1. 1 McGraw-Hill Ryerson College Accounting First Canadian Edition Price Haddock Brock Hahn Reed

2. ACCOUNTING FOR SALES, ACCOUNTS RECEIVABLE, AND CASH RECEIPTS CHAPTER 8 2

3. TYPES OF BUSINESSES 3 1. Service Business - Sells service 2. Merchandise Business - Sells goods that it purchases for resale 3. Manufacturing Business - Sells goods that it produces

4. OBJECTIVE 1 Record credit sales in a sales journal. OBJECTIVE 1 Record credit sales in a sales journal. 4

5. FASHION WORLD 5001 S. Portland Unit Hamilton, ON Qty. Description Price Amount 1 Sports Jacket 100 00 DATE SALESPERSON AUTH. 1/2/-- T. Wells Goods Taken x To Be Delivered GST 7 00 Sales Tax 6 00 Total 115 00 Special Instructions: I authorize this purchase to be charged to my account. Allen Avery Signature NAME Allen Avery ADDRESS 612 Henderson Circle SALES INVOICE 3601 Windsor, ON Send ToSend To 5

6. A SALES JOURNAL Page 1 COST OF GOODS SALES ACCOUNTS GST PST SOLD DEBIT INV. POST. RECEIVABLE PAY. PAY. SALES MERCHANDISE DATE NO CUSTOMER. REF. DEBIT CREDIT CREDIT CREDIT INV. CREDIT 20X3 Jan. 2 3601 Allen Avery 115.00 7.00 8.00 100.0060.00 6 GENERAL JOURNAL Page 2 POST. DATEDESCRIPTION REF. DEBIT CREDIT 20X3 Jan. 2 Accounts Receivable 1011 115.00 GST Payable 1024 7.00 PST Payable 2031 8.00 Sales 4001 100.00 Sold merchandise on credit to Allen Avery Sales Invoice #3601 Recording Sales in a General Journal Recording Sales in a Sales Journal

7. OBJECTIVE 2 Post from the sales journal to the general ledger accounts. OBJECTIVE 2 Post from the sales journal to the general ledger accounts. 7

8. SALES JOURNAL Page 1 COST OF GOODS SALES ACCOUNTS GST PST SOLD DEBIT INV. P RECEIVABLE PAY. PAY. SALES MERCHANDISE DATE NO CUSTOMER. R DEBIT CREDIT CREDIT CREDIT INV. CREDIT 20X3 Jan. 2 3601 Allen Avery  115.00 7.00 8.00 100.00 60.00 Jan. 7 3602 Helen Ballard  287.50 17.50 20.00 250.00 150.00 Jan. 10 3603 Anthony Blackmon  345.00 21.00 24.00 300.00 180.00 Jan. 14 2604 John Sauve  230.00 14.00 16.00 200.00 120.00 Jan. 17 3605 Kim English  460.00 28.00 32.00 400.00 240.00 Jan. 20 3606 Nan Yang  172.50 10.50 12.00 150.00 90.00 Jan. 27 3607 Paul Romero  57.50 3.50 4.00 50.00 30.00 Jan. 28 3608 Laura Wilson  575.00 35.00 40.00 500.00 300.00 Jan. 31 3609 Richard L’Hirondelle  402.50 24.50 28.00 350.00 210.00 Jan. 31 3610 Allen Avery  517.50 31.50 36.00 450.00 270.00 Jan. 31 Totals 3,162.50 192.50 220.00 2,750.00 1,650.00 8 ACCOUNT Accounts Receivable ACCOUNT NO. 1011 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 1 Balance  1,590.00 31 S1 3,162.50 4,752.50 12 3 4 5 (1011) 8

