -0-
34 Chapter 7 Accounting Information Systems
Determine control and
subsidiary ledger balances
for accounts payable.
(SO 2)
Record transactions in sales
and purchases journal.
(SO 2, 3)
Record transactions in cash
receipts and cash payments
journal.
(SO 2, 3)
Instructions
(a) What is the January 1 balance in the Change Company subsidiary account?
(b) What is the January 31 balance in the control account?
(c) Compute the balances in the subsidiary accounts at the end of the month.
(d) Which January transaction would not be recorded in a special journal?
E7-5B Fatal End Company has a balance in its Accounts Payable control account of $11,600 on
January 1, 2012. The subsidiary ledger contains three accounts: Smythe Company, balance $4,200;
Bleu Company, balance $2,600; and Polinski Company. During January, the following receivable-
related transactions occurred.
Purchases Payments Returns
Smythe Company $9,500 $8,400 $ -0-
Bleu Company 7,350 2,600 3,100
Polinski Company 8,900 9,500 -0-
Instructions
(a) What is the January 1 balance in the Polinski Company subsidiary account?
(b) What is the January 31 balance in the control account?
(c) Compute the balances in the subsidiary accounts at the end of the month.
(d) Which January transaction would not be recorded in a special journal?
E7-6B Roberta Company uses special journals and a general journal.The following transactions
occurred during September 2012.
Sept. 2 Sold merchandise on account to R. Sears, invoice no. 101, $900, terms n/30. The cost of
the merchandise sold was $540.
10 Purchased merchandise on account from M. Stoltz $800, terms 2/10, n/30.
12 Purchased office equipment on account from C. Cottrain 7,000.
21 Sold merchandise on account to W. Citel, invoice no. 102 for $1,000, terms 2/10, n/30.
The cost of the merchandise sold was $600.
25 Purchased merchandise on account from W. Corek $1,200, terms n/30.
27 Sold merchandise to K. Salma for $850 cash. The cost of the merchandise sold was
$510.
Instructions
(a) Prepare a sales journal (see Illustration 7-7) and a single-column purchase journal (see
Illustration 7-13). (Use page 1 for each journal.)
(b) Record the transaction(s) for September that should be journalized in the sales journal and
the purchases journal.
E7-7B Miramar Co. uses special journals and a general journal. The following transactions oc-
curred during May 2012.
May 1 F. Zaimer invested $40,000 cash in the business.
2 Sold merchandise to B. Counder for $3,800 cash. The cost of the merchandise sold was
$2,500.
3 Purchased merchandise for $4,300 from S. Trader using check no. 101.
14 Paid salary to G. Waldorf $650 by issuing check no. 102.
16 Sold merchandise on account to F. Etondo for $550, terms n/30. The cost of the mer-
chandise sold was $350.
22 A check of $5,400 is received from M. Reedy in full for invoice 101; no discount given.
Instructions
(a) Prepare a multiple-column cash receipts journal (see Illustration 7-9) and a multiple-
column cash payments journal (see Illustration 7-16). (Use page 1 for each journal.)
(b) Record the transaction(s) for May that should be journalized in the cash receipts journal
and cash payments journal.
 Exercises: Set B 35

E7-8B Gadle Company uses the columnar cash journals illustrated in the textbook. In April, the Explain journalizing in cash
following selected cash transactions occurred. journals.
1. Received cash refund from supplier for merchandise returned. (SO 3)
2. Received collection from customer within the 3% discount period.
3. Made cash sales.
4. Paid a creditor within the 3% discount period.
5. Received collection from customer after the 3% discount period had expired.
6. Paid freight on merchandise purchased.
7. Paid cash for office equipment.
8. Made a refund to a customer for return of damaged goods.
9. Withdrew cash for personal use of owner.
10. Purchased merchandise for cash.
Instructions
Indicate (a) the journal, and (b) the columns in the journal that should be used in recording each
transaction.
E7-9B Lanier Company has the following selected transactions during March. Journalize transactions in
general journal and post.
Mar. 2 Purchased equipment costing $7,500 from Tuan Company on account.
(SO 2, 4)
5 Received credit of $350 from Ramp Company for merchandise damaged in ship-
ment to Lanier.
7 Issued credit of $300 to Red Company for merchandise the customer returned.
The returned merchandise had a cost of $200.
Lanier Company uses a one-column purchases journal, a sales journal, the columnar cash jour-
nals used in the text, and a general journal.
Instructions
(a) Journalize the transactions in the general journal.
(b) In a brief memo to the president of Lanier Company, explain the postings to the
control and subsidiary accounts from each type of journal.
E7-10B Below are some typical transactions incurred by Koyama Company. Indicate journalizing in special
journals.
1. Return of merchandise sold for credit.
2. Payment of creditors on account. (SO 3)
3. Collection on account from customers.
4. Sale of merchandise on account.
5. Sale of land for cash.
6. Sale of merchandise for cash.
7. Received credit for merchandise purchased on credit.
8. Payment of employee wages.
9. Sales discount taken on goods sold.
10. Income summary closed to owners capital.
11. Purchase of office supplies for cash.
12. Depreciation on building.
13. Purchase of merchandise on account.
Instructions
For each transaction, indicate whether it would normally be recorded in a cash receipts journal,
cash payments journal, sales journal, single-column purchases journal, or general journal.
E7-11B The general ledger of Mancha Company contained the following Accounts Payable Explain posting to control
control account (in T-account form). Also shown is the related subsidiary ledger. account and subsidiary ledger.
(SO 2, 4)
GENERAL LEDGER
Accounts Payable
Feb. 15 General journal 1,900 Feb. 1 Balance 29,500
28 ? ? 5 General journal 400
11 General journal 700
28 Purchases 55,000
Feb. 28 Balance 36,000
36 Chapter 7 Accounting Information Systems

