Demonstration Problems

1. Open the general ledger accounts; enter the balance for Accounts Receivable.

1011	Account Receivable, $ 20340
1021	Merchandise Inventory
4001	Sales
4051	Sales Returns and Allowances
5001	Cost of Goods Sold
2031	Sales Tax Payable
2034	GST Payable

2. Set up the accounts receivable subsidiary ledger. Open an account for each credit customer and enter the balances as of April 1, 20X4. All customers have terms of n/45.

Auto Center, $ 4930

Quick Car Care, $ 1410

Tom’s Tire & Auto, $ 14000

The Auto Store

Wood’s Auto Supply

3. Record the transactions on page 5 of a sales journal and on page 15 of the general journal.

4. Post-individual entries from the sales journal and the general ledger to the appropriate ledger accounts.

5. Total and rule the sales journal as of April 30, 20X4

6. Post from the sales journal to the appropriate general ledger accounts.

7. Prepare a schedule of accounts receivable for April 30, 20X4

8. Compare the total of the schedule of accounts receivable to the balance of the Accounts Receivable account. The two should be equal.

Transactions:
April

1	Sold tires to Quick car Care, issued Invoice 4576 with a list price of $ 12400. Cost of $ 5000
4	Sold auto supplies to the Auto Store, issued Invoice4577 with a list price of $ 16900. Cost of $ 11000.
9	Sold auto supplies to Tom’s Tire & Auto, issued Invoice 4578 with a list price of $ 6600. Cost of $ 4500.
14	Sold tires to Auto Center, issued Invoice 4579 with a list price of $ 16400. Cost of $ 8000
18	Accepted a return of all auto supplies damaged in shipment to Tom’s Tire & Auto issued Credit Memo 362. The original sale was made on Invoice 4578 on April 9.
21	Sold auto supplies to Quick Car Care, issued Invoice 4580 with a list price of $ 31160, cost of $20000.
29	Sold tires to The Auto Store, issued Invoice 4581 with a list price of $ 27410 cost of $15000.
30	Sold tires to Wood’s Auto Supply, issued Invoice 4582 with a list price of $ 14410, cost of $ 7000.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg:: ::/sites/dl/free/0070890684/46424/demoQues_8.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (41.0K)</a>

After trying to solve the problem on your own, click here to view the solution.