9. SALES JOURNAL Page 1 COST OF GOODS SALES ACCOUNTS GST PST SOLD DEBIT INV. P RECEIVABLE PAY. PAY. SALES MERCHANDISE DATE NO CUSTOMER. R DEBIT CREDIT CREDIT CREDIT INV. CREDIT 20X3 Jan. 2 3601 Allen Avery  115.00 7.00 8.00 100.00 60.00 Jan. 7 3602 Helen Ballard  287.50 17.50 20.00 250.00 150.00 Jan. 10 3603 Anthony Blackmon  345.00 21.00 24.00 300.00 180.00 Jan. 14 2604 John Sauve  230.00 14.00 16.00 200.00 120.00 Jan. 17 3605 Kim English  460.00 28.00 32.00 400.00 240.00 Jan. 20 3606 Nan Yang  172.50 10.50 12.00 150.00 90.00 Jan. 27 3607 Paul Romero  57.50 3.50 4.00 50.00 30.00 Jan. 28 3608 Laura Wilson  575.00 35.00 40.00 500.00 300.00 Jan. 31 3609 Richard L’Hirondelle  402.50 24.50 28.00 350.00 210.00 Jan. 31 3610 Allen Avery  517.50 31.50 36.00 450.00 270.00 Jan. 31 Totals 3,162.50 192.50 220.00 2,750.00 1,650.00 8 ACCOUNT GST Payable ACCOUNT NO. 1024 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 31 Balance S1 192.50 192.50 1 2 3 4 5 (1024) 9

10. SALES JOURNAL Page 1 COST OF GOODS SALES ACCOUNTS GST PST SOLD DEBIT INV. P RECEIVABLE PAY. PAY. SALES MERCHANDISE DATE NO CUSTOMER. R DEBIT CREDIT CREDIT CREDIT INV. CREDIT 20X3 Jan. 2 3601 Allen Avery  115.00 7.00 8.00 100.00 60.00 Jan. 7 3602 Helen Ballard  287.50 17.50 20.00 250.00 150.00 Jan. 10 3603 Anthony Blackmon  345.00 21.00 24.00 300.00 180.00 Jan. 14 2604 John Sauve  230.00 14.00 16.00 200.00 120.00 Jan. 17 3605 Kim English  460.00 28.00 32.00 400.00 240.00 Jan. 20 3606 Nan Yang  172.50 10.50 12.00 150.00 90.00 Jan. 27 3607 Paul Romero  57.50 3.50 4.00 50.00 30.00 Jan. 28 3608 Laura Wilson  575.00 35.00 40.00 500.00 300.00 Jan. 31 3609 Richard L’Hirondelle  402.50 24.50 28.00 350.00 210.00 Jan. 31 3610 Allen Avery  517.50 31.50 36.00 450.00 270.00 Jan. 31 Totals 3,162.50 192.50 220.00 2,750.00 1,650.00 8 ACCOUNT PST Payable ACCOUNT NO. 2031 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 31 Balance S1 220.00 220.00 1 2 3 4 5 (2031) 10

11. SALES JOURNAL Page 1 COST OF GOODS SALES ACCOUNTS GST PST SOLD DEBIT INV. P RECEIVABLE PAY. PAY. SALES MERCHANDISE DATE NO CUSTOMER. R DEBIT CREDIT CREDIT CREDIT INV. CREDIT 20X3 Jan. 2 3601 Allen Avery  115.00 7.00 8.00 100.00 60.00 Jan. 7 3602 Helen Ballard  287.50 17.50 20.00 250.00 150.00 Jan. 10 3603 Anthony Blackmon  345.00 21.00 24.00 300.00 180.00 Jan. 14 2604 John Sauve  230.00 14.00 16.00 200.00 120.00 Jan. 17 3605 Kim English  460.00 28.00 32.00 400.00 240.00 Jan. 20 3606 Nan Yang  172.50 10.50 12.00 150.00 90.00 Jan. 27 3607 Paul Romero  57.50 3.50 4.00 50.00 30.00 Jan. 28 3608 Laura Wilson  575.00 35.00 40.00 500.00 300.00 Jan. 31 3609 Richard L’Hirondelle  402.50 24.50 28.00 350.00 210.00 Jan. 31 3610 Allen Avery  517.50 31.50 36.00 450.00 270.00 Jan. 31 Totals 3,162.50 192.50 220.00 2,750.00 1,650.00 8 ACCOUNT Cost of Goods Sold ACCOUNT NO. 5001 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 31 Balance S1 1,650.00 1,650.00 1,650.00 1 2 3 4 5 (5001) 11