ACCOUNTS PAYABLE LEDGER

Huang Luang
Feb. 28 Bal. 16,400 Feb. 28 Bal. ?

Le
Feb. 28 Bal. 3,200

Instructions
(a) Indicate the missing posting reference and amount in the control account, and the missing
ending balance in the subsidiary ledger.
(b) Indicate the amounts in the control account that were dual-posted (i.e., posted to the
control account and the subsidiary accounts).
E7-12B Selected accounts from the ledgers of April Company at July 31 showed the Prepare purchases and general
following. journals.
(SO 2, 3)

GENERAL LEDGER
Equipment No. 153 Inventory No. 120
Date Explanation Ref. Debit Credit Balance Date Explanation Ref. Debit Credit Balance
July 1 G1 3,500 3,500 July 15 G1 500 500
18 G1 120 380
Accounts Payable No. 201
25 G1 180 200
Date Explanation Ref. Debit Credit Balance 31 P1 7,350 7,550
July 1 G1 3,500 3,500
15 G1 500 4,000
18 G1 120 3,880
25 G1 180 3,700
31 P1 7,350 11,050

ACCOUNTS PAYABLE LEDGER

Alma Equipment Co. Duffy Co.
Date Explanation Ref. Debit Credit Balance Date Explanation Ref. Debit Credit Balance
July 1 G1 3,500 3,500 July 14 P1 950 950
25 G1 180 770
Buntz Co. Earnhart Co.
Date Explanation Ref. Debit Credit Balance Date Explanation Ref. Debit Credit Balance
July 3 P1 2,200 2,200 July 12 P1 400 400
20 P1 600 2,800 21 P1 550 950
Cirillo Corp. Fleche Inc.
Date Explanation Ref. Debit Credit Balance Date Explanation Ref. Debit Credit Balance
July 17 P1 1,250 1,250 July 15 G1 500 500
18 G1 120 1,130
29 P1 1,400 2,530

Instructions
From the data prepare:
(a) the single-column purchases journal for July.
(b) the general journal entries for July.
E7-13B Pest Products uses both special journals and a general journal as described in this Determine correct posting
chapter. Pest also posts customers accounts in the accounts receivable subsidiary ledger. The amount to control account.
postings for the most recent month are included in the subsidiary T accounts on the next page. (SO 4)
 Exercises: Set B 37

West Plante
Bal. 500 375 Bal. 225 225
300 360

Wyoming Wells
Bal. 0 210 Bal. 180 180
210 290
225

Instructions
Determine the correct amount of the end-of-month posting from the sales journal to the
Accounts Receivable control account.
E7-14B Selected account balances for Moby Dick Company at January 1, 2012, are presented Compute balances in various
below. accounts.
(SO 4)
Accounts Payable $22,000
Accounts Receivable 29,000
Cash 20,000
Inventory 18,000
Moby Dicks sales journal for January shows a total of $125,000 in the selling price column,
and its one-column purchases journal for January shows a total of $88,000.
The column totals in Moby Dicks cash receipts journal are: Cash Dr. $81,000; Sales Discounts
Dr. $2,000; Accounts Receivable Cr. $50,000; Sales Revenue Cr. $12,000; and Other Accounts
Cr. $17,000.
The column totals in Moby Dicks cash payments journal for January are: Cash Cr. $70,000;
Inventory Cr. $2,000; Accounts Payable Dr. $58,000; and Other Accounts Dr. $13,000. Moby
Dicks total cost of goods sold for January is $80,000.
Accounts Payable,Accounts Receivable, Cash, Inventory, and Sales Revenue are not involved
in the Other Accounts column in either the cash receipts or cash payments journal, and are not
involved in any general journal entries.
Instructions
Compute the January 31 balance for Moby Dick in the following accounts.
(a) Accounts Payable.
(b) Accounts Receivable.
(c) Cash.
(d) Inventory.
(e) Sales Revenue.