Chapter 5 HW: 2

Revenue and cash receipts journals; accounts receivable subsidiary and general ledgers

Transactions related to revenue and cash receipts completed by Crowne Business Services Co. during the period April 230 are as follows:

Apr. 2.		Issued Invoice No. 793 to Ohr Co., $7,570.
Apr. 5.		Received cash from Mendez Co. for the balance owed on its account.
Apr. 6.		Issued Invoice No. 794 to Pinecrest Co., $2,730.
Apr. 13.		Issued Invoice No. 795 to Shilo Co., $4,060.
		Post revenue and collections to the accounts receivable subsidiary ledger.
Apr. 15.		Received cash from Pinecrest Co. for the balance owed on April 1.
Apr. 16.		Issued Invoice No. 796 to Pinecrest Co., $8,490. Post revenue and collections to the accounts receivable subsidiary ledger.
Apr. 19.		Received cash from Ohr Co. for the balance due on invoice of April 2.
Apr. 20.		Received cash from Pinecrest Co. for balance due on invoice of April 6.
Apr. 22.		Issued Invoice No. 797 to Mendez Co., $11,180.
Apr. 25.		Received $3,090 note receivable in partial settlement of the balance due on the Shilo Co. account.
Apr. 30.		Received cash from fees earned, $19,080. Post revenue and collections to the accounts receivable subsidiary ledger.

Required:

1. Insert the following balances in the general ledger as of April 1:

11	Cash	$16,980
12	Accounts Receivable	20,690
14	Notes Receivable	9,000
41	Fees Earned	-

After completing the recording of the transactions in the journals in part 3, total each of the columns of the special journals, and post the individual entries and totals to the general ledger. Insert account balances after the last posting. When posting to the general ledger, post in chronological order. However, if there is more than one entry on the same date, be sure to post transactions from the revenue journal before posting transactions from the cash receipts journal.

If an amount box does not require an entry, leave it blank. In CNOW, Journal pages begin with J, Cash Receipts begin with CR and Cash Receipts begins with R. For example journal/ Cash Receipts/ Cash Receipts, page 1/36/40 respectively. POST. REF. is simply J1, CR36, and R40.

2. Insert the following balances in the accounts receivable subsidiary ledger as of April 1:

Mendez Co.	$11,890
Ohr Co.	-
Pinecrest Co.	8,800
Shilo Co.	-

After completing the recording of the transactions in the journals in part 3, post to the accounts receivable subsidiary ledger in chronological order, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customer's account before recording a cash receipt. If an amount box does not require an entry, leave it blank. In CNOW, Journal pages begin with J, Cash Receipts begin with CR and Cash Receipts begins with R. For example journal/ Cash Receipts/ Cash Receipts, page 1/36/40 respectively. POST. REF. is simply J1, CR36, and R40.

3. Prepare a single-column revenue journal (p. 40) and a cash receipts journal (p. 36). Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. The Fees Earned column is used to record cash fees.

4. Using the two special journals and the two-column general journal (p. 1), journalize the transactions for April. Post to the accounts receivable subsidiary ledger, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customers account before recording a cash receipt.

5. Total each of the columns of the special journals and post the individual entries and totals to the general ledger. Insert account balances after the last posting.

If an amount box does not require an entry, leave it blank.

6. What is the sum of the customer balances? And does the sum of the customer balances agree with the accounts receivable controlling account in the general ledger?

7. Would an automated system omit postings to a controlling account as performed in step 5 for Accounts Receivable?

GENERAL LEDGER Post. Date Item Debit Credit Balance Dr. Balance Cr. Ref. Account: Cash # 11 Apr. 1 Balance a 5 Account: Accounts Receivable # 12 Apr. 1 Balance III LITO Account: Notes Receivable # 14 Apr. 1 Balance S = Account: Fees Earned # 41 = = E ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER Date Item Post. Ref. Debit Credit Balance Account: Mendez Co. Apr. 1 Balance Account: Ohr Co. 3 Account: Pinecrest Co. Apr. 1 Balance 11 Account: Shilo Co. REVENUE JOURNAL PAGE 40 Accounts Rec. Dr. Date Invoice No. Account Debited Post. Ref. Fees Earned Cr. PAGE 36 CASH RECEIPTS JOURNAL Post. Fees Earned Account Credited Ref. Cr. Date Accts. Rec. Cr. Cash Dr. JOURNAL PAGE 1 Date Description Post. Ref. Debit Credit