It is October 16, 2014, and you have just taken over the accounting work of China Moon Products, whose annual accounting period ends October 31. The company's previous accountant journalized its transactions through October 15 and posted all items that required posting as individual amounts, as an examination of the journals and ledgers in the Working Papers will show.
The company completed these transactions beginning on October 16, 2014. Terms of all credit sales are 2/10, n/30.
Oct. 16 Purchased office supplies on credit from Green Supply Company, $1,470. Invoice dated October 16, terms n/10 EOM.
16 Sold merchandise on credit to Heather Flatt, invoice #916, $9,100. Cost, $5,270
18 Issued a credit memorandum to Amy Izon for defective merchandise sold on October 15 and returned for credit, $400. The returned merchandise was scrapped.
19 Received a $1,280 credit memorandum from Walters Company for merchandise received on October 15 and returned for credit.
20 Received a $286 credit memorandum from Green Supply Company for office supplies received on October 16 and returned for credit.
20 Purchased store equipment on credit from Green Supply Company, invoice dated October 19, terms n/10 EOM, $14,800.
21 Sold merchandise on credit to Jan Wildman, invoice #91 7, $10,900 Cost, $6,320.
22 Received payment from Heather Flatt for the October 12 sale
25 Received payment from Amy Izon for the October 15 sale.
25 Issued cheque #623 to Walters Company in payment of its October 15 invoice.
25 Issued cheque #624 to Sunshine Company in payment of its October 15 invoice.
28 Received merchandise with an invoice dated October 28, terms 2/10, n/60, from Sunshine Company, $12,950.
28 Sold a neighbouring merchant a carton of calculator tape (store supplies) for cash at cost, $116
29 Marlee Levin, the owner of China Moon Products, used cheque #625 to withdraw $8,000 cash from the business for personal use.
30 Issued cheque #626 to Midwest Electric Company in payment of the October electric bill, $1,240.
30 Issued cheque #627 to Jamie Ford, the company's only sales employee, in payment of her salary for the last half of October, $3,260.
31 Cash sales for the last half of the month were $1 32,256. Cost, $76,700. Cash sales are usually recorded daily but are recorded only twice in this problem to reduce the repetitive transactions.
Required
1. Record the transactions in the journals provided.
2. Post to the customer and creditor accounts and also post any amounts that should be posted as individual amounts to the General Ledger accounts. Normally, these amounts arc postal daily, but they are postal only once by you in this problem because they are few in number.
3. Foot and cross foot the journals and make the month-end postings.
4. Prepare an October 31 trial balance and prepare schedules of accounts receivable and payable.