Problem-5: Accounting Information Systems

Instructions

1. Open the following accounts in the general ledger
   101 Cash
   112 Accounts Receivable
   120 Merchandise Inventory
   126 Supplies
   131 Prepaid Rent
   201 Accounts Payable
   301 Owner's Capital

   306 Owner's Drawings
   401 Sales Revenue
   414 Sales Discounts
   505 Cost of Goods Sold
   631 Supplies Expense
   729 Rent Expense
2. Journalize the transactions that have not been journalized in the sales journal and the cash receipts journal.
3. Post to the accounts receivable and accounts payable subsidiary ledgers. Follow the sequence of transactions as shown in the problem.
4. Post the individual entries and totals to the general ledger.
5. Prepare a trial balance at July 31, 2020
6. Determine whether the subsidiary ledgers agree with the control accounts in the general ledger.
7. The following adjustments at the end of July are necessary.
   
   1. A count of supplies indicates that $140 is still on hand.
   2. Recognize rent expense for July, $500.
   Prepare the necessary entries in the general journal. Post the entries to the general ledger.
8. Prepare an adjusted trial balance at July 31, 2020

Solution