Asked by Isabella Rapone on May 08, 2024
Verified
Bradshaw Company has a balance in its Accounts Receivable control account of $13000 on January 1 2016. The subsidiary ledger contains three accounts: Brown Company balance $6000; Smith Company balance $2500 and Coco's Company. During January the following receivable-related transactions occurred. Credit Sales Collections Returns Brown Company $15,000$8,000$−0− Smith Company 9,0004,5001,000 Coco’s Company 8,5006,500−0−\begin{array} { l c c c } & \text { Credit Sales } & \text { Collections } & \text { Returns } \\\hline \text { Brown Company } & \$ 15,000 & \$ 8,000 & \$ - 0 - \\\text { Smith Company } & 9,000 & 4,500 & 1,000 \\\text { Coco's Company } & 8,500 & 6,500 & - 0 -\end{array} Brown Company Smith Company Coco’s Company Credit Sales $15,0009,0008,500 Collections $8,0004,5006,500 Returns $−0−1,000−0− Instructions
(a) What is the January 1 balance in the Coco's Company subsidiary account?
(b) What is the January 31 balance in the control account?
(c) Compute the balances in the subsidiary accounts at the end of the month.
(d) Which January transaction would not be recorded in a special journal?
Accounts Receivable Control
A system or process used to manage and monitor amounts owed to a business by its customers for goods or services provided on credit.
Subsidiary Accounts
Ledger accounts that provide detailed information supporting summary-level entries in the general ledger and control accounts.
Special Journal
A type of accounting journal designated for recording a particular type of transaction in a more efficient manner.
- Gain insight into the system for tracking transactions in the general and subsidiary ledgers.
- Comprehend the accounting procedures related to sales returns and allowances and their effects on accounts receivable.
- Calculate and reconcile the changes in account balances over a period.
Verified Answer
(b) $25,500[$13,000+($15,000+$9,000+$8,500)−($8,000+$4,500+$6,500)−\$ 25,500 [ \$ 13,000 + ( \$ 15,000 + \$ 9,000 + \$ 8,500 ) - ( \$ 8,000 + \$ 4,500 + \$ 6,500 ) -$25,500[$13,000+($15,000+$9,000+$8,500)−($8,000+$4,500+$6,500)− $1,000]\$ 1,000 ]$1,000] .
(c)
Brown ($6,000+$15,000−$8,000)$13,000 Smith ($2,500+$9,000−$4,500−$1,000)6,000 Coco’s ($4,500+$8,500−$6,500)6,500‾$25,500‾‾\begin{array}{llr}\text { Brown } & (\$ 6,000+\$ 15,000-\$ 8,000) & \$ 13,000 \\\text { Smith } & (\$ 2,500+\$ 9,000-\$ 4,500-\$ 1,000) & 6,000 \\\text { Coco's } & (\$ 4,500+\$ 8,500-\$ 6,500) & \underline{6,500} \\& & \underline{ \underline{ \$ 25,500}}\end{array} Brown Smith Coco’s ($6,000+$15,000−$8,000)($2,500+$9,000−$4,500−$1,000)($4,500+$8,500−$6,500)$13,0006,0006,500$25,500
(d) The sales return ($1,000)( \$ 1,000 )($1,000) would be recorded in the general journal.
Learning Objectives
- Gain insight into the system for tracking transactions in the general and subsidiary ledgers.
- Comprehend the accounting procedures related to sales returns and allowances and their effects on accounts receivable.
- Calculate and reconcile the changes in account balances over a period.
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