12. SALES JOURNAL Page 1 COST OF GOODS SALES ACCOUNTS GST PST SOLD DEBIT INV. P RECEIVABLE PAY. PAY. SALES MERCHANDISE DATE NO CUSTOMER. R DEBIT CREDIT CREDIT CREDIT INV. CREDIT 20X3 Jan. 2 3601 Allen Avery  115.00 7.00 8.00 100.00 60.00 Jan. 7 3602 Helen Ballard  287.50 17.50 20.00 250.00 150.00 Jan. 10 3603 Anthony Blackmon  345.00 21.00 24.00 300.00 180.00 Jan. 14 2604 John Sauve  230.00 14.00 16.00 200.00 120.00 Jan. 17 3605 Kim English  460.00 28.00 32.00 400.00 240.00 Jan. 20 3606 Nan Yang  172.50 10.50 12.00 150.00 90.00 Jan. 27 3607 Paul Romero  57.50 3.50 4.00 50.00 30.00 Jan. 28 3608 Laura Wilson  575.00 35.00 40.00 500.00 300.00 Jan. 31 3609 Richard L’Hirondelle  402.50 24.50 28.00 350.00 210.00 Jan. 31 3610 Allen Avery  517.50 31.50 36.00 450.00 270.00 Jan. 31 Totals 3,162.50 192.50 220.00 2,750.00 1,650.00 8 ACCOUNT Merchandise Inventory ACCOUNT NO. 1021 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 31 P1 8,610.008,610.00 S1 1,650.00 6,960.00 1 2 3 4 (1021) 12

13. Saves time, effort, and recording space. Both journalizing and posting become more efficient. A sales journal requires only six summary postings to the general ledger at the end of each month no matter how many credit sales were entered. Allows division of work. Improves the audit trail by bringing together all entries for credit sales in one place and lists them by source document number as well as by date. 13

14. OBJECTIVE 3 Post from the sales journal to the customers’ accounts in the accounts receivable subsidiary ledger. OBJECTIVE 3 Post from the sales journal to the customers’ accounts in the accounts receivable subsidiary ledger. 14

15. Name Allen Avery Terms Address 612 Henderson Circle, Windsor, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  212.00 Jan. 2Sales Invoice 3601S1115.00327..00 1 2 3 4 6 15  SALES JOURNAL Page 1 COST OF GOODS SALES ACCOUNTS GST PST SOLD DEBIT INV. POST. RECEIVABLE PAY. PAY. SALES MERCHANDISE DATE NO CUSTOMER. REF. DEBIT CREDIT CREDIT CREDIT INV. CREDIT 20X3 Jan. 2 3601 Allen Avery  115.00 7.00 8.00 100.0060.00 5

16. OBJECTIVE 4 Record sales returns and allowances in the general journal. OBJECTIVE 4 Record sales returns and allowances in the general journal. 16

17. FASHION WORLD Credit Memorandum Nan Yang 111 Mockingbird Lane London, ON Memo # 192 Sales Invoice # 3606 January 24, 20X3 Return defective mdse. 150.00 10.50 12.00 GST PST Total 162.50 17

18. Sales Returns and Allowances is a contra revenue account. Its debit balance directly reduces the credit balance of the revenue account. This account allows us to track returns of merchandise and allowances given to customers. 18 SALES RETURNS AND ALLOWANCES JOURNAL Page 7 Sales Returns Cost of Goods Credit Accounts GST PST And Sold Credit Memo Post. Receivable Pay. Pay. Allowances Merchandise Date No. Customer Ref. Credit Debit Debit Debit Inv. Debit 20X3 Jan. 22 191 Kim English  57.50 3.50 4.00 50.00 - Jan. 24 192 Nan Yang  172.50 10.50 12.00 150.00 90.00 Jan. 31Total 230.00 14.00 16.00 200.00 90.00

19. 20 GENERAL JOURNAL Page 8 DATE DESCRIPTION POST. DEBIT CREDIT REF. 20X3 Jan. 22 Sales Returns and Allowances 4051 50.00 GST Payable 1024 3.50 PST Payable 2031 4.00 Accounts Rec./Kim English 1011/  57.50 Gave an allowance for damaged merchandise, Credit Memo 191; original sale made on Sales Inv. 3605 of Jan. 17 24 Sales Returns and Allowances 4051 150.00 GST Payable 1024 10.50 PST Payable 2031 12.00 Accounts Rec./Nan Yang 111/  172.50 Accepted a return of defective merchandise, Credit Memo 192; original sale made on Sales Inv. 3606 of Jan. 20 Merchandise Inventory 1021 90.00 Cost of goods sold 5001 90.00 Return merchandise to inventory Unsuitable, to be re-shelved 19

