I first put the instructions of the problem then put pictures of the journals. Please ask any questions. thanks
Chippewa Valley Photo, Inc.
Company Profile
Chippewa Valley Photo, Inc. is a photography supply store located in Eau Claire, Wisconsin. This business is newly established and was incorporated in the State of Wisconsin. You are the new accountant and are responsible for recording transactions and preparing financial statements for December of the current year.
Books of Accounts
Chippewa Valley Photo, Inc. uses a General Journal only. In addition, it uses the following ledgers: General, Accounts Receivable, Accounts Payable and Merchandise Inventory.
General Instructions
- Merchandise Inventory: CVPI uses the perpetual inventory system and FIFO method of inventory valuation. At the beginning of December, no merchandise inventory is on hand. Each time merchandise inventory is received the information must be posted to the Merchandise Inventory Subsidiary Ledger. CVPI keeps 7 inventory items available for sale:
| ITEM | DESCRIPTION |
| H2411 | HP SCAN-JET 5300 |
| H3411 | HP SCAN-JET 6390 COLOR |
| HP1315 | PHOTO QUALITY PRINTER |
| HP1215 | HP PHOTOSMART COLOR PRINTER |
| N650 | NIKON DIGITAL CAMERA |
| O2500 | OLYMPUS DIGITAL CAMERA |
| D2290 | KODAK DIGITAL CAMERA |
- Purchases: All merchandise purchases for resale are subject to terms n/30. Record all purchases and purchase returns in the Merchandise Inventory account. Each inventory item has its own inventory record and each time merchandise inventory is purchased and returned it must be posted to the appropriate inventory account in the Merchandise Inventory Subsidiary Ledger.
Returns to vendors are subtracted from the perpetual inventory record by writing a negative quantity and negative total cost into the Purchases columns.
- Sales: Sales tax of 5.5% is charged on all cash sales and sales on account to three of the four customers. Sales made to General City Hospital are not subject to sales tax because this is a nonprofit organization. Credit terms are 2/10, n/30 for General City Hospital and n/30 for all other customers.
The cost of merchandise sold must be calculated with every sale entry. It is determined by what is available for sale on the date of the sale and by using First in First Out valuation method. Merchandise Inventory Subsidiary Ledger must be updated each time merchandise inventory is sold.
Sales Returns and Allowances. Remember to record an additional entry to transfer the cost out of Cost of Merchandise Sold to Merchandise Inventory. Add the inventory returned from customers back to the perpetual inventory record by writing a negative quantity and negative total cost into the Cost of Merchandise Sold columns.
4. Postings: All journal entries must be posted from the various journals to the General Ledger. The subsidiary ledgers must be kept up-to-date each time there is a transaction that affects accounts payable, accounts receivable, or merchandise inventory.
5. Checkbook: The checkbook must be updated each time a check is issued and a deposit is made and cash balance must be maintained in the checkbook register daily.
6. Payroll: CVPI has two employees. The pay dates in December are on the 14th and the 28th. Information on withholding tax rates is listed in the Payroll Register page in the Journals and Payroll Records booklet. Employee pay rates and withholding allowances are listed in the Employees Earnings Records in the Journals and Payroll Records booklet. All wages are taxable for unemployment and FICA taxes.
Three journal entries are required each payroll period: 1) record the payroll, 2) record payments of the total net pay, and 3) record the employers payroll taxes.
