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. Alvarado 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 11 Prepaid Rent 6,060 6,060 15 N. Alvarado 7,270 7,270 19 Owner's Drawings 2,130 2,130 21 C. Werly 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, 1/30. 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 s1 Accounts Receivable Dr. Cost of Goods Sold Dr. Ref. . Sales Revenue Cr. Inventory Cr. Date Account Debited July 6 Dow Co. + 5700 3705 July 8 S. Goebel 5500 3575 July 10 W. Leiss 5900 3835 July 21 H. Kenney 5000 3250 22100 14365 (112)(401) (505)(120) Cash Receipts Journal CR1 Date Cost of Goods Sold Dr. Inventory Cr. 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 5445 55 5500 July 16 W. Leiss . 5841 59 5900 July 20 IT Dow Co. 5700 5700 July 29 Inventory 120 340 340 96126 114 17100 7600 71540 4940 (101) (414) (112) (401) (X) (505)(120) SHOW LIST OF ACCOUNTS SHOW ANSWER LINK TO TEXT LINK TO TEXT (c) 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 Si 5700 5700 T July 20 CR1 5700 H. Kenney Date Explanation Ref. Debit Credit Balance July 21 A S1 5000 5000 W. Leiss Date Explanation Ref. Debit Credit Balance | July 10 Si 5900 5900 CR1 5900 | July 16 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 151001 15100 July 21 CP1 151001 F. Rees Date Explanation Ref. Debit Credit Balance July 5 P1 8000 8000 CP1 8000 July 10 M. Mangus Date Explanation Ref. Debit Credit Balance July 20 P1 7850 7850 N. Alvarado Date Explanation Ref. Debit Credit Balance July 4 P1 7270 7270 T July 15 CP1 7270 J. Gallup Date Explanation Ref. Debit Credit Balance | July 11 P1 5680 5680 SHOW LIST OF ACCOUNTS SHOW ANSWER (d) 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 Date Explanation Ref. Debit Credit Balance July 31 CR1 July 31 CP1 Accounts Receivable Date Explanation Ref. No. 112 Balance Debit Credit July 31 S1 July 31 CR1 No. 102 Inventory Date Explanation Ref. Debit Credit Balance July 31 P1 July 29 CR1 July 31 CP1 July 31 S1 July 31 CR1 Supplies Date Explanation Ref. No. 127 Balance Debit Credit July 4 CP1 No. 131 Balance Debit Credit Prepaid Rent Date Explanation Ref. July 11 CP1 Accounts Payable Date Explanation Ref. No. 201 Balance Debit Credit July 31 P1 July 31 CP1 Owner's Capital Date Explanation Ref. July 1 CR1 No. 301 Balance Debit Credit Owner's Drawings Date Explanation Ref. No. 306 Balance Debit Credit July 19 CP1 Sales Revenue Date Explanation Ref. No. 401 Balance Debit Credit July 31 S1 July 31 CR1 Sales Discounts Date Explanation Ref. No. 414 Balance Debit Credit July 31 CR1 Cost of Goods Sold Date Explanation Ref. No. 505 Balance Debit Credit July 31 S1 July 31 CR1