20. OBJECTIVE 5 Post sales returns and allowances from the general journal to the general ledger and the accounts receivable subsidiary ledger. OBJECTIVE 5 Post sales returns and allowances from the general journal to the general ledger and the accounts receivable subsidiary ledger. 20

21. GENERAL JOURNAL Page 8 DATE DESCRIPTION POST. DEBIT CREDIT REF. 20X3 Jan. 24 Sales Returns and Allowances 4051 150.00 GST Payable 1024 10.50 PST Payable 2031 12.00 Accounts Rec./Nan Yang 1011/  12.00 172.50 Accepted return of merchandise, Unsuitable, credit memo 192, Sale made on Sales Invoice 3606 of Jan. 20 Merchandise Inventory 1021 90.00 Cost of goods sold 5001 90.00 Return merchandise to inventory Unsuitable, to be re-shelved 18 Name Nan Yang Terms Address 1111 Mockingbird Lane, London, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  26.50 Jan. 10 Sales invoice 3606 S1172.50 199.00 Jan. 24 CM 192 J8172.50 26.50 21 1 2

22. OBJECTIVE 6 Record cash receipts in a cash receipts journal. OBJECTIVE 6 Record cash receipts in a cash receipts journal. 22

23. A term in accounting that includes cheques, money orders, and bank deposits as well as currency and coins A special-purpose fund set up to handle payments involving small amounts of money. CASH PETTY CASH FUND PETTY CASH FUND 23

24. A special journal used to record transactions involving the receipt of cash. CASH RECEIPTS JOURNAL 24

25. CASH RECEIPTS JOURNAL Page 1 Other Accounts Credit Cost of Ssles Goods Sold Date Explanation Post. Accounts GST TaxDebit Ref. Receivable Payable Payable Ssles Post Inventory Credit Credit Credit Credit Account Title Ref. Amount Cash Debit Credit 20X3 Jan. 6 Allen Avery 212.00 212.00 7 Cash Sales 106.40 121.60 1,520.00 1,748.00 912.00 10 John Bell 132.50 132.50 11 Investment C. Wells, 5,000.00 5,000.00 Capital 12 Anthony 265.00 265.00 Blackmon 14 Cash Sales 137.55 157.20 1,965.00 Cash 4.50 2,225.251,179.00 Short/Over 15 Richard 53.00 53.00 L’Hirondelle 16 Cash Refund Supplies 25.00 Prepaid GST 1.75 26.75 21 Kim English 100.00 100.00 21 Cash Sales 147.70 168.80 2,236.60 Cash 1.202,427.70 Short/Over 28 Cash Sales 24.50 28.00 350.00 402.50 210.00 31 Paul Romero 57.50 57.50 31 Laura Wilson 130.00 130.00 31 Cash Sales 114.80 131.20 1,640.00 1,886.00 31 Collection of note Notes 200.00 Receivable David Shaw Interest 9.00 209.00 Income 25 GST Payable + Sales Tax Payable + Sales Credit = Cash Debit $106.40 + $121.60 + $1,520.00 = $1,748.00

26. A verification that the amount of currency and coins in a cash register agrees with the amount shown on the audit tape. CASH REGISTER PROOF 26

27. OBJECTIVE 7 Account for cash short or over. OBJECTIVE 7 Account for cash short or over. 27

28. If there is less cash than the audit tape shows, the cash is said to be short. If there is more cash than the audit tape shows, the cash is said to be over. CASH OVER SHORT OR 28

