Response to the following problem:
Suppan Company completes these transactions during November of the current year (terms for all its credit sales are 2y10, ny30).
Nov. 1 Purchased $5,062 of office equipment on credit from Blix Supply, invoice dated November 1, terms ny10 EOM.
2 Borrowed $86,250 cash from Kansas Bank by signing a long-term note payable.
4 Purchased $11,400 of merchandise from ATM Industries, invoice dated November 3, terms 2y10, ny30.
5 Purchased $1,020 of store supplies on credit from Globe Company, invoice dated November 5, terms ny10 EOM. 8 Sold merchandise on credit to Sid Ragan, Invoice No. 439, for $6,350 (cost is $3,710).
10 Sold merchandise on credit to Carlos Mane, Invoice No. 440, for $12,500 (cost is $7,500).
11 Purchased $2,887 of merchandise from Xu Company, invoice dated November 10, terms 2y10, ny30.
12 Sent ATM Industries Check No. 633 in payment of its November 3 invoice less the discount.
15 Issued Check No. 634, payable to Payroll, in payment of sales salaries expense for the first half of the month, $8,435. Cashed the check and paid the employees.
15 Cash sales for the first half of the month are $27,170 (cost is $17,000). (Cash sales are recorded daily but are recorded only twice in this problem to reduce repetitive entries.)
15 Sold merchandise on credit to Tony Timmons, Invoice No. 441, for $4,250 (cost is $1,450).
16 Purchased $559 of office supplies on credit from Globe Company, invoice dated November 16, terms ny10 EOM.
17 Received a $487 credit memorandum from Xu Company for the return of unsatisfactory merchandise purchased on November 11.
18 Received payment from Sid Ragan for the November 8 sale less the discount.
19 Received payment from Carlos Mane for the November 10 sale less the discount.
19 Issued Check No. 635 to Xu Company in payment of its invoice of November 10 less the return and the discount. 22 Sold merchandise on credit to Carlos Mane, Invoice No. 442, for $2,595 (cost is $1,060).
24 Sold merchandise on credit to Tony Timmons, Invoice No. 443, for $3,240 (cost is $1,090).
25 Received payment from Tony Timmons for the sale of November 15 less the discount.
26 Received a $922 credit memorandum from Blix Supply for the return of office equipment purchased on November 1.
30 Issued Check No. 636, payable to Payroll, in payment of sales salaries expense for the last half of the month, $8,435. Cashed the check and paid the employees.
30 Cash sales for the last half of the month are $35,703 (cost is $20,400). 30 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 (November 1 beg. bal. is $40,000); Office Supplies; Store Supplies; Office Equipment; Accounts Payable; Long-Term Notes Payable; J. Suppan, Capital (Nov. 1 beg. bal. is $40,000); Sales; Sales Discounts; Cost of Goods Sold; and Sales Salaries Expense. Open the following accounts receivable subsidiary ledger accounts: Carlos Mane, Tony Timmons, and Sid Ragan. Open the following accounts payable subsidiary ledger accounts: Globe Company, ATM Industries, Blix Supply, and Xu Company.
2. Enter these transactions in a sales journal, a purchases journal, a cash receipts journal like that in, a cash disbursements journal like that 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.