Ye Olde Book Store opened its doors for business on

Ye Olde Book Store opened its doors for business on May 1. During May, the following
transactions took place:May 1 Linda Berrill began the business by depositing $42,000 in the
new company’s bank account.3 Issued check no. C001 to Remax Rentals for one month’s
rent, $1,000.4 Received a shipment of books from Chassman Books, Inc., invoice dated May 3,
terms 5/10, n/60, FOB shipping point, $15,680.May 5 Received a bill for freight from Menden
Shippers for the previous day’s shipment, terms n/30, $790.6 Received a shipment from
Lakeside Books, invoice dated May 6, terms 2/10, n/30, FOB shipping point, $11,300.7 Issued
check no. C002 to Pappanopoulos Freight for transportation charges on the previous day’s
shipment, $574.8 Issued check no. C003 to Yun Chao Equipment Company for store
equipment, $10,400.9 Sold books to Midtown Center, terms 5/10, n/30, invoice no. 1001,
$1,564.10 Returned books to Chassman Books, Inc., for credit, $760.11 Issued check no. C004
to WCAM for radio commercials, $235.12 Issued check no. C005 to Chassman Books, Inc., for
balance of amount owed less discount.13 Cash sales for the first two weeks, $4,018. (For this
problem, cash sales are recorded every two weeks, not daily as they are in actual practice.)14
Issued check no. C006 to Lakeside Books, $6,000 less discount.15 Signed a 90-day, 10
percent note for a bank loan and received $20,000 in cash.15 Sold books to Steve Oahani,
terms n/30, invoice no. 1002, $260.16 Issued a credit memorandum to Midtown Center for
returned books, $124.17 Received full payment from Midtown Center of balance owed less
discount.18 Sold books to Missy Porter, terms n/30, invoice no. 1003, $194.19 Received a
shipment from Perspectives Publishing Company, invoice dated May 18, terms 5/10, n/60,
$4,604.20 Returned additional books purchased on May 4 to Chassman Books, Inc., for credit
at gross price, $1,436.21 Sold books to Midtown Center, terms 5/10, n/30, invoice no. 1004,
$1,634.23 Received a shipment from Chassman Books, Inc., invoice dated May 19, terms 5/10,
n/60, FOB shipping point, $2,374.24 Issued check no. C007 to Menden Shippers for balance
owed on account plus shipping charges of $194 on previous day’s shipment.27 Cash sales for
the second two weeks, $7,488.29 Issued check no. C008 to Payroll for salaries for first four
weeks of the month, $1,400.30 Issued check no. C009 to WXAM for radio commercials,
$235.31 Cash sales for the last four days of the month, $554.Required1. Prepare a sales
journal, a multicolumn purchases journal, a cash receipts journal, a cash payments journal, and
a general journal. Use Page 1 for all journal references.2. Open the following general ledger
accounts: Cash (111), Accounts Receivable (112), Store Equipment (141), Accounts Payable
(211), Notes Payable (212), Linda Berrill, Capital (311), Sales (411), Sales Discounts (412),
Sales Returns and Allowances (413), Purchases (511), Purchases Discounts (512), Purchases
Returns and Allowances (513), Freight In (514), Salaries Expense (611), Advertising Expense
(612), and Rent Expense (613).3. Open accounts receivable subsidiary ledger accounts for
Midtown Center, Steve Oahani, and Missy Porter.4. Open accounts payable subsidiary ledger
accounts for Chassman Books, Inc.; Lakeside Books; Menden Shippers; and Perspectives
Publishing Company.5. Enter the transactions in the journals and post as appropriate.6. Foot
and crossfoot the journals, and make the end-of-month postings.7. Prepare a trial balance of
the general ledger and prove the control balances of Accounts Receivable and Accounts
Payable by preparing schedules of accounts receivable and accounts payable.View Solution:
Ye Olde Book Store opened its doors for business on
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