29. CASH RECEIPTS JOURNAL Page 1 Other Accounts Credit Cost of Ssles Goods Sold Date Explanation Post. Accounts GST TaxDebit Ref. Receivable Payable Payable Ssles Post Inventory Credit Credit Credit Credit Account Title Ref. Amount Cash Debit Credit 20X3 Jan. 6 Allen Avery 212.00 212.00 7 Cash Sales 106.40 121.60 1,520.00 1,748.00 912.00 10 John Bell 132.50 132.50 11 Investment C. Wells, 5,000.00 5,000.00 Capital 12 Anthony 265.00 265.00 Blackmon 14 Cash Sales 137.55 157.20 1,965.00 Cash 4.50 2,225.251,179.00 Short/Over 15 Richard 53.00 53.00 L’Hirondelle 16 Cash Refund Supplies 25.00 Prepaid GST 1.75 26.75 21 Kim English 100.00 100.00 21 Cash Sales 147.70 168.80 2,236.60 Cash 1.202,427.70 Short/Over 28 Cash Sales 24.50 28.00 350.00 402.50 210.00 31 Paul Romero 57.50 57.50 31 Laura Wilson 130.00 130.00 31 Cash Sales 114.80 131.20 1,640.00 1,886.00 31 Collection of note Notes 200.00 Receivable David Shaw Interest 9.00 209.00 Income 29 Cash Over

30. GENERAL JOURNAL Page 15 DATE DESCRIPTION POST. DEBIT CREDIT REF. 20X2 July 31 Notes Receivable 109 200.00 Accounts Rec./David Shaw 111/  200.00 Received a 6-month, 9% note from David Shaw to replace open account $200.00 July 31, 20X2 Six months AFTER DATE 1 PROMISE TO PAY TO THE ORDER OF Fashion World Two hundred and no/100 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DOLLARS PAYABLE AT City National Bank VALUE RECEIVED with interest at 9% NO. 28 DUE January 31, 20X3 David Shaw 30

31. OBJECTIVE 8 Post from the cash receipts journal to subsidiary and general ledgers. OBJECTIVE 8 Post from the cash receipts journal to subsidiary and general ledgers. 31

32. CASH RECEIPTS JOURNAL Page 1 Other Accounts Credit Cost of Ssles Goods Sold Date Explanation Post. Accounts GST TaxDebit Ref. Receivable Payable Payable Ssles Post Inventory Credit Credit Credit Credit Account Title Ref. Amount Cash Debit Credit 20X3 Jan. 6 Allen Avery 212.00 212.00 7 Cash Sales 106.40 121.60 1,520.00 1,748.00 912.00 10 John Bell 132.50 132.50 11 Investment C. Wells, 3001 5,000.00 5,000.00 Capital 12 Anthony 265.00 265.00 Blackmon 14 Cash Sales 137.55 157.20 1,965.00 Cash 5020 4.50 2,225.251,179.00 Short/Over 15 Richard 53.00 53.00 L’Hirondelle 16 Cash Refund Supplies 1029 25.00 Prepaid GST 1023 1.75 26.75 21 Kim English 100.00 100.00 21 Cash Sales 147.70 168.80 2,236.60 Cash 1.202,427.70 Short/Over 5020 28 Cash Sales 24.50 28.00 350.00 402.50 210.00 31 Paul Romero 57.50 57.50 31 Laura Wilson 130.00 130.00 31 Cash Sales 114.80 131.20 1,640.00 1,886.00 31 Collection of note Notes 1009 200.00 Receivable David Shaw Interest 4091 9.00 209.00 Revenue 31 Totals 950.00 530.95 606.80 7,585.00 5,232.45 14,905.20 4,551.00 1011 102420314001 1001 5001/1021 32

33. CASH RECEIPTS JOURNAL Page 1 Other Accounts Credit Cost of Ssles Goods Sold Date Explanation Post. Accounts GST TaxDebit Ref. Receivable Payable Payable Ssles Post Inventory Credit Credit Credit Credit Account Title Ref. Amount Cash Debit Credit 20X3 Jan. 6 Allen Avery 212.00 212.00 Revenue 31 Totals 950.00 530.95 606.80 7,585.00 5,232.45 14,905.20 4,551.00 ( 1011) (1024) (2031) (4001) (1001) (5001/1021) 33 ACCOUNT Cash ACCOUNT NO. 1001 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 1 Balance  5,600.00 Jan. 31 CR1 14,905.20 20,505.20

