This is a continuation of Problem 3 A. You must complete Problem 3 A before attempting this problem. Additional transactions for April follow:
Apr. 17 Purchased merchandise on credit from Sprocket Company, invoice dated April 16, terms 2/10, n/30, $12,750.
18 Borrowed $50,000 from First Bank by giving a long-term note payable.
20 Received payment from Kelly Schaefer for the April 11 sale.
20 Purchased store supplies on credit from Frank's Supply, invoice dated April 19, terms n/10 EOM, $650.
23 Received a $400 credit memorandum from Sprocket Company for defective merchandise received on April 1 7 and returned.
23 Received payment from Linda Hobart for the April 13 sale
25 Purchased merchandise on credit from Baskin Company, invoice dated April 24, terms 2/10, n/60, $10,900.
26 Issued cheque #590 to Sprocket Company in payment of its April 16 invoice.
27 Sold merchandise on credit to Paul Abrams, invoice #764, $3,800. Cost, $2,300
27 Sold merchandise on credit to Kelly Schaefer, invoice #765, $6,200. Cost, $3,800
30 Issued cheque #591, payable to Payroll, in payment of the sales salaries for the last half of the month, $9,500. For simplicity, we assume one cheque. 30 Cash sales for the last half of the month were $69,000. Cost, $41,400
Required
1. Set up the following General Ledger accounts: Cash (101); Accounts Receivable (106); Merchandise Inventory (119); Office Supplies (124); Store Supplies (125); Store Equipment (165); Accounts Payable (201); Long-Term Notes Payable (251); Jeff Newton, Capital (301); Sales (413); Sales Discounts (415); Cost of Goods Sold (502); Sales Salaries Expense (621); and Advertising Expense (655). Enter the March 31 balances of $167,000 for Cash; $105,000 for Merchandise Inventory; $105,000 for Jeff Newton, Capital; and $167,000 for Long-Term Notes Payable.
2. Continuing from Problem 7-3A, journalize the remaining April transactions for Newton Company into the appropriate special journal, posting to the sub ledgers as required.
3. Post the items that should be posted as individual amounts from the journals.
4. Foot and cross foot the journals and make the month-end postings.
5. Prepare a trial balance of the General Ledger and prepare schedules of accounts receivable and accounts payable.
Analysis Component: Assume that the sum of the account balances on the schedule of accounts receivable does not equal the balance of the controlling amount in the General Ledger. Describe the steps you would go through to discover the error(s).
(If the Working Papers that accompany this textbook are not being used, the forms needed to complete this problem are available on Connect.)