The post-closing trial balance for Horner Co. is shown below.
The subsidiary ledgers contain the following information: (1) accounts receivable—B. Hannigan $2,500, I. Kirk $7,500, and T. Hodges $5,000; (2) accounts payable—T. Igawa $12,000, D. Danford $18,000, and K. Thayer $13,000. The cost of all merchandise sold was 60% of the sales price.
The transactions for January 2021 are as follows.
Jan. 3 Sell merchandise to M. Ziesmer $8,000, terms 2/10, n/30.
5 Purchase merchandise from E. Pheatt $2,000, terms 2/10, n/30.
7 Receive a check from T. Hodges $3,500.
11 Pay freight on merchandise purchased $300.
12 Pay rent of $1,000 for January.
13 Receive payment in full from M. Ziesmer.
14 Post all entries to the subsidiary ledgers. Issued credit of $300 to B. Hannigan for returned merchandise.
15 Send K. Thayer a check for $12,870 in full payment of account, discount $130.
17 Purchase merchandise from G. Roland $1,600, terms 2/10, n/30.
18 Pay sales salaries of $2,800 and offi ce salaries $2,000.
20 Give D. Danford a 60-day note for $18,000 in full payment of account payable.
23 Total cash sales amount to $9,100.
24 Post all entries to the subsidiary ledgers. Sell merchandise on account to I. Kirk $7,400, terms 1/10, n/30.
27 Send E. Pheatt a check for $950.
29 Receive payment on a note of $40,000 from B. Stout.
30 Post all entries to the subsidiary ledgers. Return merchandise of $300 to G. Roland for credit.
Instructions
a. Open general and subsidiary ledger accounts for the following.
b. Record the January transactions in a sales journal, a single-column purchases journal, a cash receipts journal (see Illustration 7.9), a cash payments journal (see Illustration 7.16), and a general journal.
c. Post the appropriate amounts to the general ledger.
d. Prepare a trial balance at January 31, 2021.
e. Determine whether the subsidiary ledgers agree with controlling accounts in the general ledger.