Issue Check #7 to Foreign Photo Supply for invoice #444, dated December 1. Cash payments & checkbook & accounts payable (21 Issue Check #8 to Photo Equipment Unlimited for the amount due on invoices #6000 and #6101. Both invoices were dated December 1. Cash payments & checkbook & accounts payable (22)Dec 11 Return item purchased on invoice #23655 to Foreign Photo Supply. Purchases journal & accounts payable & inventory ledger COST Item # Description H3411 HP SCAN-JET 6390 COLOR TOTAL Quantity -1 Unit $ 540.00 Total -540.00 $-540.00 123) 1 Issue Check #9 to Foreign Photo Supply for the amount due on invoice #23655 less returned item on December 11. (24) Dec 12 was issue Check #10 to Printers Unlimited for the amount due on invoice #20455, December 2. issue 125)tz Receive payment from Mason Photo in payment of invoice #1000. 26) Dec14 Make a deposit using the deposit ticket below. Include the checks received from last deposit through today. Remember to record this deposit in the checkbook. MY Bank Eau Claire, WI Amount Chippewa Valley Photo, Inc. Cash December 14 Checks Deposit Ticket DR CR Transaction 2 GENERAL JOURNAL Post Date Account Ref 1-Dec Land 121 C/S 311 Paid in Cap in Excess of Par 312 25.000.00 22,000.00 3,000.00 22 TT 27 Sales Tax Payable Date Invoice # Account Debited Sales CR COMS - DR Merch Inv - CR SALES JOURNAL Accounts Post Receivable Ref DR 3,692.50 1,590.00 3,871.85 CR Transaction 16 17 19 30 35 192.50 3-Dec 5-Dec 9-Dec 1000 1001 1002 Mason Photo General City Hosp Sandy Murray 3,500.00 1,590.00 3,670.00 2,220.00 1,000.00 2,660.00 201.85 36 39 Total $ 9,154.35 $ 394.35 $ 8,760.00 $ 5,880.00 Total DR 15,034.35 Total CR 15,034.35 TUILULUUUUIVIVAL Date Account Credited Post Ref Merch Invty DR Store Supplies Office Supplies DR Other Accounts Debited Store Equipt Post Ref Amount DR Transaction DR 9 124 30,000.00 Due 11-Dec 31-Dec 31-Dec Accounts Payable CR 30,000.00 3,300.00 5,270.00 2.520.00 4,710.00 5,800.00 1,000.00 12 13 14 15 18 2,300.00 1-Dec Foreigh Photo Supply 1-Dec Photo Equip Unlimited 1-Dec Photo Equip Unlimited 2-Dec Foreigh Photo Supply 2-Dec printer unlimited 6-Dec photo Equip Unlimited 5,270.00 2,520.00 4,710.00 5,800.00 32 33 34 Total $ 51,600.00 $ 18,300.00 $ 1,000.00 $ 2,300.00 $ 51.600.00 $ 18.300.00 $ 1.000.00 $ 2.300.00 $ 30,000.00 Total DR 51,600.00 Total CR 51,600.00 Check Date Accounts Payable DR Cash CR Transaction 5 1-Dec 1-Dec 1-Dec 1-Dec 1-Dec 1-Dec 6 7 CASH PAYMENTS JOURNAL Other Post Account Debited Accounts Ref DR Building 122 180,000.00 Office Equip 126 12,000.00 Organization Exp 719 450.00 Misc Admin Exp 720 20.00 Petty Cash 111 150.00 Prepaid Ins 117 1,440.00 1 2 3 4 5 6 180,000.00 12,000.00 450.00 20.00 150.00 1,440.00 10 11 12 20 21 23 24 27 27 41 43 43 45 45 45 47 194,060.00 194,060.00 Total DR 194,060.00 Total CR 194,060.00 CASH RECEIPTS JOURNAL Other Accounts Post Ref Date Sales Tax Payable Account Credited COMS DR Merch Invty CR Sales CR Accounts Receivable CR Sales Discount DR Discount on Bonds Payable DR Cash DR CR CR Deposits Transaction Transaction 1 311 100,000.00 