| Presented below are the purchases and cash payments journals for Fornelli Co. for its first month of operations. | PURCHASES JOURNAL | | Date | Account Credited | Ref. | Amount | | July 4 | Alvarado | | 6,800 | | 5 | Rees | | 8,100 | | 11 | Gallup | | 5,920 | | 13 | Werly | | 15,300 | | 20 | Mangus | | 7,900 | | Total | | | 44,020 | | CASH PAYMENT JOURNAL | | Date | Particular | Ref. | Total amount $ | Purchase discount $ | Details | | Accounts Payable | Cash Purchase | Other | | July 4 | Supplies | | 600 | | | | 600 | | 10 | Rees | | 8,019 | 81 | 8,100 | | | | 11 | Prepaid Rent | | 6,000 | | | | 6,000 | | 15 | Alvarado | | 6,800 | | 6,800 | | | | 19 | Owners Drawings | | 2,500 | | | | 2,500 | | 21 | Werly | | 15,147 | 153 | 15,300 | | | | | | | | | | | | | Total | | 39,066 | 234 | 30,200 | | 9,100 | In addition, the following transactions have not been journalized for July. The cost of all merchandise sold was 65% of the sales price. July 1 The founder, N. Fornelli, invests $80,000 in cash. 6 Sell merchandise on account to Dow Co. $6,200 terms 1/10, n/30. 7 Make cash sales totaling $8,000. 8 Sell merchandise on account to S. Goebel $4,600, terms 1/10, n/30. 10 Sell merchandise on account to W. Leiss $4,900, terms 1/10, n/30. 13 Receive payment in full from S. Goebel. 16 Receive payment in full from W. Leiss. 20 Receive payment in full from Dow Co. 21 Sell merchandise on account to H. Kenney $5,000, terms 1/10, n/30. 29 Returned damaged goods to N. Alvarado and received cash refund of $420. Instructions a) Journalize the transactions that have not been journalized in the sales journal and the cash receipts journal. b) Post to the accounts receivable and accounts payable subsidiary ledgers. Follow the sequence of transactions as shown in the problem. | | |
