Example of Manual Accounting (The bad old days)

XENIX Company completed these transactions during January of the current year:

January 1, Began business by selling stock for $500,000. January 1, Rented office space for 1 month using check number 800 for $10,000 to Smithlord Properties. (Example posted to cash disbursement journal). January 2, Received merchandise and invoice F1 dated Jan 1, terms 2/10, n/30; from Farnswood Company, $213,000. (Example posted to purchase journal). January 2, Sold merchandise on credit to John Nelson. Invoice No. 324, $7,900 (Terms of all credit sales are 2/10, n/30). (Example posted to sales journal). January 3, Purchased on credit from Cosair Company office supplies, $560, invoice xx12 dated January 3, due in 30 days. Supplies are expensed in January. January 3, Sold merchandise on credit to Thomas Zak, Invoice no 325, $4,600. January 9, Purchased office equipment on credit from Mckay Company, invoice mck66 dated January 9, terms 2/10, net 30, $10,400. 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, $2,300. 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. Cashed the check and paid the employees. January 15, Cash sales for the first half of the month were $67,340. (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 27, Sold merchandise on credit to Margo Edwards, Invoice no. 327, $65,400 January 28, Sold merchandise on credit to Thomas Zak, Invoice no 328, $26,500. January 31, Issued check no. 879 payable to payroll, in payment of sales salaries for the second half of the month, $7,950. Cashed the check and paid the employees. January 31, Cash sales for the second half of the month were $72,345. (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 Unified Utilities Inc. $1,450 check number 880. January 31, Paid for advertising from AdsRus for January $10,500 check number 881 January 31, Estimated the expected life of the office equipment to be 5 years with no salvage value. Using the -month convention, Xenix will take a full month of depreciation in January. January 31, Counted ending inventory valued at $ 96,312.

Instructions for completing handout 1) Enter transactions to the appropriate journals (Sales, Purchases, Cash Receipts, Cash Disbursements or General Journal). An example is shown for each special journal. a) Hint: before you begin go down the list of transaction and decide what journal it goes in. 2) Post to the appropriate subledgers and general ledger accounts. a) Hint: use the post column to keep yourself organized as to which amounts you have transferred to the ledgers. b) Hint: if there are several transactions to the same account in a special journal, you only have to transfer the total to the general ledger. 3) Prepare a trial balance 4) Prepare an income statement 5) Prepare a balance sheet. 6) Prepare schedules of AR and AP to test the accuracy of the subledgers.

PLEASE COMPLETE ALL THE REQUIREMENTS!!!

PLEASE COMPLETE ALL THE REQUIREMENTS!!!

PLEASE COMPLETE ALL THE REQUIREMENTS!!!

General Journal Date Description account Post Debit Credit Date Customer Amount Invoice Number Sales Journal Terms (2/10, net 30 unless otherwise Post SIL noted) 01/02 John Nelson 324 7900 Cash Receipts Journal AR Discounts Date Post Cash Amount 7742 Check Number 4444 Customer Numb Nelson SL Cash Sales 1/12 7900 158 Date Vendor Invoice Date Invoice Number Office Supplies Debit Purchases Joumal Terms Purchases (2/10, net Debit 30 unless otherwise noted) 213000 Other Accounts Debit AP Credit Post S/L 1/1 Famewood 1/1 FI 213000 Cash Disbursements Journal Date Payee Check Number Account Amount Debited Purchase Discount Taken Cash Amount Post S/L Jan 1 800 Smithlord 10000 Rent Exp 10000 General Ledger Cash AP Rent Exp AR Common Payroll Exp Inventory/purchases Sales Deprec Exp Purchase Disc Sales Disc Supplies Exp Office Equip Utils Exp COGS AD-Equip Purchase Discounts Advertising Exp Accounts Receivable Sub-Ledger Nelson Zak Edwards Accounts Payable Sub-Ledger Corsair Fameworth McKay Trial Balance Account Debit Credit Income Statement: Balance Sheet: Schedule of AR Schedule of AP