Matrix Toy Company sells toys and games to retail stores. The firm offers a trade discount of 40 percent on toys and 30 percent on games. Its credit sales and sales returns and allowances transactions for August 2019 are shown below. The general ledger accounts used to record these transactions are listed below. The balance shown for Accounts Receivable is as of the beginning of August. All customers have n/45 credit terms. GENERAL LEDGER ACCOUNTS

111	Accounts Receivable, $78,410 Dr.
401	Sales
451	Sales Returns and Allowances

DATE			TRANSACTIONS
August	1		Sold toys to Bombay's Department Store; issued Invoice 1001, which shows a list price of $19,500 and a trade discount of 40 percent.
	5		Sold games to the Reader's Bookstores; issued Invoice 1002, which shows a list price of $21,250 and a trade discount of 30 percent.
	9		Sold games to the Super Game Center; issued Invoice 1003, which shows a list price of $7,500 and a trade discount of 30 percent
	14		Sold toys to the Little Annie's Toy Store; issued Invoice 1004, which shows a list price of $26,400 and a trade discount of 40 percent.
	18		Accepted a return of all the games shipped to the Super Game Center because they were damaged in transit; issued Credit Memo 151 for the original sale made on Invoice 1003 on August 9.
	22		Sold toys to The Game Store; issued Invoice 1005, which shows a list price of $16,200 and a trade discount of 40 percent.
	26		Sold games to the Bombay's Department Store; issued Invoice 1006, which shows a list price of $20,600 and a trade discount of 30 percent.
	30		Sold toys to the Pinkerton Toy Center; issued Invoice 1007, which shows a list price of $22,800 and a trade discount of 40 percent.

Bombay's Department Store	$	28,900
Little Annie's Toy Store		30,500
Reader's Bookstores
Pinkerton Toy Center
Super Game Center		19,010
The Game Store

Required:

Open the general ledger accounts and enter the balance of Accounts Receivable for August 1.

Set up an accounts receivable subsidiary ledger. Open an account for each of the credit customers listed above and enter the balances as of August 1. Enter n/45 in the blank space after Terms. This means each customer has 45 days to pay for the merchandise it purchased.

Record the transactions in a sales journal and in a general journal.

Post the individual entries from the sales journal and the general journal.

Total and rule the sales journal as of August 31.

Post the column total from the sales journal to the proper general ledger accounts.

Prepare the heading and the Revenue section of the firms income statement for the month ended August 31.

Prepare a schedule of accounts receivable for August 31.

Check the total of the schedule of accounts receivable against the balance of the Accounts Receivable account in the general ledger. The two amounts should be equal.

Analyze: What is the effect on net sales if the company offers a series of trade discounts on toys (25 percent, 15 percent) instead of a single 40 percent discount?

Effect on net sales

MATRIX TOY COMPANY
Schedule of Accounts Receivable
August 31, 2019
Total

MATRIX TOY COMPANY
Income Statement (Partial)
Month Ended August 31, 2019
Revenue
Net sales

Transaction	General Journal	Debit	Credit
2

Transaction	General Journal	Debit	Credit
1

Sales Journal
Date	Sales Slip No.	Customer's Name	Accounts Receivable Dr./ Sales Cr.
Aug. 31, 2019		Total

GENERAL LEDGER
Accounts Receivable		Account No: 111			Sales		Account No: 401
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Aug. 1, 2019			78,410
Sales Returns and Allowances		Account No: 451
Date	Debit	Credit	Balance
ACCOUNTS RECEIVABLE LEDGER
Bombay's Department Store		Terms: n/45			The Game Store		Terms: n/45
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Aug. 1, 2019			28,900
Little Annie's Toy Store		Terms: n/45			Pinkerton Toy Center		Terms: n/45
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Aug. 1, 2019			30,500
Reader's Bookstore		Terms: n/45			Super Game Center		Terms: n/45
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
					Aug. 1, 2019			19,010