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Selected accounts from the chart of accounts of Fornelli Co. are shown below. 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 Presented below are the purchases and cash payments journals for Fornelli Co. for its first month of operations. PURCHASES JOURNAL P1 Inventory Dr. Date Account Credited Ref. Accounts Payable Cr. July 4 N. Alvarado 6,380 5 F. Rees 8,600 11 J. Gallup 6,400 13 C. Werly 16,100 20 M. Mangus 7,530 45,010 CASH PAYMENTS JOURNAL CP1 Other Accounts Accounts Payable Inventory Cash Date Account Debited Ref. Dr. Dr. Cr. Cr. July 4 Supplies 560 560 10 F. Rees 8,600 86 8,514 11 Prepaid Rent 5,520 5,520 15 N. Alvarado 6,380 6,380 19 Owner's Drawings 2,720 2,720 21 C. Werly 16,100 161 15,939 8,800 31,080 247 39,633 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 $89,800 in cash. 6 Sell merchandise on account to Dow Co. $5,400 terms 1/10, n/30. 7 Make cash sales totaling $8,400. 8 Sell merchandise on account to S. Goebel $4,900, terms 1/10, n/30. 10 Sell merchandise on account to W. Leiss $6,000, 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 $5,400, terms 1/10, n/30. 29 Returned damaged goods to N. Alvarado and received cash refund of $410. (c) Post to the accounts receivable and accounts payable subsidiary ledgers. (Post entries in the order of entries presented in the previous par Accounts Receivable Subsidiary Ledger Dow Co. Date Explanation Ref. Debit Credit Balance S1 CR1 H. Kenney Date Explanation Ref. Debit Credit Balance S1 W. Leiss Date Explanation Ref. Debit Credit Balance S1 CR1 S. Goebel Date Explanation Ref. Debit Credit Balance S1 CR1 Accounts Payable Subsidiary Ledger C. Werly Date Explanation Ref. Debit Credit Balance P1 CP1 F. Rees Date Explanation Ref. Debit Credit Balance P1 CP1 M. Mangus Date Explanation Ref. Debit Credit Balance P1 N. Alvarado Date Explanation Ref. Debit Credit Balance P1 CP1 J. Gallup Date Explanation Ref. Debit Credit Balance P1