managerial accounting

1. 1
Exam ch 7
Ex. 1
Lowry Company uses a sales journal, a cash receipts journal, and a general journal to
record transactions with its customers. Record the following transactions in the
appropriate journals. The cost of all merchandise sold was 70% of the sales price.
July 2 Sold merchandise for $15,000 to B. Rice on account. Credit terms 2/10, n/30. Sales
invoice No. 100.
July 5 Received a check for $800 from R. Hyatt in payment of his account.
July 8 Sold merchandise to F. Wenger for $900 cash.
July 10 Received a check in payment of Sales invoice No. 100 from B. Rice minus the 2%
discount.
July 15 Sold merchandise for $9,000 to J. Mays on account. Credit terms 2/10, n/30. Sales
invoice No. 101.
July 18 Borrowed $25,000 cash from United Bank signing a 6-month, 10% note.
July 20 Sold merchandise for $12,000 to C. Kane on account. Credit terms 2/10, n/30.
Sales invoice No. 102.
July 25 Issued a credit (reduction) of $600 to C. Kane as an allowance for damaged
merchandise previously sold on account.
July 31 Received a check from J. Mays for $5,000 as payment on account
Ex. 2
Goren Company uses a single-column purchases journal, a cash payments
journal, and a general journal to record transactions with its suppliers and others. Record
the following transactions in the appropriate journals.
Oct. 5 Purchased merchandise on account for $20,000 from Hendry Company. Terms:
2/10 n/30; FOB shipping point.
Oct. 6 Paid $7,200 to Federated Insurance Company for a two-year fire insurance policy.
Oct. 8 Purchased store supplies on account for $700 from Flint Supply Company. Terms:
2/10 n/30.
Oct. 11 Purchased merchandise on account for $14,000 from Adler Corporation. Terms:
2/10 n/30; FOB shipping point.
Oct. 13 Granted a reduction of $3,000 to Adler Corporation for merchandise purchased on
October 11 and returned because of damage.
Oct. 15 Paid Hendry Company for merchandise purchased on October 5, less discount.

2. 2
Oct. 16 Purchased merchandise for $8,000 cash from Clifford Company.
Oct. 21 Paid Adler Corporation for merchandise purchased on October 11, less
merchandise returned on October 13, less discount.
Oct. 25 Purchased merchandise on account for $22,000 from Eaton Company. Terms: 2/10
n/30; FOB shipping point.
Oct. 31 Purchased office equipment for $30,000 cash from Pate Office Supply Company.
Ex 3:
Indicate which of the following cash payments journal columns are posted only in total,
only daily, or both in total and daily.
1. Other Accounts _______________________
2. Accounts Payable _______________________
3. Merchandise Inventory _______________________
4. Cash _______________________
Ex :4
Dexter Company maintains four special journals and a general journal to record its
transactions. Using the code below, indicate in the space provided the appropriate journal
for recording the transactions listed.
S
CR
CP
P
G
Sales journal
Cash receipts journal
Cash payments journal
Single-column purchases journal
General journal
____ 1. Mr. Dexter invested cash in the business.
____ 2. Purchased store supplies on account.
____ 3. Sold merchandise to customer on account.
____ 4. Purchased a 2-year fire insurance policy for cash.
____ 5. Received a check from a customer as payment on account.
____ 6. Paid for store supplies purchased in transaction 2.
____ 7. Purchased merchandise on account.
____ 8. Issued a credit memorandum to a customer who returned defective merchandise
previously sold on account.
____ 9. Purchased office equipment for cash.
____ 10. Made an adjusting entry for store supplies used during the period
Ex : 5
B Zelli Company has a balance in its Accounts Receivable control account of $15,000 on
January 1, 2017. The subsidiary ledger contains three accounts: Kline Company, balance
$6,000; Black Company, balance $3,700; and Finney Company. During January, the
following receivable-related transactions occurred.
Credit Sales
$16,000
11,000
Collections
$12,000
4,000
Returns
$ -0-
4,500
Kline Company
Black Company
13,000 14,000 0 Finney Company

3. 3
Instructions
(a) What is the January 1 balance in the Finney 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.
Ex :6
Magathan Company has a balance in its Accounts Payable control account of $11,600 on
January 1, 2017. The subsidiary ledger contains three accounts: Smythe Company,
balance $4,200; Edds Company, balance $2,600; and Willhite Company. During January,
the following receivable-related transactions occurred.
Purchases
$9,500
7,350
Payments
$8,400
2,600
Returns
$ -0-
3,100
Smythe Company
Edds Company
8,900 9,500 0 Willhite Company
Instructions
(a) What is the January 1 balance in the Willhite 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.