WRITE A JOURNAL ENTRY FOR EACH ONE :

3 March 4, 2007 Sold apparel to customer for $75.00 plus sales tax. The customer paid cash. The sales receipt number was 7030402.

4 March 4, 2007 Sold apparel to customer for $279.50 plus sales tax. The customer paid with a credit card. The sales receipt number was 7030403.

Week of March 4 - 10, 2007

This transaction is already posted as an example. You can view the two journal entries posted by opening the General Journal Entries window, and clicking the "Previous" arrow to find the entries. Do not post the entries again.

101-Cash 610-Credit Card Processing Expense

125-Credit Cards Receivable

471.17 12.08

483.25

This transaction has not been posted yet.

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5 March 5, 2007 Wrote check number 10026 to Pacific Gas & Electric for $68.30 to pay the utilities bill received and posted last month.

6 March 5, 2007 Wrote check number 10027 to AT&T for $118.73 for the telephone bill received in the mail today.

7 March 5, 2007 Sold accessories and apparel to customer for $338.98 plus sales tax. The customer paid cash. The sales receipt number was 7030501.

8 March 6, 2007 Received cash into the bank account from the credit card processing company for sales receipt number 7030403, processed on March 4, 2007.

9 March 6, 2007 Performed repairs on a surfboard and mailed invoice number 30601 for $157.50 to customer Brett Constance to bill for the services.

10 March 6, 2007 Wrote check number 10028 to Surfer's Supply for payment in full on an invoice for merchandise received and posted last month. The original amount of the invoice was 463.89. The invoice was dated February 27, 2007, with terms of the purchase 1/10, n/30. The invoice was recorded using the gross method.

Week of March 4 - 10, 2007

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11 March 6, 2007 Wrote check number 10029 to Pipeline Surfwear for payment in full on an invoice received last month. The original amount of the invoice was $285.71. The invoice was dated February 7, 2007, with terms of the purchase 2/10, n/20. The invoice was recorded using the gross method.

12 March 7, 2007 Received cash payment of $175.00 from customer Ken Bruce for surfing lessons taught last month. The customer was billed in February with invoice number 22802, for 3.5 hours of lessons.

13 March 7, 2007 Received cash payment from customer Bobby Earl for $450.00 in advance for 10 hours of surfing lessons. Bobby will begin taking lessons in April. Gave Bobby receipt number 30701 for record of his payment.

14 March 8, 2007 Taught a 1 hour surfing lesson. Provided receipt number 30801 for the customer, Budd Charles, who paid cash at the time of the lesson.

15 March 8, 2007 Purchased surfboards and accessories from vendor for $1,050.00. Paid cash at the time of purchase for invoice number CCB1298.

16 March 9, 2007 Sold apparel to customer for $252.26 plus sales tax. The customer paid with a credit card. The sales receipt number was 7030901.

Week of March 4 - 10, 2007

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17 March 9, 2007 Purchased $194.65 of store supplies on account from Premier Distributing. The invoice number was PD897 and the terms were Net 15.

18 March 10, 2007 Taught a 4 hour surfing lesson to Madeline Taylor. Prepared invoice number 31001. She will pay later.

19 March 10, 2007 Sold 3 surfboards and accessories for $1,132.50 plus tax. The customer paid with a credit card. The sales receipt number was 7031001.

20 March 10, 2007 After two months of successful operations, the board of directors met and declared $4,000 of dividends, which would be paid to the stockholders at the end of the month. Ref: Div 3/10/07

1 March 11, 2007 Received cash into the bank account from the credit card processing company for sales receipt number 7030901, processed on March 9, 2007.

2 March 11, 2007 Purchased merchandise on account from Central Coast Boarding. Central Coast Boarding provided invoice number CCB1335 totaling $1,648.50. Terms of the purchase are 2/10, n/30.

3 March 11, 2007 Wrote check number 10030 for $174.00 to pay the February bill from Law Office of C. Brown for services provided on account.

