Sage Learning Centers was established on July 20 to provide educational services. The services provided during the remainder of the month are as follows:
July
21. Issued Invoice No. 1 to J. Dunlop for $115 on account.
22. Issued Invoice No. 2 to K. Tisdale for $350 on account.
24. Issued Invoice No. 3 to T. Quinn for $85 on account.
25. Provided educational services, $300, to K. Tisdale in exchange for educational supplies.
27. Issued Invoice No. 4 to F. Mintz for $225 on account.
30. Issued Invoice No. 5 to D. Chase for $170 on account.
30. Issued Invoice No. 6 to K. Tisdale for $120 on account.
31. Issued Invoice No. 7 to T. Quinn for $105 on account.
Instructions
1. Journalize the transactions for July, using a single-column revenue journal and a two-column general journal. Post to the following customer accounts in the accounts receivable ledger and insert the balance immediately after recording each entry: D. Chase; J. Dunlop; F. Mintz; T. Quinn; K. Tisdale.
2. Post the revenue journal and the general journal to the following accounts in the general ledger, inserting the account balances only after the last postings:
12 Accounts Receivable
13 Supplies
41 Fees Earned
3.
a. What is the sum of the balances of the customer accounts in the subsidiary ledger at July 31?
b. What is the balance of the accounts receivable controlling account at July 31?
4. Assume Sage Learning Centers began using a computerized accounting system to record the sales transactions on August 1. What are some of the benefits of the computerized system over the manual system?
Answer:
1. and 2.
Page 1
July 21 1 J. Dunlop
22 2 K. Tisdale
24 3 T. Quinn
27 4 F. Mintz
30 5 D. Chase
30 6 K. Tisdale
31 7 T. Quinn
31
Page 1
Debit Credit
July 25 Supplies13 300
Post.
Item Ref. Debit Credit Balance
July 30 R1 170 170
Post.
Item Ref. Debit Credit Balance
July 21 R1 115 115
Post.
Item Ref. Debit Credit Balance
July 27 R1 225 225
Post.
Item Ref. Debit Credit Balance
July 24 R1 85 85
31 R1 105 190
Post.
Item Ref. Debit Credit Balance
July 22 R1 350 350
30 R1 120 470
Fees Earned 41 300
Post.
Item Ref. Debit Credit Debit Credit
July 31 R1 1,170 1,170
Post.
Item Ref. Debit Credit Debit Credit
July 25 J1 300 300
Post.
Item Ref. Debit Credit Debit Credit
July 25 J1 300 300
31 R1 1,170 1,470
3. a. $1,170 ($170 + $115 + $225 + $190 + $470)
b. $1,170
4. The computerized system is more efficient. Each sales transaction is entered
into an electronic invoice form. The postings to the accounts receivable subsidiary
and fees earned ledgers are automatic. Also, all sums and totals in the subsidiary
ledgers are calculated automatically. There are no separate postings to an
accounts receivable control account because there is no need to verify the
accuracy of account totals. There is no math or posting error. The computerized
system also provides management with current customer account balance
information because the postings are automatic.