34. CASH RECEIPTS JOURNAL Page 1 Other Accounts Credit Cost of Ssles Goods Sold Date Explanation Post. Accounts GST TaxDebit Ref. Receivable Payable Payable Ssles Post Inventory Credit Credit Credit Credit Account Title Ref. Amount Cash Debit Credit 20X3 Jan. 6 Allen Avery 212.00 212.00 Revenue 31 Totals 950.00 530.95 606.80 7,585.00 5,232.45 14,905.20 4,551.00 ( 1011) (1024) (2031) (4001) (1001) (5001/1021) 34 ACCOUNT Accounts Receivable ACCOUNT NO. 1011 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 1 Balance  1,590.00 Jan. 31 S1 3,162.50 4,752.50 14 J8 172.50 4,580.00 22 J8 57.50 4,522.50 31 CR1 950.00 3,572.50

35. CASH RECEIPTS JOURNAL Page 1 Other Accounts Credit Cost of Ssles Goods Sold Date Explanation Post. Accounts GST TaxDebit Ref. Receivable Payable Payable Ssles Post Inventory Credit Credit Credit Credit Account Title Ref. Amount Cash Debit Credit 20X3 Jan. 6 Allen Avery 212.00 212.00 Revenue 31 Totals 950.00 530.95 606.80 7,585.00 5,232.45 14,905.20 4,551.00 ( 1011) (1024) (2031) (4001) (1001) (5001/1021) 28 ACCOUNT GST Payable ACCOUNT NO. 1024 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 31 Balance S1 192.50 192.50 Jan. 31 CR1 530.95 723.45 ACCOUNT PST Payable ACCOUNT NO. 2031 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 1 Balance  695.40 Jan. 31 S1 220.00 915.40 31 CR1 606.80 1,522.20 35

36. CASH RECEIPTS JOURNAL Page 1 Other Accounts Credit Cost of Ssles Goods Sold Date Explanation Post. Accounts GST TaxDebit Ref. Receivable Payable Payable Ssles Post Inventory Credit Credit Credit Credit Account Title Ref. Amount Cash Debit Credit 20X3 Jan. 6 Allen Avery 212.00 212.00 Revenue 31 Totals 950.00 530.95 606.80 7,585.00 5,232.45 14,905.20 4,551.00 ( 1011) (1024) (20310 (4001) (1001) (5001/1021) 28 ACCOUNT Sales ACCOUNT NO. 4001 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 31 Balance S1 2,750.00 2,750.00 Jan. 31 CR1 7,585.00 10,335.00 ACCOUNT Cost of Goods Sold ACCOUNT NO. 5001 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 31 S1 1,650.00 1,650.00 31 CR1 4,551.00 6,201.00 36

37. CASH RECEIPTS JOURNAL Page 1 Other Accounts Credit Cost of Ssles Goods Sold Date Explanation Post. Accounts GST TaxDebit Ref. Receivable Payable Payable Ssles Post Inventory Credit Credit Credit Credit Account Title Ref. Amount Cash Debit Credit 20X3 Jan. 6 Allen Avery 212.00 212.00 Revenue 31 Totals 950.00 530.95 606.80 7,585.00 5,232.45 14,905.20 4,551.00 ( 1011) (1024) (2031) (4001) (1001) (5001/1021) ACCOUNT Merchandise Inventory ACCOUNT NO. 1021 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 1 Balance  Jan. 31 S1 1,650.00 1,650.00 31 CR14,551.00 6,201.00 37

38. OBJECTIVE 9 Prepare a schedule of accounts receivable. OBJECTIVE 9 Prepare a schedule of accounts receivable. 38

39. Name Allen Avery Terms Address 612 Henderson Circle, Windsor, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  212.00 2 Sales invoice 3601S1115.00 327.00 6 CR1212.00 115.00 31 Sales invoice 3610S1517.50 632.50 Name Helen Ballard Terms Address 1069 Warren Street, Etobicoke, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Sales invoice 3602S1 287.50287.50 39

40. Name John Bell Terms Address 9 Glen Road, Mississauga, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  132.50 10CR1132.50 0 Name Anthony Blackmon Terms Address 216 Lawson Street, Toronto, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  530.00 30 Sales invoice 3603 S1345.00 875.00 12 CR1265.00 610.00 40

41. Name Kim English Terms Address 4900 Vista Ridge Road, Brampton, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  106.00 17 Sales invoice 3605 S1460.00 566.00 21 CR1100.00 466.00 22 CM191 J8 57.50 408.50 Name John Sauve Terms Address 2147 Mission Drive, Toronto, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  318.00 14 Sales invoice 3604S1230.00 548.00 41

