Problem 7-5A (Part Level Submission) 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. Alva do 7,270 5 F. Rees 8,000 11 J. Gallup 5,680 13 C. Werly 15,100 20 M. Mangus 7,850 43,900 CASH PAYMENTS JOURNAL CP1 Other Accounts Accounts Payable Inventory Cash Date Account Debited Ref. Dr. Dr. Cr. Cr. July 4 Supplies 630 630 10 F. Rees 8,000 80 7,920 6,060 6,060 7,270 11 Prepaid Rent 15 N. Alvarado 19 Owner's Drawings 21 C. Werly 7,270 2,130 2,130 15,100 151 14,949 8,820 30,370 231 38,959 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 $71,200 in cash. 6 Sell merchandise on account to Dow Co. $5,700 terms 1/10, n/30. 7 Make cash sales totaling $7,600. 8 Sell merchandise on account to S. Goebel $5,500, terms 1/10, n/30. 10 Sell merchandise on account to W. Leiss $5,900, 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, n/30. 29 Returned damaged goods to N. Alvarado and received cash refund of $340. (b) Your answer is correct. Journalize the transactions that have not been journalized in the sales journal and the cash receipts journal. (Record entries in the order displayed in the problem statement.) Sales Journal Date Account Debited Ref. S1 Accounts Receivable Dr. Cost of Goods Sold Dr. Sales Revenue Cr. Inventory Cr. M 5700 3705 July 6 Dow Co. July 8 S. Goebel 5500 3575 July 10 W. Leiss 5900 3835 July 21 H. Kenney 5000 3250 M 22100 14365 (112)(401) (505)(120) Cash Receipts Journal CR1 Cost of Goods Sold Dr. Inventory Cr. Date Account Credited Ref. Cash Dr. Sales Discounts Dr. Accounts Receivable Cr. Sales Revenue Cr. Other Accounts Cr. July 1 . Owner's Capital 301 71200 71200 July 7 7600 7600 4940 July 13 S. Goebel V 5445 55 5500 July 16 W. Leiss 5841 59 5900 | July 20 IT Dow Co. V 5700 5700 July 29 IT Inventory 120 340 340 96126 114 17100 7600 71540 4940 (101) (414) (112) (401) (505)(120) SHOW LIST OF ACCOUNTS SHOW ANSWER LINK TO TEXT LINK TO TEXT Your answer is correct. Post to the accounts receivable and accounts payable subsidiary ledgers. (Post entries in the order of entries presented in the previous part.) Accounts Receivable Subsidiary Ledger Dow Co. Date Explanation Ref. Debit Credit Balance July 6 S1 5700 5700 July 20 CR1 5700 H. Kenney Date Explanation Ref. Debit Credit Balance T July 21 S1 5000 5000 W. Leiss Date Explanation Ref. Debit Credit Balance July 10 S1 5900 5900 July 16 : CR1 5900 S. Goebel Date Explanation Ref. Debit Credit Balance July 8 S1 5500 5500 July 13, CR1 5500 Accounts Payable Subsidiary Ledger C. Werly Date Explanation Ref. Debit Credit Balance July 13 P1 15100 15100 July 21 : CP1 15100 F. Rees Explanation Ref. Debit Credit Balance Date July 5 . P1 8000 8000 July 10 CP1 8000 M. Mangus Date Explanation Ref. Debit Credit Balance T July 20 P1 7850 7850 N. Alvarado Date Explanation Ref. Debit Credit Balance 7270 July 4 - P1 7270 July 15 CP1 7270 J. Gallup Date Explanation Ref. Debit Credit Balance July 11 P1 5680 5680 SHOW LIST OCCOUNTS SHOW ANSWER (d) Your answer is correct. Post the individual entries and totals to the general ledger. (Post entries in the order of entries presented in the previous part.) Cash No. 101 Balance Date Explanation Ref. Debit Credit July 31 CR1 96126 96126 July 31 CP1 38959 57167 No. 112 Accounts Receivable Date Explanation Ref. Debit Credit Balance July 31 S1 22100 22100 July 31 CR1 17100 5000 No. 102 Inventory Date Explanation Ref. Debit Credit Balance July 31 P1 43900 43900 July 29 CR1 340 43560 July 31 CP1 231 43329 July 31 S1 14365 28964 July 31 CR1 4940 24024 No. 127 Supplies Date Explanation Ref. Debit Credit Balance July 4 CP1 630 630 131 Prepaid Rent Date Explanation Ref. Debit Credit Balance July 11 CP1 6060 6060 No. 201 Accounts Payable Date Explanation Ref. Debit Credit Balance July 31 P1 43900 43900 July 31 CP1 30370 13530 No. 301 Owner's Capital Date Explanation Ref. Debit Credit Balance July 1 CR1 71200 71200 No. 306 Owner's Drawings Date Explanation Ref. Debit Credit Balance July 19 CP1 21301 2130 No. 401 Sales Revenue Date Explanation Ref. Debit Credit Balance July 31 S1 22100 22100 July 31 CR1 7600 29700 Sales Discounts No. 414 Date Explanation Ref. Debit Credit Balance July 31 CR1 114 114 Cost of Goods Sold No. 505 Date Explanation Ref. Debit Credit Balance July 31 S1 14365 14365 July 31 CR1 4940 19305 SHOW LIST OF ACCOUNTS SHOW ANSWER (e) Your answer is correct. Prepare a trial balance at July 31, 2017. FORNELLI CO. Trial Balance July 31, 2017 Debit Credit Cash 57167 $ Accounts Receivable 5000 Inventory 24024 Supplies 630 Prepaid Rent 6060 Accounts Payable 13530 Owner's Capital 71200 Owner's Drawings 2130 Sales Revenue 29700 Sales Discounts 114 Cost of Goods Sold 19305 Totals 114430 114430 (f) Determine whether the subsidiary ledgers agree with the control accounts in the general ledger. Accounts receivable balance $ Subsidiary accounts balance $ Accounts payable balance Subsidiary accounts balance $ $