4 March 12, 2007 Taught 6 hours of surfing lessons to a customer who had paid in advance during February (sales receipt number 21402) at the special discounted rate of $45 per hour.

5 March 12, 2007 Received cash into the bank account from the credit card processing company for sales receipt number 7031001, processed on March 10, 2007.

6 March 12, 2007 Received payment of $145.00 on invoice number 7022403 from customer Mike Joseph for repair services performed on account during February.

Week of March 11 - 17, 2007

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7 March 13, 2007 Returned $500 of damaged merchandise from the purchase on March 11, 2007 to Central Coast Boarding, invoice number CCB1335.

8 March 14, 2007 Sold apparel and accessories to customer for $595.00 plus sales tax. The customer paid with cash. The sales receipt number was 7031401.

9 March 14, 2007 Sold surfboards to customer for $836.50 plus sales tax. The customer paid with a credit card. The sales receipt number was 7031402.

10 March 15, 2007 Taught 5 hours of surfing lessons on account for customer Jonathon Richards. Provided the customer with invoice number 31501 for the services.

11 March 15, 2007 Received payment in full on invoice number 31001 from Madeline Taylor.

12 March 15, 2007 Received partial payment of $175.00 on invoice 21703 from customer David Linthon for services provided on account during February.

Week of March 11 - 17, 2007

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13 March 16, 2007 Received cash into the bank account from the credit card processing company for sales receipt number 7031402, processed on March 14, 2007.

14 March 16, 2007 Customer, Allison Paige, paid $450.00 with a credit card for 10 hours of surfing lessons to begin during the summer. Provided the customer with receipt number 31601.

15 March 16, 2007 Wrote check number 10031 for $235.00 to Scanlan Accounting Services for accounting services provided today.

16 March 16, 2007 Wrote check number 10032 to pay two weeks of wages to the store clerk, totaling $800.00 for the time period 2/26 - 3/11. The store clerk works Monday through Friday and gets paid $80.00 per day. Three days of wages were accrued at the end of February.

17 March 16, 2007 Purchased additional inventory from Surfer's Supply on account. Surfer's Supply provided invoice number SS9241 totaling $675.90 with terms 1/10, n/30. The merchandise was sent FOB shipping point. The responsible party will pay SLO Delivery & Trucking for delivery services directly.

18 March 17, 2007 Merchandise purchased from Surfer's Supply yesterday arrived. The responsible party paid $62.00 cash to SLO Delivery & Trucking for shipment number SLO3846.

Week of March 11 - 17, 2007

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19 March 17, 2007 Purchased $98.50 of store supplies on account from Premier Distributing. The invoice number was PD938 and the terms were Net 15, FOB Destination. The responsible party paid $25.00 cash to SLO Delivery & Trucking.

20 March 17, 2007 Replenished the petty cash fund by writing check number 10033 for $88.75. The petty cash box contained two receipts as follows: Repairs & Maintenance $55.00 and Professional Fees $35.00.

EXTRA INFO

101 Cash This account is used for all cash and check transactions and includes amounts in the bank account and on hand at the store.

102 Petty Cash This account is used for the small petty cash fund the company has established. The petty cash fund is $100 and is maintained on the imprest basis.

115 Certificate of Deposit This account is used to record the company's investment in the Certificate of Deposit (CD). The company put $8,000 into the CD on February 1, 2007. The CD has a 6% annual rate of interest and an 18 month term to maturity.

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120 Accounts Receivable This account is used to record amounts due from customers.

125 Credit Cards Receivable This account is used to record amounts due from the credit card processing company when a customer pays via credit card. Approximately 2-3 days after a customer pays with a credit card, cash is received into the bank account, at which time the receivable should be relieved and the receipt of the cash should be recorded. The credit card processing company charges a 2.5% fee on each transaction and deducts the fee from the amount deposited to the bank account.

130 Interest Receivable This account is used to record interest due to the company but not yet received.

150 Merchandise Inventory This account is used to record all of the store's inventory, including surfboards, accessories and apparel. All product costs, including transportation-in go into this account. The account is debited for purchases of inventory and credited following the sale of inventory. (See also: Cost of Goods Sold.)

