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) Post to the accounts receivable and accounts payable subsidiary ledgers. (Post entries in the order of entries presented in the previous Accounts Receivable Subsidiary Ledger Dow Co. Date Explanation Ref. Debit Credit Balance S1 # CR1 H. Kenney Date Explanation Ref. Debit Credit Balance si W. Leiss Date Explanation Ref. Debit Credit Balance S1 CR1 S. Goebel Date Explanation Ref. Debit Credit Balance Si + 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