Example of Manual Accounting

The abc Corporation completed these transactions during January of the current year:

January 1, Began business by selling stock for $700,000.00.

January 1, Rented office space for 1 month using check number 800 for $10,000.00 to Smithlord Properties. (Example posted to cash disbursement journal).

January 2, Purchased office furniture and equipment on credit from McKay Company, invoice mck66 dated January 9, terms 2/10, net 30, $20,499.11. (Example posted to purchases journal).

January 2, Sold merchandise on credit to John Nelson. Invoice No. 324, $7,965.37. (Terms for all credit sales are 2/10, n/30). (Example posted to sales journal).

January 3, Purchased on credit from Corsair Company office supplies, $1224.54, invoice xx12 dated January 3, due in 30 days. Supplies are expected to last for approximately 4 months.

January 3, Received merchandise and invoice F1 dated Jan 1, terms 2/10, n/30; from Farnswood Company, $213,022.22.

January 3, Sold merchandise on credit to Thomas Zak, Invoice no 325, $4,666.88.

January 10, Sent Farnswood Company Check no. 876 in payment of its January 1 invoice less the discount.

January 10, Sold merchandise on credit to Margo Edwards, Invoice no. 326, $8,375.21.

January 11. Sold merchandise on credit to Ken Duclose, Invoice no. 327, $5,554.23

January 12, Received payment from John Nelson for the January 2 sales less the discount check number 4444. (Example posted to cash receipts journal).

January 13, Received payment from Thomas Zak for the January 3 sales less the discount check number 12345.

January 15, Issued check no. 877 payable to payroll, in payment of sales salaries for the first half of the month, $7,950.00. Cashed the check and paid the employees.

January 15, Cash sales for the first half of the month were $77,341.22. (Normally cash sales are posted daily, but for the purposes of this problem you are going to post them all at once.)

January 19, Received payment from Margo Edwards for the sale of January 10 less the discount check number 8888.

January 20, Received merchandise and invoice F2 dated Jan 19, terms 2/10, n/30; from Farnswood Company, $113,044.44.

January 27, Sold merchandise on credit to Margo Edwards, Invoice no. 328, $7,158.22

January 28, Sold merchandise on credit to Thomas Zak, Invoice no 329, $26,544.11.

January 29, Sold merchandise on credit to Heather Terry, Invoice no 330, $13,123.45.

January 31, Issued check no. 879 payable to payroll, in payment of sales salaries for the second half of the month, $7,950.00. Cashed the check and paid the employees.

January 31, Cash sales for the second half of the month were $72,345.00. (Normally cash sales are posted daily, but for the purposes of this problem, you are going to post them all at once.)

January 31, Paid for utilities (water, power, etc) to Massive Utilities Company $1,454.77 check number 880.

January 31, Paid for advertising from The Advertising Experts Inc. for January $10,500.00 check number 881

January 31, Estimated the expected life of the office furniture and equipment to be 5 years with no salvage value. The KSU Corporation will take a full month of straight-line depreciation in January.

January 31, Counted ending inventory valued at $ 196,312.00.

January 31, Counted office supplies and determined that approximately $800.00 worth of supplies were left and that the rest had been used in January.

General Journal

Date	Description/account	Post	Debit	Credit

Sales Journal

Date	Customer	Invoice Number	Terms (2/10, net 30 unless otherwise noted)	Amount	Post S/L
1/2	John Nelson	324		7965.37

Cash Receipts Journal

Date	Cash Amount	Check Number	AR	Discounts	Customer Numb	Post SL	Cash Sales
1/12	7806.06	4444	7965.37	159.31	Nelson

Purchases Journal

Date	Vendor	Invoice Date	Invoice Number	Terms (2/10, net 30 unless otherwise noted)	Purchases Debit	Office Supplies Debit	Other Accounts Debit	AP Credit	Post S/L
1/2	McKay	1/9	mck66	Due 2/8			Furniture and equipment 20499.11	20499.11

Cash Disbursements Journal

Date	Check Number	Payee	AP Debit	Account Amount Debited	Purchase Discount Taken	Cash Amount	Post S/L
Jan 1	800	Smithlord		Rent Exp 10000.00		10000.00

General Ledger

Cash			AD-Equipment			Sales			Payroll Expense

AR			AP			Sales Discounts			Depreciation Expense

Inventory			Notes Payable			Purchase Discounts			Supplies Expense

Purchases			Common Stock			Utilities Expense			COGS

Furn and Equipment			Supplies			Rent Expense			Advertising expense

Accounts Receivable Sub-Ledger

Nelson Zak Edwards

Duclose Terry

Accounts Payable Sub-Ledger

Farnswood Corsair McKay

Trial Balance

Account	Debit	Credit

Income Statement:

Balance Sheet:

Schedule of AR

Schedule of AP