1-Dec Common Stock Paid in Capital in excess of Par -Dec Bonds Payable 312 221 75,000.00 100,000.00 175,000.00 93,289.56 3 1 L L 6,710.44 268,289.56 1-Dec 4 25 31 40 Total $268,289.56 $0.00 $0.00 $0.00 $0.00 $0.00 $6,710.44 $268,289.56 $268,289.56 Total DR 268,289.56 Total CR 268,289.56 Treasury Stock Date 317 Post Ref BALANCE DR Act Descr DR CR ncome Summary Date 318 Post Ref BALANCE DR Act Descr DR CR Sales Date 411 Post Ref Act Descr DR C BALANCE DR R CR Sales Retums & Allowances Date Act Descr 412 Post Ref DR BALANCE DR Sales Discounts Date 413 Post Ref BALANCE DR Act Descr DR CR CR Cost of Goods Sold Date 511 Post Ref BALANCE DR Act Descr DR CR Sales Salaries Expense Date 611 Post Ref BALANCE DR Act Descr DR CR CR Store Supplies Expense Date 612 Post Ref BALANCE DR Act Descr DR CR CR Accounts Receivable Ledger GENERAL CITY HOSPITAL Date Item 5-Dec Post Ref CR DR 1,590.00 Balance 1,590.00 MASON PHOTO Date Item Item 3-Dec Sales Tax 192.50 Post Ref S DR 3,692.50 CR Balance 3,692.50 ROBOT INDUSTRIES Date Item Post Ref DR CR Balance SANDY MURRAY PHOTO Date Item 9-Dec sales tax 201.85 Post Ref DR DR 3,871.85 CR Balance 3,871.85 CHECKBOOK BANK STATEMENT BANK RECONCILIATION Number Date Payee Payment | Amount Transaction 4 Balance Deposit Amount 268,289.56 End Bal $ 38,011.50 S 74,229.56 Ck Bk Bal Add: Credits 3 1-Dec 1-Dec Rapid Builders 1-Dec Hom Furniture 1-Dec My Fav CPAS 1-Dec WDOR 1-Dec Samantha Jones 1-Dec|Best Ins 1-Dec Foreign Photo Supply 180,000.00 12,000.00 450.00 20.00 150.00 1.440.00 Deposits 1-Dec $ 268,289.56 14-Dec $ Total $ 268,289.56 4 N Deduct: Bank Fees CASH BAL 20 Service Charge $7.50 Adj. Ck Bk Bal S 74,229.56 Checks S 38.011.50 268,289.58 88,289.56 76,289.56 75,839.56 75,819.56 75,669.56 74,229.56 74,229.58 74,229.58 74,229.56 74,229.56 74,229.56 74.229,56 74.229.56 74 229.58 74.229.58 74,229.58 74.229.56 74,229.56 74,229.56 N $ $ $ Bank Bal Add: Deposits in Tran 28-Dec 180,000.00 12,000.00 450.00 20.00 150.00 1,440.00 Deduct: Out Cks $ 14 ON O (bk error) 16 Bank Error #9 Total Adj. Bank Bal S 38.011.50 13 Total $ 194,060.00 Cash Bal. S - $ 38,011.50 Accounts Payable Ledger Post Ref DR PHOTO EQUIPMENT UNLIMITED Date Item 1-Dec 1-Dec 6-Dec CR 3,300.00 5,270.00 5,800.00 Balance 3,300.00 8,570.00 14,370.00 P. FOREIGN PHOTO SUPPLY Date Item 1-Dec 2-Dec CR 30,000.00 2,520.00 Balance 30,000.00 32,520.00 PRINTERS UNLIMITED Date 2-Dec Item Post Ref DR CR 4,710.00 Balance 4,710.00 Inventory Ledger Ledge ************End of Month *********** ***********After Adiustment ************ Mer Inventory Mer Inventory COMS $ 4,480.00 COMS $ 4,480.00 $ $ Item: H2411 HP SCAN-JET 5300 Description: Purchases Unit Cost 1 150.00 Cost of Merch Sold Unit Cost Total Cost 900.00 Total Cost Date 2-Dec Date Inventory Unit Otv Cost 6 150.00 4 150.00 Date 2-Dec 5-Dec Total Cost 900.00 600.00 6 5-Dec 150.00 300.00 300.00 31-Dec 300.00 Item: H3411 Date Description: Purchases Unit Cost 1 540.00 HP SCAN-JET 6390 COLOR Cost of Merch Sold Total 1 Date Cost Qty Cost 1,620.00 1 Unit Qty Total Cost 1 Inventory Unit Qty 31 540.00 Date 2 -Dec Cost Total Cost 1.620.00 2-Dec 3 tem: HP1315 Description: Purchases Unit Date 1 tv | Cost 2-Dec 6 1 4 35.00 PHOTO QUALITY PRINTER Cost of Merch Sold Total Unit Cost Date Otv1 Cost 1 2,610.00 3-Dec 2 435.00 Total Cost1 Date | 2-Dec 3-Dec Inventory Unit Otv Cost 6 435.00 4 435.00 Total Cost 2,610.00 1,740.00 870.00 870.00 tem: HP1215 Description: Purchases Unit HP PHOTOSMART COLOR PRINTER Cost of Merch Sold Total Unit Cost Date | Otv1 Cost 2,100.00 9-Dec 4 350.00 Total Cost1 Cost Date | 2-Dec Otv 6 Inventory Unit Otv Cost 6 350.00 2 350.00 Total Cost 2,100.00 700.00 Date 2-Dec 9-Dec 1 350.00 1,400.00 Item: N650 Description: Purchases Unit Cost 420.00 Qty 6 NIKON DIGITAL CAMERA Cost of Merch Sold Total Unit Date Cost Qty Cost 2,520.00 9-Dec 3 420.00 Total Cost Date 1-Dec Date Inventory Unit Qty Cost 6 420.00 3 420.00 Total Cost 2,520.00 1,260.00 1-Dec 9-Dec 1,260.00 1,260.00 tem: O2500 Description: Purchases Unit Cost 700.00 Total Cost Date | 1-Dec OLYMPUS DIGITAL CAMERA Cost of Merch Sold Total Unit Cost 1 Date 1 otv Cost 1,400.00 5-Dec 1 700.00 3,500.00 Otv 2 Date 1 1-Dec 5-Dec 6-Dec Inventory Unit Otv Cost 2 700.00 1 700.00 6 700.00 Total Cost 1,400.00 700.00 4,200.00 | 700.00 6-Dec 5 I 700.00 700.00 tem: D2290 Total Cost Date 1-Dec Description: KODAK DIGITAL CAMERA Purchases Cost of Merch Sold Unit Total Unit Cost 1 | Cost | Date | Otv Cost 450.00 1,350.00 3-Dec 3 1 450.00 460.00 2,300.00 Qty 3 Inventory Unit | Qtv | Cost | 3 1 450 0 5 460.00 Total Cost 1350 Date | 1-Dec 3-Dec | 6-Dec 1,350.00 6-Dec 5 2300) Issue Check #7 to Foreign Photo Supply for invoice #444, dated December 1. Cash payments & checkbook & accounts payable (21 Issue Check #8 to Photo Equipment Unlimited for the amount due on invoices #6000 and #6101. Both invoices were dated December 1. Cash payments & checkbook & accounts payable (22)Dec 11 Return item purchased on invoice #23655 to Foreign Photo Supply. Purchases journal & accounts payable & inventory ledger COST Item # Description H3411 HP SCAN-JET 6390 COLOR TOTAL Quantity -1 Unit $ 540.00 Total -540.00 $-540.00 123) 1 Issue Check #9 to Foreign Photo Supply for the amount due on invoice #23655 less returned item on December 11. (24) Dec 12 was issue Check #10 to Printers Unlimited for the amount due on invoice #20455, December 2. issue 125)tz Receive payment from Mason Photo in payment of invoice #1000. 26) Dec14 Make a deposit using the deposit ticket below. Include the checks received from last deposit through today. Remember to record this deposit in the checkbook. MY Bank Eau Claire, WI Amount Chippewa Valley Photo, Inc. Cash December 14 Checks Deposit Ticket DR CR Transaction 2 GENERAL JOURNAL Post Date Account Ref 1-Dec Land 121 C/S 311 Paid in Cap in Excess of Par 312 25.000.00 22,000.00 3,000.00 22 TT 27 Sales Tax Payable Date Invoice # Account Debited Sales CR COMS - DR Merch Inv - CR SALES JOURNAL Accounts Post Receivable Ref DR 3,692.50 1,590.00 3,871.85 CR Transaction 16 17 19 30 35 192.50 3-Dec 5-Dec 9-Dec 1000 1001 1002 Mason Photo General City Hosp Sandy Murray 3,500.00 1,590.00 