You have just taken over the accounting for Choi Enterprises, whose annual accounting
You have just taken over the accounting for Choi Enterprises, whose annual accounting period ends
December 31. The company’s previous accountant journalized its transactions through December 15
And posted all items that required posting as individual amounts (see the journals and ledgers in the
Working Papers). The company’s transactions beginning on December 16 follow (terms for all its
Credit sales are 210, n30):
Dec. 16 Sold merchandise on credit to Hanna Seppa, Invoice No. 916, for $7,700 (cost is $4,600).
17 Received a $1,040 credit memorandum from Funk Company for the return of merchandise
Received on December 15.
17 Purchased $615 of office supplies on credit from KK’s Supply Company, invoice dated
December 16, terms n10 EOM.
18 Received a $40 credit memorandum from KK’s Supply Company for the return of office
Supplies received on December 17.
20 Issued a $500 credit memorandum to Bo Brown for defective (worthless) merchandise sold
On December 15 and returned for credit.
21 Purchased $6,700 of store equipment on credit from KK’s Supply Company, invoice dated
December 21, terms n10 EOM.
22 Received payment from Hanna Seppa for the December 12 sale less the discount.
23 Issued Check No. 623 to Crossland Company in payment of its December 15 invoice less
The discount.
24 Sold merchandise on credit to Shilo Jones, Invoice No. 917, for $1,200 (cost is $600).
24 Issued Check No. 624 to Funk Company in payment of its December 15 invoice less the
Return and the discount.
25 Received payment from Bo Brown for the December 15 sale less the return and the discount.
26 Purchased $8,100 of merchandise from Crossland Company, invoice dated December 25,
Terms 210, n60.
29 Sold a neighboring merchant five boxes of file folders (office supplies) at their cost of $50
Cash.
30 Ken Choi, the sole owner of Choi Enterprises, used Check No. 625 to withdraw $2,500 in
Cash from the business for personal use.
31 Issued Check No. 626 to Jamie Inman, the company’s only sales employee, in payment of
Her $2,020 salary for the last half of December.
31 Issued Check No. 627 to Access Electric Company in payment of its $710 December electric
Bill.
31 Cash sales for the last half of the month are $29,600 (cost is $11,200). (Cash sales are
Recorded daily but are recorded only twice in this problem to reduce repetitive entries.)
Required
1. Record these transactions in the journals provided in the working papers.
2. Verify that amounts that should be posted as individual amounts to the general ledger accounts
Have been posted, including posting to the customer and creditor accounts. (Such items are immediately
Posted.) Foot and crossfoot the journals and make the month-end postings.
3. Prepare a December 31 trial balance and prove the accuracy of the subsidiary ledgers by preparing
4. Prepare the sales journal, purchase journal,cash reciepts journal, cash disbursement journal, general journal, general ledger, Accounts recieveable ledger, accounts payable, trial balance,schedule of accounts recievable.
