P7-5A Presented below are the purchaes and cash payments journals for Fornelli Co. for its first month of operations.

P7-5A Presented below are the purchases and cash payments journals for Fornelli Co, for its first month of operations. Date July 4 PURCHASES JOURNAL Inventory Dr. Account Credited Ref. Accounts Payable Cr. N. Alvarado 6,800 F. Rees 8,100 J. Gallup 5,920 C. Werly 15,300 M. Mangus 7,900 44,020 11 13 20 CP1 Cash Cr. Date July 4 10 CASH PAYMENTS JOURNAL Other Accounts Account Accounts Payable Debited Ref. Dr. Dr. Supplies 600 F. Rees 8,100 Prepaid Rent 6,000 N. Alvarado 6,800 Owner's Drawings 2,500 C. Werly 15,300 9,100 30,200 81 Cr. 600 8,019 6,000 6,800 2,500 15,147 39,066 19 21 7-2 In addition, the following transactions have not been journalized for July. The cost of all merchandise sold was 65% of the sales price. July 1 The founder, N. Fornelli, invests $80,000 in cash. Homework 6 Sell merchandise on account to Dow Co. $6,200 terms 1/10, n/30. 7 Make cash sales totaling $8,000. 8 Sell merchandise on account to S. Goebel $4,600, terms 1/10, n/30. 10 Sell merchandise on account to W. Leiss $4,900, terms 1/10, n/30. 13 Receive payment in full from S. Goebel. 16 Receive payment in full from W. Leiss. 20 Receive payment in full from Dow Co. 21 Sell merchandise on account to H. Kenney $5,000, terms 1/10, 1/30. 29 Returned damaged goods to N. Alvarado and received cash refund of $420. Instructions (a) Open the following accounts in the general ledger. 101 Cash 306 Owner's Drawings 112 Accounts Receivable 401 Sales Revenue 120 Inventory 414 Sales Discounts 126 Supplies 505 Cost of Goods Sold 131 Prepaid Rent 631 Supplies Expense 201 Accounts Payable 729 Rent Expense 301 Owner's Capital (b) Journalize the transactions that have not been journalized in the sales journal and the cash receipts journal (see Illustration 7-9). (c) Post to the accounts receivable and accounts payable subsidiary ledgers. Follow the sequence of transactions as shown in the problem. (d) Post the individual entries and totals to the general ledger (e) Prepare a trial balance at July 31, 2017 (1) Determine whether the subsidiary ledgers agree with the control accounts in the general ledger. (g) The following adjustments at the end of July are necessary (1) A count of supplies indicates that $140 is still on hand. (2) Recognize rent expense for July, $500. Prepare the necessary entries in the general journal. Post the entries to the general ledger. (h) Prepare an adjusted trial balance at July 31, 2017. (b) Sales journal total 520,700 Cash receipts journal balancing totals $104,120 (e) Totals $122.520 (1) Accounts Receivable 55,000 Accounts Payable $13,820 7 (h) Totals $122.520