Question 3 [45]

SUBSIDIARY JOURNALS

Mr Michael runs a successful stationery shop, Dell Dealers. The entity used the perpetual

system to record inventory and all inventories are sold at a 25% markup on cost. The following

information was available for July 2020. Dell Dealers is not a registered VAT vendor.

1. Mr Michael increased his capital contribution from R150 000 to R250 000, depositing the

funds in the bank account of Dell Dealers.

2. Paid rent to ICT Properties for July 2020, R6 500 (cheque 62).

Bought inventory on credit from Transcent Stationers, R28 750 (invoice 7951).

6. Sold inventory on credit to Chloe, R21 000. Issued invoice no. INV561.

10. Sold inventory for cash, R27 500 (receipt R153).

Received a cheque from Chloe as payment on his account, R10 500. This was deposited

with the cash sales. Issued receipt no. R154. (The balance owed by Chloe on 1 July 2020

was R22 000.)

13. Cashed cheque no. 63 for wages, R2 225.

17. Sold inventory for cash, R23 250 (receipt R155).

Bought inventory on credit from Terabyte, R31 687 (invoice T638).

Purchased inventory from Passport, R26 728 (cheque no. 64).

20. Sold inventory on credit to Andr, R6 300. Issued invoice no. INV562.

24. Issued cheque no. 65 to Elite Suppliers for inventory, R91 836.

25. Sold inventory for cash, R25 200 (receipt R156).

Received a cheque from Chloe in full settlement of his account. This was deposited with

the cash sales. Issued receipt no. R157.

Issued cheque no. 66 to Transcent Stationers, R15 500, being payment on the account.

30. Issued cheque no. 67 to Terabyte, being payment of the full account. The entity did not

owe Terabyte any amounts at the beginning of this period.

Sold inventory on credit to Terrence, R11 625. Issued invoice no. INV563.

Bought a computer for the office from HDMI on credit for R25 250, as well as inventory

for R6 950 (invoice P520).

Required:

Record the transactions for July 2020 in the following subsidiary journals:

3.1. Cash Receipts Journal (16)

3.2. Cash Payments Journal (10)

3.3. Debtors/Sales Journal (6)

3.4. Creditors/Purchases Journal (5)

3.5. Debtors Ledger for Chloe