Sun & Surf Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Sun & Surf are indicated in the working papers. Below are a series of transactions for Sun & Surf Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 55% of the sales price.

General Ledger 1

Cash 01/01 37,150 #101

Accounts Receivable 13,000 # 112

Notes Receivable 39,0000 #115

Inventory 01/01 17,795 #120

Office Supplies 01/01 1,200 #125

Prepaid Insurance 01/01 2,205 #130

General Ledger 2

Equipment 01/01 6,450 #157

Accumulated Depreciation - Equipment 6,450 #158

Notes Payable 01/01 0.00 #200

Accounts Payable 01/01 35,500 #201

Intrest payable 01/01 0.00

J. Sandy Capital 01/01 80,300 #301

J. Sandy Drawing 01/01 0.00 #306

Income Summary

No. 350

Date

Explanation

Ref.

Debit

Credit

Balance

Sales

No. 401

Date

Explanation

Ref.

Debit

Credit

Balance

Sales Returns and Allowances

No. 412

Date

Explanation

Ref.

Debit

Credit

Balance

Sales Discounts

No. 414

Date

Explanation

Ref.

Debit

Credit

Balance

Cost of Goods Sold

No. 505

Date

Explanation

Ref.

Debit

Credit

Balance

Salaries and Wages Expense

No. 627

Date

Explanation

Ref.

Debit

Credit

Balance

Depreciation Expense

No. 711

Date

Explanation

Ref.

Debit

Credit

Balance

Interest Expense							No. 718
Date	Explanation			Ref.	Debit	Credit	Balance
Insurance Expense							No. 722
Date	Explanation			Ref.	Debit	Credit	Balance
Office Supplies Expense							No. 728
Date	Explanation			Ref.	Debit	Credit	Balance
Rent Expense							No. 729
Date	Explanation			Ref.	Debit	Credit	Balance

Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.

5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30. 7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.

8 Pay freight on merchandise purchased $235.

9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.

9 Issue credit of $300 to C. Ryder for merchandise returned.

10 Summary daily cash sales total $15,500. 11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828. 12 Pay rent of $1,000 for January.

13 Receive payment in full from M. Knast and C. Ryder less cash discounts.

15 Withdrawal of $800 cash by J. Sandy for personal use.

15 Post all entries to the subsidiary ledgers.

16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.

17 Pay $400 cash for office supplies.

18 Return $200 of merchandise to K. Xerxes and receive credit.

20 Summary daily cash sales total $20,100.

21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.

21 Receive payment in full from V. Arnold less cash discount.

22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.

22 Post all entries to the subsidiary ledgers.

23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.

25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.

27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.

27 Post all entries to the subsidiary ledgers.

28 Pay $275 cash for office supplies.

31 Summary daily cash sales total $21,300.

31 Pay salaries and wages of $8,100.

(a) Record the January transactions in a sales journal, a single-column purchases journal, a cash receipts journal, a cash payments journal, and a two-column general journal.

(b) Post the journals to the general ledger.

(c) Prepare a trial balance at January 31, 2017, in the trial balance columns of the worksheet. Complete the worksheet using the following additional information.

1. Office supplies at January 31 total $900.

2. Insurance coverage expires on September 30, 2017.

3. Annual depreciation on the equipment is $1,500.

4. Interest of $50 has accrued on the note payable.

(d) Prepare a multiple-step income statement and an owner's equity statement for January and a classified balance sheet at the end of January.

(e) Prepare and post adjusting and closing entries.

(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.