Acc225 FAP P7-2A Wise Company (Sales and Cash Receipts Journal - Periodic)

Acc225 Fundamental Accounting Principles
P7-2A
Wise Company completes these transactions during April of the current year (the terms of all its credit sales are 2/10, n/30).
Apr. 2 Purchased $13,300 of merchandise on credit from Negi Company, invoice dated April 2, terms 2/10, n/60.
3 Sold merchandise on credit to Brooke Sledd, Invoice No. 760, for $3,000 (cost is $2,000).
3 Purchased $1,380 of office supplies on credit from Madison, Inc. Invoice dated April 2, terms n10 EOM.
4 Issued Check No. 587 to U.S. View for advertising expense, $999. 5 Sold merchandise on credit to Paul Kohr, Invoice No. 761, for $8,000 (cost is $6,500). 6 Received an $85 credit memorandum from Madison, Inc., for the return of some of the office supplies received on April 3.
9 Purchased $11,125 of store equipment on credit from Ned’s Supply, invoice dated April 9, terms n10 EOM.
11 Sold merchandise on credit to Amy Nilson, Invoice No. 762, for $9,500 (cost is $7,000).
12 Issued Check No. 588 to Negi Company in payment of its April 2 invoice, less the discount.
13 Received payment from Brooke Sledd for the April 3 sale, less the discount.
13 Sold $4,100 of merchandise on credit to Brooke Sledd (cost is $2,600), Invoice No. 763.
14 Received payment from Paul Kohr for the April 5 sale, less the discount.
16 Issued Check No. 589, payable to Payroll, in payment of sales salaries expense for the first half of the month, $9,750. Cashed the check and paid employees.
16 Cash sales for the first half of the month are $50,840 (cost is $33,880). (Cash sales are recorded daily from cash register data but are recorded only twice in this problem to reduce repetitive entries.)
17 Purchased $12,750 of merchandise on credit from Price Company, invoice dated April 17, terms 210, n30.
18 Borrowed $50,000 cash from First State Bank by signing a long-term note payable.
20 Received payment from Amy Nilson for the April 11 sale, less the discount.
20 Purchased $730 of store supplies on credit from Ned’s Supply, invoice dated April 19, terms n10 EOM.
23 Received a $400 credit memorandum from Price Company for the return of defective merchandise received on April 17.
23 Received payment from Brooke Sledd for the April 13 sale, less the discount.
25 Purchased $10,375 of merchandise on credit from Negi Company, invoice dated April 24, terms 210, n60.
26 Issued Check No. 590 to Price Company in payment of its April 17 invoice, less the return and the discount.
27 Sold $3,070 of merchandise on credit to Paul Kohr, Invoice No. 764 (cost is $2,420).
27 Sold $5,700 of merchandise on credit to Amy Nilson, Invoice No. 765 (cost is $3,305).
30 Issued Check No. 591, payable to Payroll, in payment of the sales salaries expense for the last half of the month, $9,750.
30 Cash sales for the last half of the month are $70,975 (cost is $55,900) Assume that Wise Co. uses the periodic inventory system.

Required:
1. Prepare headings for a sales journal like that in Exhibit 7.5. Prepared headings for a cash receipts journal like that in Exhibit 7.7. Journalize the April transactions shown in Problem 7-1A that should be recorded in the sales journal and the cash receipts journal assuming the PERIODIC INVENTORY SYSTEM is used.
2. Open the general ledger accounts with balances shown in Problem 7-1A (do not open a Cost of Goods Sold ledger account). Also open accounts receivable subsidiary ledger accounts for Brooke Sledd, Paul Kohr, and Amy Nilson. Under the periodic system, an Inventory account exists but is inactive until its balance is updated to the correct inventory balance at year-end. In this problem, the Inventory account remains inactive, but must be included to correctly complete the trial balance.
3. Complete parts 3, 4 and 5 of Problem 7-1A using the results of Parts 1 and 2 of this problem.
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