Response to the following problem:
The following transactions were completed by Yang Restaurant Equipment during January, the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in Cengage Now.
Jan. 2 Issued Ck. No. 6981 for monthly rent, $850. 2 L. Yang, the owner, invested an additional $4,500 in the business.
4 Bought merchandise on account from Valentine and Company, invoice no. A694, $2,830; terms 2/10, n/30; dated January 2.
4 Received check from Velez Appliance for $980 in payment of invoice for $1,000 less discount.
4 Sold merchandise on account to L. Parrish, invoice no. 6483, $755.
6 Received check from Peck, Inc., $637, in payment of $650 invoice less discount.
7 Issued Ck. No. 6982, $588, to Frost and Son, in payment of invoice no. C127 for $600 less discount.
7 Bought supplies on account from Dudley Office Supply, invoice no. 190B, $93.54; terms net 30 days.
7 Sold merchandise on account to Ewing and Charles, invoice no. 6484, $1,115.
9 Issued credit memo no. 43 to L. Parrish, $47, for merchandise returned.
11 Cash sales for January 1 through January 10, $4,454.87.
11 Issued Ck. No. 6983, $2,773.40, to Valentine and Company, in payment of $2,830 invoice less discount.
14 Sold merchandise on account to Velez Appliance, invoice no. 6485, $2,100.
14 Received check from L. Parrish, $693.84, in payment of $755 invoice, less return of $47 and less discount.
19 Bought merchandise on account from Crawford Products, invoice no. 7281, $3,700; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to invoice, $142 (total $3,842).
Jan. 21 Issued Ck. No. 6984, $245, to A. Bautista for miscellaneous expenses not recorded previously.
21 Cash sales for January 11 through January 20, $3,689.
23 Received credit memo no. 163, $87, from Crawford Products for merchandise returned.
29 Sold merchandise on account to Bradford Supply, invoice no. 6486, $1,697.20.
29 Issued Ck. No. 6985 to Western Freight, $64, for freight charges on merchandise purchased January 4.
31 Cash sales for January 21 through January 31, $3,862.
31 Issued Ck. No. 6986, $65, to M. Pineda for miscellaneous expenses not recorded previously.
31 Recorded payroll entry from the payroll register: total salaries, $5,900; employees' federal income tax withheld, $795; FICA taxes withheld, $333.35.
31 Recorded the payroll taxes: FICA taxes, $451.35; state unemployment tax, $265.50; federal unemployment tax, $47.20.
31 Issued Ck. No. 6987, $4,771.65, for salaries for the month.
31 L. Yang, the owner, withdrew $1,000 for personal use, Ck. No. 6988.
Required:
1. Record the transactions for January using a general journal, page 1. Assume the periodic inventory method is used. The chart of accounts is as follows:
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111 Cash
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311 L. Yang, Capital
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113 Accounts Receivable
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312 L. Yang, Drawing
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114 Merchandise Inventory
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411 Sales
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115 Supplies
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412 Sales Returns and Allowances
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116 Prepaid Insurance
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413 Sales Discounts
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121 Equipment
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511 Purchases
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212 Accounts Payable
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512 Purchases Returns and Allowances
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215 Salaries Payable
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513 Purchases Discounts
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216 Employees' Federal Income
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514 Freight In
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Tax Payable
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621 Salary Expense
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217 FICA Taxes Payable
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622 Payroll Tax Expense
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218 State Unemployment Tax
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627 Rent Expense
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219 Federal Unemployment Tax Payable
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631 Miscellaneous Expense
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2. Post daily all entries involving customer accounts to the accounts receivable ledger.
3. Post daily all entries involving creditor accounts to the accounts payable ledger.
4. Post daily the general journal entries to the general ledger. Write the owner's name in the Capital and Drawing accounts.
5. Prepare a trial balance.
6. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?