(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

Check figures:

Cash Receipts Journal, total Cash DR: $ 70,348

Cash Payments Journal, total Cash CR: 62,060

Net Income: 25,218 Total Assets: 149,568

Total Post Closing Trial Balance: 151,193

Sun & Surf Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Sun & Surf are indicated in the working papers. Below are a series of transactions for Sun & Surf Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 55% of the sales price.

Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.

5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30.

7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.

8 Pay freight on merchandise purchased $235.

9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.

9 Issue credit of $300 to C. Ryder for merchandise returned.

10 Summary daily cash sales total $15,500.

11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828.

12 Pay rent of $1,000 for January.

13 Receive payment in full from M. Knast and C. Ryder less cash discounts.

15 Withdrawal of $800 cash by J. Sandy for personal use.

15 Post all entries to the subsidiary ledgers.

16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.

17 Pay $400 cash for office supplies.

18 Return $200 of merchandise to K. Xerxes and receive credit.

20 Summary daily cash sales total $20,100.

21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.

21 Receive payment in full from V. Arnold less cash discount.

22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.

22 Post all entries to the subsidiary ledgers.

23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.

25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.

27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.

27 Post all entries to the subsidiary ledgers.

28 Pay $275 cash for office supplies.

31 Summary daily cash sales total $21,300.

31 Pay salaries and wages of $8,100. (continued)

Page 2 of 2

Instructions

(a) Record the January transactions in a sales journal, a single-column purchases journal, a cash receipts journal, a cash payments journal, and a two-column general journal.

(b) Post the journals to the general ledger.

(c) Prepare a trial balance at January 31, 2017, in the trial balance columns of the worksheet. Complete the worksheet using the following additional information.

1. Office supplies at January 31 total $900.

2. Insurance coverage expires on September 30, 2017.

3. Annual depreciation on the equipment is $1,500.

4. Interest of $50 has accrued on the note payable.

(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

General Ledger
Cash					No. 101
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 37,150
Accounts Receivable					No. 112
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 13,000
Notes Receivable					No. 115
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 39,000
Inventory					No. 120
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 17,795
Office Supplies					No. 125
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 1,200
Prepaid Insurance					No. 130
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 2,205

Equipment					No. 157
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 6,450
Accumulated Depreciation - Equipment					No. 158
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 1,500
Notes Payable					No. 200
Date	Explanation	Ref.	Debit	Credit	Balance
Accounts Payable					No. 201
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 35,000
Interest Payable
Date	Explanation	Ref.	Debit	Credit	Balance
J. Sandy, Capital					No. 301
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance				$ 80,300
J. Sandy, Drawing					No. 306
Date	Explanation	Ref.	Debit	Credit	Balance

Income Summary					No. 350
Date	Explanation	Ref.	Debit	Credit	Balance
Sales					No. 401
Date	Explanation	Ref.	Debit	Credit	Balance
Sales Returns and Allowances					No. 412
Date	Explanation	Ref.	Debit	Credit	Balance
Sales Discounts					No. 414
Date	Explanation	Ref.	Debit	Credit	Balance
Cost of Goods Sold					No. 505
Date	Explanation	Ref.	Debit	Credit	Balance
Salaries and Wages Expense					No. 627
Date	Explanation	Ref.	Debit	Credit	Balance
Depreciation Expense					No. 711
Date	Explanation	Ref.	Debit	Credit	Balance

Interest Expense					No. 718
Date	Explanation	Ref.	Debit	Credit	Balance
Insurance Expense					No. 722
Date	Explanation	Ref.	Debit	Credit	Balance
Office Supplies Expense					No. 728
Date	Explanation	Ref.	Debit	Credit	Balance
Rent Expense					No. 729
Date	Explanation	Ref.	Debit	Credit	Balance