42. Name Richard L’Hirondelle Terms Address 1026 Barr Street, Mississauga, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  53.00 15 CR153.00 0 31 Sales invoice 3609 S1402.50 402.50 Name Paul Romero Terms Address 148 Fallon Street, Windsor, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  106.00 27 Sales invoice 3607S157.50 163.50 31 CR157.50 106.00 42

43. Name Laura Wilson Terms Address 6480 Oak Tree Drive, Toronto, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  106.00 28 Sales invoice 3608 S1575.00 681.00 31 CR1130.00 551.00 Name Nan Yang Terms Address 1111 Mockingbird Lane, London, ON DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. 20X3 Jan. 1 Balance  26.50 10 Sales invoice 3606S1172.50 199.00 24 CM 192 J8172.50 26.50 43

44. FASHION WORLD Schedule of Accounts Receivable January 31, 20X3 Allen Avery632.50 Helen Ballard287.50 Anthony Blackmon610.00 Kim English 408.50 John Hernandez 548.00 Richard Narvaez 402.00 Paul Romero 106.00 Laura Wilson 551.00 Nan Yang 26.50 Total 3,572.50 ACCOUNTS RECEIVABLE SUBSIDIARY ACCOUNTS 33 ACCOUNT Accounts Receivable ACCOUNT NO. 1011 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 1 Balance  1,590.00 Jan. 31 S1 3,162.50 4,752.50 14 J8 172.50 4,580.00 22 J8 57.50 4,522.50 31 CR1 950.00 3,572.50 44

45. WHOLESALE BUSINESS 45 Wholesalers are manufacturers or distributors of goods who sell to retailers or large consumers such as hotels and hospitals. Wholesalers handle sales and accounts receivable in the same manner as retailers. Many wholesalers offer cash discounts.

46. OBJECTIVE 10 Compute trade discounts. OBJECTIVE 10 Compute trade discounts. 46

47. The amount the wholesaler records in its sales journal as the sales price of the goods. The established retail price. Reductions from list price. List Price Trade Discount Invoice Price 47 List Price - Trade Discount = Invoice Price

48. 48 List Price $500 Less 40% discount ($500 x.40)- 200 Invoice Price $300

49. 49 List Price$500.00 Less first discount ($500 x.25)- 125.00 Difference$375.00 Less second discount ($375 x.15)- 56.25 Invoice price$318.75

50. In most cases, Goods and Services Tax will apply; therefore, the sales journal will have three amount columns, Accounts Receivable debit, GST Payable credit and Sales credit. 50 SALES JOURNAL Page 1 Accounts GST Invoice Post. Receivable Payable. Sales Date No. Customer’s Name Ref. Debit CreditCredit 20X3 Jan. 2 7711 Evers Hardware  856.00 56.00800.00 Company 31 7820 Wilson Department  2,033.00 133.00 1,900.00 Store 31 Total 16,692.00 1,092.00 15,600.00 (1011)(1024) (4001)

51. ACCOUNT Accounts Receivable ACCOUNT NO. 1011 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 1 Balance  22,800.00 31 S1 16,692.0034,492.00 SALES JOURNAL Page 1 Accounts GST Invoice Post. Receivable Payable. Sales Date No. Customer’s Name Ref. Debit CreditCredit 20X3 Jan. 2 7711 Evers Hardware  856.00 56.00800.00 Company 31 7820 Wilson Department  2,033.00 133.00 1,900.00 Store 31 Total 16,692.00 1,092.00 15,600.00 (1011) (1024) (4001) 45 ACCOUNT GST Payable ACCOUNT NO. 1024 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 31 Balance S1 1092.00 1092.00 51

52. SALES JOURNAL Page 1 Accounts GST Invoice Post. Receivable Payable. Sales Date No. Customer’s Name Ref. Debit CreditCredit 20X3 Jan. 2 7711 Allen Avery  856.00 56.00800.00 31 7820 Wilson Department  2,033.00 133.00 1,900.00 Store 31 Total 16,692.00 1,092.00 15,600.00 (1011) (1024) (4001) 52 ACCOUNT Sales ACCOUNT NO. 4001 DATE EXPLANATION POST. DEBIT CREDIT BALANCE REF. DEBIT CREDIT 20X3 Jan. 31 S1 15,600.00 15,600.00