Bruno Company (buyer) and Smith, Inc. (seller), engaged in the following transactions during January 2016:

Bruno Company

DATETRANSACTIONS

2016

Jan. 8Issued Check 2101 for $2,940 on account to Smith, Inc., in payment of Invoice 1885 dated December 30, 2015, less cash discount of $60.

10Purchased merchandise for $2,000 from Smith, Inc., Invoice 1920; terms 2/10, n/30.

15Received Credit Memorandum 320 from Smith, Inc., for damaged merchandise totaling $200 that was returned; the goods were purchased on Invoice 1920, dated January 10.

19Paid amount due to Smith, Inc., for Invoice 1920 of January 10, less the return of January 15 and less the cash discount, Check 2130.

30Purchased merchandise for $4,200 from Smith, Inc., Invoice 1950; terms 2/10, n/30.

Smith, Inc.

DATETRANSACTIONS

2016

Jan. 8Received payment of $2,940 on account from Bruno Company in payment of Invoice 1885 dated December 30, 2015, less cash discount of $60.

10Sold merchandise for $2,000 on account to Bruno Company, Invoice 1920, terms 2/10, n/30.

15Issued Credit Memorandum 320 to Bruno Company for damaged merchandise totaling $200 that was returned; the goods were purchased on Invoice 1920, dated January 10.

19Received payment from Bruno Company for Invoice 1920 of January 10, less the return of January 15 and less the cash discount.

30Sold merchandise for $4,200 to Bruno Company, Invoice 1950; terms 2/10, n/30.

INSTRUCTIONS

1. Open the accounts payable ledger account and accounts receivable ledger account indicated below for both Bruno Company and Smith, Inc. Enter the balances as of January 1, 2016.

2. Journalize the transactions above in a general journal for both Bruno Company and Smith, Inc. Begin the journals for both companies with page 21.

3. Post the transactions to the appropriate accounts in the general ledger and the accounts payable subsidiary ledger for Bruno Company.

4. Post the transactions to the appropriate accounts in the general ledger and the accounts receivable subsidiary ledger for Smith, Inc.

GENERAL LEDGER ACCOUNTS—BRUNO COMPANY

201 Accounts Payable, $3,000 Cr.

ACCOUNTS PAYABLE LEDGER ACCOUNT—BRUNO COMPANY

Smith, Inc., $3,000

GENERAL LEDGER ACCOUNTS—SMITH, INC.

111 Accounts Receivable, $3,000 Dr.

ACCOUNTS RECEIVABLE LEDGER ACCOUNT—SMITH, INC.

Bruno Company, $3,000

Analyze: What is the balance of the accounts payable for Smith, Inc., in the Bruno Company accounts payable subsidiary ledger? What is the balance of the accounts receivable for Bruno Company in the Smith, Inc., accounts receivable subsidiary ledger?