PR 5-2B Revenue and cash receipts journals; accounts receivable and general ledgers
Transactions related to revenue and cash receipts completed by Pinnacle Engineering Services during the period April 2–30, 2012, are as follows:
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Apr. 2. |
Issued Invoice No. 717 to Yee Co., $950. |
|
3. |
Received cash from Auto-Flex Co. for the balance owed on its account. |
|
7. |
Issued Invoice No. 718 to Park Development Co., $530. |
|
10. |
Issued Invoice No. 719 to Ridge Communities, $2,350. |
|
Post revenue and collections to the accounts receivable subsidiary ledger. |
|
|
Apr. 14. |
Received cash from Park Development Co. for the balance owed on April 1. |
|
16. |
Issued Invoice No. 720 to Park Development Co., $325. |
|
Post revenue and collections to the accounts receivable subsidiary ledger. |
|
|
18. |
Received cash from Yee Co. for the balance due on invoice of April 2. |
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20. |
Received cash from Park Development Co. for invoice of April 7. |
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23. |
Issued Invoice No. 721 to Auto-Flex Co., $790. |
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30. |
Recorded cash fees earned, $3,950. |
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30. |
Received office equipment of $1,500 in partial settlement of balance due on the Ridge Communities account. |
|
Post revenue and collections to the accounts receivable subsidiary ledger. |
Instructions
1. Insert the following balances in the general ledger as of April 1:
|
11 |
Cash |
$18,340 |
|
12 |
Accounts Receivable |
2,260 |
|
18 |
Office Equipment |
34,700 |
|
41 |
Fees Earned |
— |
2. Insert the following balances in the accounts receivable subsidiary ledger as of April 1:
|
Auto-Flex Co. |
$1,460 |
|
Park Development Co. |
800 |
|
Ridge Communities |
— |
|
Yee Co. |
— |
3. Prepare a single-column revenue journal and a cash receipts journal. Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. The Fees Earned column is used to record cash fees. Insert a check mark (v) in the Post. Ref. column when recording cash fees.
4. Using the two special journals and the two-column general journal, journalize the transactions for April. Post to the accounts receivable subsidiary ledger, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customer’s account before recording a cash receipt.
5. Total each of the columns of the special journals, and post the individual entries and totals to the general ledger. Insert account balances after the last posting.
6. Determine that the subsidiary ledger agrees with the controlling account in the general ledger.
7. Why would an automated system omit postings to a control account as performed in step 5 for Accounts Receivable?