Bishop Company completes these transactions and events during March of the current year (terms for all its credit sales are 2/10, n30):

Bishop Company completes these transactions and events during March of the current year (terms for all its credit sales are 2/10, n30):

 

Mar. 1   Purchased $42,600 of merchandise from Soy Industries, invoice dated March 1, terms 2/15,

n30.

2    Sold merchandise on credit to Min Cho, Invoice No. 854, for $15,800 (cost is $7,900).

3 Purchased $1,120 of office supplies on credit from Stacy Company, invoice dated March

3,

terms n/10 EOM.

3 Sold merchandise on credit to Lance Snow, Invoice No. 855, for $9,200 (cost is $4,600).

6 Borrowed $72,000 cash from Federal Bank by signing a long-term note payable.

9 Purchased $20,850 of office equipment on credit from Tells Supply, invoice dated March

9, terms n/10 EOM.

10 Sold merchandise on credit to Taylor Few, Invoice No. 856, for $4,600 (cost is $2,300).

12 Received payment from Min Cho for the March 2 sale less the discount.

13 Sent Soy Industries Check No. 416 in payment of the March 1 invoice less the discount.

13 Received payment from Lance Snow for the March 3 sale less the discount.

14 Purchased $31,625 of merchandise from the JW Company, invoice dated March 13, terms

210, n30.

15 Issued Check No. 417, payable to Payroll, in payment of sales salaries expense for the first

half of the month, $15,900. Cashed the check and paid the employees.

15 Cash sales for the first half of the month are $164,680 (cost is $138,000). (Cash sales are

recorded daily, but are recorded only twice here to reduce repetitive entries.)

16 Purchased $1,670 of store supplies on credit from Stacy Company, invoice dated March 16,

terms n/10 EOM.

17 Received a $2,425 credit memorandum from JW Company for the return of unsatisfactory

merchandise purchased on March 14.

19 Received a $630 credit memorandum from Tells Supply for office equipment received on

March 9 and returned for credit.

20 Received payment from Taylor Few for the sale of March 10 less the discount.

23 Issued Check No. 418 to JW Company in payment of the invoice of March 13 less the return

and the discount.

27 Sold merchandise on credit to Taylor Few, Invoice No. 857, for $13,910 (cost is $6,220).

28 Sold merchandise on credit to Lance Snow, Invoice No. 858, for $5,315 (cost is $2,280).

31 Issued Check No. 419, payable to Payroll, in payment of sales salaries expense for the last

half of the month, $15,900. Cashed the check and paid the employees.

31 Cash sales for the last half of the month are $174,590 (cost is $143,000).

31 Verify that amounts impacting customer and creditor accounts were posted and that any

amounts that should have been posted as individual amounts to the general ledger accounts

were posted. Foot and crossfoot the journals and make the month-end postings.

 

Required:

1.  Open the following general ledger accounts: Cash; Accounts Receivable; Inventory (March 1 beg.

bal. is $300,000); Office Supplies; Store Supplies; Office Equipment; Accounts Payable; Long-

Term Notes Payable; M. Bishop, Capital (March 1 beg. bal. is $300,000); Sales; Sales Discounts;

Cost of Goods Sold; and Sales Salaries Expense. Open the following accounts receivable subsidiary

ledger accounts: Taylor Few, Min Cho, and Lance Snow. Open the following accounts payable subsidiary

ledger accounts: Stacy Company, Soy Industries, Tells Supply, and JW Company.

 

2.  Enter these transactions in a sales journal like Exhibit 7.5, a purchases journal like Exhibit 7.9, a

cash receipts journal like Exhibit 7.7, a cash disbursements journal like Exhibit 7.11, or a general

journal. Number all journal pages as page 2.

 

3.  Prepare a trial balance of the general ledger and prove the accuracy of the subsidiary ledgers by

preparing schedules of both accounts receivable and accounts payable.

 

4.  Prepare the sales journal, purchase journal, cash reciepts journal, cash disbursement journal, general journal, general ledger, accounts recievable ledger, accounts payable, trial blance, schedule of accounts recievable, schedule of accounts payable.