Ferrara Company completes these transactions and events during March of the current year (terms of all credit sales are 2/10, n/30):

Mar.1 Received $66,600 of merchandise and an invoice dated March 1, terms 2/15, n/30, from Jerry Corp.

2Sold merchandise on credit to N. Newman, Invoice No. 854, for $28,400 (cost is$14,400).

3Purchased $1,960 of office supplies on credit from Elaine Company, invoice dated March3, terms n/10 EOM.

3 Sold merchandise on credit to D. George, Invoice No. 855, for $22,000 (cost is$12,200).

6Borrowed $138,000 cash by giving Big Bank a long-term note payable.

9Purchased $56,100 of office equipment on credit from Susan Supply, invoice dated March 9, terms n/10 EOM.

10Sold merchandise on credit to A. Cider, Invoice No. 856, for $13,320 (cost is $3,880).

12Received payment from N. Newman for the March 2 sale less the discount.

13Sent Jerry Corp Check No. 416 in payment of the March 1 invoice less the discount.

13Received payment from D. George for the March 3 sale less the discount.

14 Received $55,600 of merchandise and an invoice dated March 13, terms 2/10, n/30, from the PTK Company.

15 Issued Check No. 417, payable to Payroll, in payment of sales salaries for the first half of the month, $31,000. Cashed the check and paid the employees.

15Cash sales for the first half of the month are $71,340 (cost is $34,040). (Cash sales are recorded daily, but are recorded only twice here to reduce repetitive entries.)

16Purchased $2,120 of store supplies on credit from Elaine Company, invoice dated March 16, terms n/10 EOM.

17Received a $5,560 credit memorandum from PTK Company for unsatisfactory merchandise received on March 14 and returned for credit.

19Received a $860 credit memorandum from Susan Supply for office equipment received on March 9 and returned for credit.

20Received payment from A. Cider for the sale of March 10 less the discount.

23Issued Check No. 418 to PTK Company in payment of the invoice of March 13 less the return and the discount.

27Sold merchandise on credit to A. Cider, Invoice No. 857, for $22,200 (cost is $8,440).

28Sold merchandise on credit to D. George, Invoice No. 858, for $11,100 (cost is $8,880).

31Issued Check No. 419, payable to Payroll, in payment of sales salaries for the last half of the month, $31,000. Cashed the check and paid the employees.

31Cash sales for the last half of the month are $45,600 (cost is $21,800).

31Verify that amounts impacting customer and creditor accounts were posted, and that any amounts that should have beed posted as individual amounts to the general ledger accounts were posted. Foot and crossfoot the journals and make the month-end postings.

Required

1.Open the following general ledger accounts: Cash; Accounts Receivable; Inventory (March 1 beg. bal. is $50,000); Office Supplies; Store Supplies; Office Equipment; Accounts Payable; Long-Term Notes Payable; W. Ferrara, Capital (March 1 beg. bal. is $50,000); Sales; Sales Discounts; Cost of Goods Sold; and Sales Salaries Expense. Open the following accounts receivable ledger accounts: A. Cider, N. Newman, and D. George. Open the following accounts payable ledger accounts: Elaine Company, Jerry Corp., Susan Supply, and PTK Company.

2.Enter these transactions in a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, and a general journal.

3. Post to the general ledger at the end of the month.

4.Prepare a trial balance of the general ledger and prove the accuracy of the subsidiary ledgers by preparing schedules of both accounts receivable and accounts payable.

Attached are the worksheets. Complete the worksheets by the Ferrara Company transactions.