Please refer to problem 6-A3. The sales data listed there form the basis for much of this problem.
Refer to Problem 6-A,
Wilson Chan has just taken over a business started by his aunt in Sarnia, Ontario, and moved the company to Regina, Saskatchewan. The company is called Chan's Imported Technology (CIT for short) and has all new customers in the Regina region. CIT specializes in the sale of three types of advanced electronic devices: cell phones (CP), tablet computers (TC), and portable music players (MP). Wilson wants to keep track of each type of sale in total for each month of operations. Wilson employs two salespersons to oversee relations with their customers, and also wants to know the total of sales by salesperson each month. CIT's normal terms are 2% 10 days, net 30 days, but a couple of customers have been granted special terms of 3% 15 days, net 45 days. Here are the sales and sales-related transactions for CIT during their first month of operations in
August 2016:
2016 Aug. 2 Sold $4,000 (CP) and $5,500 (TC) to JIW Enterprises.
Invoice No. 2001. Normal terms. Sold by Heidi Wong (HW hereafter).
4 Sold $3,200 (CP), $1,600 (TC). and $2,600 (MP) to Case-5 Electronics. Invoice No. 2002. Special terms. Sold by Paul Jeffries (PJ hereafter).
5 Sold $2,900 (TC) and $1,200 (MP) to Advanced Technologies in Motion. Invoice No. 2003. Normal terms. Sold by PJ.
6 JIW Enterprises messaged that there was a minor problem with the screens of two of the cell phones they purchased on August 2. Wilson agreed to a credit allowance of $150 and issued credit memorandum No. 101 dated this date. Wilson decided not to keep track of credits by product category or by salesperson.
10 Sold $3,000 (CP), $4,750 (TC), and $1,700 (MP) to Manfred Communications. Invoice No. 2004. Normal terms. Sold by HW.
13 Sold $1,400 (CP), $3,500 (TC), and $850 (MP) to JIW Enterprises. Invoice No. 2005. Normal terms. Sold by HW.
17 Sold $930 (CP), $1,400 (TC), and $1,100 (MP) to Advanced Technologies in Motion. Invoice No. 2006. Normal terms. Sold by PJ.
20 The purchasing manager for Manfred Communications dropped by to mention that there was a memory flaw in one of the portable music players sold to them on August 10. Manfred had already replaced the memory component with their own supply, and so an adjustment in price of $75 was agreed to. Issued credit memorandum No. 102 to Manfred Communications this date.
22 Sold $4,200 (CP), $3,800 (TC), and $1,300 (MP) to WMJ Sales. Invoice No. 2007. Special terms. Sold by HW.
26 Sold $6,200 (TC) to Case-5 Electronics. Invoice No. 2008. Special terms. Sold by PJ.
28 Sold $2,550 (CP), $4,400 (TC), and $1,780 (MP) to Manfred Communications. Invoice No. 2009. Normal terms. Sold by HW.
30 Sold $1,430 (CP), $2,800 (TC), and $1,300 (MP) to Advanced Technologies in Motion. Invoice No. 2010. Normal terms. Sold by PJ.
The following cash was received by CIT during August, 2016: 2016
Aug. 3 W. Chan contributed $50,000 and deposited this in the CIT bank account.
11 JIW Enterprises paid Invoice No. 2001, less the credit memo, taking discount.
14 Advanced Technologies in Motion paid Invoice No. 2003, taking discount.
18 Case-5 Electronics paid Invoice No. 2002, taking their special discount.
21 Manfred Communications dropped off a cheque in full payment of Invoice No. 2004, less the credit memo, and taking the discount. Although a day late, the discount was approved by W. Chan.
23 JIW Enterprises paid Invoice No. 2005, taking discount.
26 Advanced Technologies in Motion paid Invoice No. 2006, taking discount.
31 WMJ Sales paid half of Invoice 2007, taking the special cash discount on the amount paid.
Required:
a. Enter the above transactions in the cash receipts journal.
b. Record all transactions to the customers' accounts in the AR subsidiary ledger.
c. Ensure that the cash receipts journal is completed and cross-added for the month.
d. Post all transactions to the relevant GL accounts at month-end. See account numbers below.
e. Prepare a schedule of accounts receivable as of Aug. 31, and ensure that the total agrees with GL account number 1300.
The company uses these additional GL account numbers:
Cash ................................ 1100
Owner's Equity, W. Chan ....... 3000