160 Prepaid Advertising This account is debited when advertising costs are paid more than one month in advance. The account is adjusted at the end of each month. Advertising services for the year have been paid in advance, totaling $1,500.00.

161 Prepaid Insurance This account is debited when insurance premiums are paid more than one month in advance. The account is adjusted at the end of each month. Insurance premiums for the entire year totaling $1,920.00 were paid in advance in January.

162 Prepaid Rent This account is debited when rent is paid for a future month. The account is adjusted at the end of each month. Rent totaling $5,400.00 was paid in January for the first quarter of 2007.

170 Store Supplies This account is used for the purchase of all store supplies. The account is adjusted at the end of each month to reflect the amount of supplies on hand and expense the supplies that have been consumed.

180 Equipment This account is used to record the purchase of fixed assets. The company purchased $5,360.00 of equipment on January 1, 2007. The equipment has an expected life of 5 years. The salvage value is estimated to be $800.00.

185 Furniture & Fixtures This account is used to record the purchase of fixed assets. The company purchased $4,532.00 of equipment on January 1, 2007. The furniture & fixtures have an expected life of 7 years. The salvage value is estimated to be $500.00.

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LIABILITIES 210 Dividends Payable

This account is used for dividends that are declared but not yet paid to stockholders.

240 Sales Tax Payable This account is credited for sales tax collected from customers on all merchandise sales (surfboards, accessories and apparel). The sales tax rate is 7.75%. Sales tax is not charged for repair services or lessons. Sales tax remains payable until remitted to the State Board of Equalization at a later date.

260 Unearned Revenue This account is used record payments from customers for lessons before revenue has been earned. When the revenue is earned, it should be debited from this account and recognized in the appropriate revenue account.

280 Notes Payable This account is used to record amounts borrowed from the bank and other sources of financing from creditors. The company borrowed $30,000.00 at 8.5% from Central Coast Credit Union on January 1, 2007.

REVENUE

401 Sales Revenue This account is used to record the sale of merchandise (surfboards, accessories or apparel) to customers.

410 Lesson Revenue This account is used to record revenue from teaching surfing lessons. Customers are charged a rate of $50.00 per hour for lessons. Customers can pay in advance for 10 hours of lessons for only $450.00. Revenue should not be recognized until it is earned.

420 Repair Revenue This account is used to record revenue from surfboard repairs.

COST OF GOODS SOLD

501 Cost of Goods Sold This account is debited for the cost of merchandise sold. All merchandise is sold at a 100% mark-up over its cost. Each merchandise sales transaction should be followed by an entry debiting this account and crediting Merchandise Inventory.

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EXPENSES

601 Advertising Expense This account is used for advertising expenses incurred in the current month. Advertising costs paid in advance should be debited to Prepaid Advertising.

607 Cash Over / Short This account is used for small, immaterial discrepancies, usually arising in relation to petty cash transactions.

610 Credit Card Processing Expense This account is used to record fees related to accepting payment from customers via credit card. The credit card processing company charges a 2.5% processing fee on each transaction, which is deducted from the amount deposited to the bank account. There is an additional monthly fee that gets recorded at the end of the month from data on the bank statement.

612 Delivery Expense This account is used to record costs incurred when shipping merchandise to customers. This could also be called "transportation-out."

615 Depreciation Expense, Equipment This account is used to record depreciation adjustments. Depreciation expense is calculated using the straight-line method and is recorded monthly.

616 Depreciation Expense, Furniture & Fixtures This account is used to record depreciation adjustments. Depreciation expense is calculated using the straight-line method and is recorded monthly.

620 Insurance Expense This account is used to record adjustments for insurance expiring in the current month. Insurance premiums paid in advance should be debited to Prepaid Insurance.

630 Rent Expense This account is used for rent in the current month. Rent paid in advance should be debited to Prepaid Rent.