3,670.00 2,220.00 1,000.00 2,660.00 201.85 36 39 Total $ 9,154.35 $ 394.35 $ 8,760.00 $ 5,880.00 Total DR 15,034.35 Total CR 15,034.35 TUILULUUUUIVIVAL Date Account Credited Post Ref Merch Invty DR Store Supplies Office Supplies DR Other Accounts Debited Store Equipt Post Ref Amount DR Transaction DR 9 124 30,000.00 Due 11-Dec 31-Dec 31-Dec Accounts Payable CR 30,000.00 3,300.00 5,270.00 2.520.00 4,710.00 5,800.00 1,000.00 12 13 14 15 18 2,300.00 1-Dec Foreigh Photo Supply 1-Dec Photo Equip Unlimited 1-Dec Photo Equip Unlimited 2-Dec Foreigh Photo Supply 2-Dec printer unlimited 6-Dec photo Equip Unlimited 5,270.00 2,520.00 4,710.00 5,800.00 32 33 34 Total $ 51,600.00 $ 18,300.00 $ 1,000.00 $ 2,300.00 $ 51.600.00 $ 18.300.00 $ 1.000.00 $ 2.300.00 $ 30,000.00 Total DR 51,600.00 Total CR 51,600.00 Check Date Accounts Payable DR Cash CR Transaction 5 1-Dec 1-Dec 1-Dec 1-Dec 1-Dec 1-Dec 6 7 CASH PAYMENTS JOURNAL Other Post Account Debited Accounts Ref DR Building 122 180,000.00 Office Equip 126 12,000.00 Organization Exp 719 450.00 Misc Admin Exp 720 20.00 Petty Cash 111 150.00 Prepaid Ins 117 1,440.00 1 2 3 4 5 6 180,000.00 12,000.00 450.00 20.00 150.00 1,440.00 10 11 12 20 21 23 24 27 27 41 43 43 45 45 45 47 194,060.00 194,060.00 Total DR 194,060.00 Total CR 194,060.00 CASH RECEIPTS JOURNAL Other Accounts Post Ref Date Sales Tax Payable Account Credited COMS DR Merch Invty CR Sales CR Accounts Receivable CR Sales Discount DR Discount on Bonds Payable DR Cash DR CR CR Deposits Transaction Transaction 1 311 100,000.00 1-Dec Common Stock Paid in Capital in excess of Par -Dec Bonds Payable 312 221 75,000.00 100,000.00 175,000.00 93,289.56 3 1 L L 6,710.44 268,289.56 1-Dec 4 25 31 40 Total $268,289.56 $0.00 $0.00 $0.00 $0.00 $0.00 $6,710.44 $268,289.56 $268,289.56 Total DR 268,289.56 Total CR 268,289.56 Treasury Stock Date 317 Post Ref BALANCE DR Act Descr DR CR ncome Summary Date 318 Post Ref BALANCE DR Act Descr DR CR Sales Date 411 Post Ref Act Descr DR C BALANCE DR R CR Sales Retums & Allowances Date Act Descr 412 Post Ref DR BALANCE DR Sales Discounts Date 413 Post Ref BALANCE DR Act Descr DR CR CR Cost of Goods Sold Date 511 Post Ref BALANCE DR Act Descr DR CR Sales Salaries Expense Date 611 Post Ref BALANCE DR Act Descr DR CR CR Store Supplies Expense Date 612 Post Ref BALANCE DR Act Descr DR CR CR Accounts Receivable Ledger GENERAL CITY HOSPITAL Date Item 5-Dec Post Ref CR DR 1,590.00 Balance 1,590.00 MASON PHOTO Date Item Item 3-Dec Sales Tax 192.50 Post Ref S DR 3,692.50 CR Balance 3,692.50 ROBOT INDUSTRIES Date Item Post Ref DR CR Balance SANDY MURRAY PHOTO Date Item 9-Dec sales tax 201.85 Post Ref DR DR 3,871.85 CR Balance 3,871.85 CHECKBOOK BANK STATEMENT BANK RECONCILIATION Number Date Payee Payment | Amount Transaction 4 Balance Deposit Amount 268,289.56 End Bal $ 38,011.50 S 74,229.56 Ck Bk Bal Add: Credits 3 1-Dec 1-Dec Rapid Builders 1-Dec Hom Furniture 1-Dec My Fav CPAS 1-Dec WDOR 1-Dec Samantha Jones 1-Dec|Best Ins 1-Dec Foreign Photo Supply 180,000.00 12,000.00 450.00 20.00 150.00 1.440.00 Deposits 1-Dec $ 268,289.56 14-Dec $ Total $ 268,289.56 4 N Deduct: Bank Fees CASH BAL 20 Service Charge $7.50 Adj. Ck Bk Bal S 74,229.56 Checks S 38.011.50 268,289.58 88,289.56 76,289.56 75,839.56 75,819.56 75,669.56 74,229.56 74,229.58 74,229.58 74,229.56 74,229.56 74,229.56 74.229,56 74.229.56 74 229.58 74.229.58 74,229.58 74.229.56 74,229.56 74,229.56 N $ $ $ Bank Bal Add: Deposits in Tran 28-Dec 180,000.00 12,000.00 450.00 20.00 150.00 1,440.00 Deduct: Out Cks $ 14 ON O (bk error) 16 Bank Error #9 Total Adj. Bank Bal S 38.011.50 13 Total $ 194,060.00 Cash Bal. S - $ 38,011.50 Accounts Payable Ledger Post Ref DR PHOTO EQUIPMENT UNLIMITED Date Item 1-Dec 1-Dec 6-Dec CR 3,300.00 5,270.00 5,800.00 Balance 3,300.00 8,570.00 14,370.00 P. FOREIGN PHOTO SUPPLY Date Item 1-Dec 2-Dec CR 30,000.00 2,520.00 Balance 30,000.00 32,520.00 PRINTERS UNLIMITED Date 2-Dec Item Post Ref DR CR 4,710.00 Balance 4,710.00 Inventory Ledger Ledge ************End of Month *********** ***********After Adiustment ************ Mer Inventory Mer Inventory COMS $ 4,480.00 COMS $ 4,480.00 $ $ Item: H2411 HP SCAN-JET 5300 Description: Purchases Unit Cost 1 150.00 Cost of Merch Sold Unit Cost Total Cost 900.00 Total Cost Date 2-Dec Date Inventory Unit Otv Cost 6 150.00 4 150.00 Date 2-Dec 5-Dec Total Cost 900.00 600.00 6 5-Dec 150.00 300.00 300.00 31-Dec 300.00 Item: H3411 Date Description: Purchases Unit Cost 1 540.00 HP SCAN-JET 6390 COLOR Cost of Merch Sold Total 1 Date Cost Qty Cost 1,620.00 1 Unit Qty Total Cost 1 Inventory Unit Qty 31 540.00 Date 2 -Dec Cost Total Cost 1.620.00 2-Dec 3 tem: HP1315 Description: Purchases Unit Date 1 tv | Cost 2-Dec 6 1 4 35.00 PHOTO QUALITY PRINTER Cost of Merch Sold Total Unit Cost Date Otv1 Cost 1 2,610.00 3-Dec 2 435.00 Total Cost1 Date | 2-Dec 3-Dec Inventory Unit Otv Cost 6 435.00 4 435.00 Total Cost 2,610.00 1,740.00 870.00 870.00 tem: HP1215 Description: Purchases Unit HP PHOTOSMART COLOR PRINTER Cost of Merch Sold Total Unit Cost Date | Otv1 Cost 2,100.00 9-Dec 4 350.00 Total Cost1 Cost Date | 2-Dec Otv 6 Inventory Unit Otv Cost 6 350.00 2 350.00 Total Cost 2,100.00 700.00 Date 2-Dec 9-Dec 1 350.00 1,400.00 Item: N650 Description: Purchases Unit Cost 420.00 Qty 6 NIKON DIGITAL CAMERA Cost of Merch Sold Total Unit Date Cost Qty Cost 2,520.00 9-Dec 3 420.00 Total Cost Date 1-Dec Date Inventory Unit Qty Cost 6 420.00 3 420.00 Total Cost 2,520.00 1,260.00 1-Dec 9-Dec 1,260.00 1,260.00 tem: O2500 Description: Purchases Unit Cost 700.00 Total Cost Date | 1-Dec OLYMPUS DIGITAL CAMERA Cost of Merch Sold Total Unit Cost 1 Date 1 otv Cost 1,400.00 5-Dec 1 700.00 3,500.00 Otv 2 Date 1 1-Dec 5-Dec 6-Dec Inventory Unit Otv Cost 2 700.00 1 700.00 6 700.00 Total Cost 1,400.00 700.00 4,200.00 | 700.00 6-Dec 5 I 700.00 700.00 tem: D2290 Total Cost Date 1-Dec Description: KODAK DIGITAL CAMERA Purchases Cost of Merch Sold Unit Total Unit Cost 1 | Cost | Date | Otv Cost 450.00 1,350.00 3-Dec 3 1 450.00 460.00 2,300.00 Qty 3 Inventory Unit | Qtv | Cost | 3 1 450 0 5 460.00 Total Cost 1350 Date | 1-Dec 3-Dec | 6-Dec 1,350.00 6-Dec 5 2300)
