Exercise 5 – Recording Transactions;

(1) Quotes

Sony Enterprise issued the following quotes for the months of January and February
2004.
Jan 11: Issued sales quote no. SQ112 for 1 TV sets at $2,300 each to Genu Plc.
The quotation is to expire 15 days after. The quotation is issued in
response to customer purchase order no. 345. 2/10,n/30 is
indicated as terms onto the quotation. The quotation is subject to sales
tax and the items are to be shipped to the address of Genu Plc.

Jan 26: Issued sales quote no. SQ113 for 2 refrigerators at $3,400 to Acer
Trading (new customer; P.O.Box 5411). The quotation is to expire
30 days after. The quotation is issued in response to customer
purchase order no. 213. The quotation is subject to 3/8,n/30 and subject to
sales tax. The items are to be shipped to the address of Acer Trading.
Feb 2: Issued sales quote no. SQ114 for 2 computers at $6,000 to Excel Office.
Good thru is Feb 28. The quotation is issued in response to customer
purchase order no. 106. The quotation is subject to 3/7,n/30 terms and
subject to sales tax. The items are to be shipped to the address of Excel
Office.

Required:
(i) Record the above events in the appropriate journal;
(ii) Preview the quote register for the period ended February 28, 2004

(2) Sales Orders

Jan 15: Issued sales order no. SO#001 for Genu plc. for 1 TV set at $2,200 to be
shipped 10 days later. Customer purchase order No. 345 was
received.
Jan 27: Converted the sales quote issued on January 26 to sales order No. SO#002.
The goods are to be shipped 10 days after.
Feb 6: Issued SO#003 for Excel Office for 1 electric typewriter at $,4,600 to be
issued 5 days later. Customer purchase order No. 448 was received.
Feb 22: Issued SO#004 for Anna Inc. for 1 computer at $6,400 and 1 printer at
$3,000 to be issued 5 days later. Customer purchase order No. 658 was
received.
Required:

1
(i) Record the above events;
(ii) Preview sales order journal, sales order register, and sales order report as at
February 29th 2004.
(iii) Check that SQ113 is deleted from the quote register for the conversion event
tracked out;

(3) Sales Invoices

Jan 25: Issued SI#001 for 1 TV set shipped to Genu Plc. Sales order no. SO#001
had been issued for this shipment earlier.
Jan 27: Sold 1 stove to Duno Plc (new customer; P.O.Box 1119). at a price of
$3,000. No sales order had been issued in connection with this shipment.
Issued SI#002.
Feb 27: Sold 1 computer to Anna Inc. at $6,400 for which SO#004 had been
issued earlier. The amount was collected immediately when the good had
been shipped. Issued sales invoice no. 003.

Feb28: Converted SQ#114 to sales invoice no. 004 with the same term.

Required:

(i) Record the above events in the appropriate journal;

(ii) Preview the ‘sales journal’, ‘invoice register’ and ‘items sold to customers’
reports for the period ended February 28, 2004;
(iii) Is the sales order report updated for the goods shipped;
(iv) Preview the quote register. Are the quotes converted to sales invoice existing
into the quote register?
(v) Preview the cost of goods sold journal;
(vi) Preview the inventory profitability report as at February 28th 2004;
(vii) Preview the inventory stock status report as at February 28th 2004;
(viii) Preview the inventory valuation report as at February 28th 2004;
(ix) Tell out the inventory balance for each inventory type as at February 28,
2004;

2
 (4) Cash Collection
Assume all the collections are deposited into the bank.

Jan 04: Received the amount involved on sales invoice no. S311; receipt no.897
and deposit ticket no. 1613;
Jan 04: Received the amount involved on sales invoice no. S318; receipt no. 898
and deposit ticket no. 1614
Jan 10: Received $50,000 cash from issuance of common stock at par. Receipt
No. 899. The amount was deposited into cash in bank with deposit ticket
no. 1615.
Feb 5: Received amount outstanding on sales invoice no. 002. Make sure that
2/10, n/30 terms was included while recording the sales invoice.
Feb 25: Collected the amount outstanding from sales invoice no. 001. Make sure
that terms 2/10,n/30 had been inserted while entering the sales invoice.
Receipt no. 900 and deposit ticket no. 1616 were prepared;
March 7: Received the amount outstanding on sales invoice no. 004; receipt no. 901
and deposit ticket no. 1617;
Required:
(i) Record the above events in the appropriate journal;
(ii) Preview the cash in bank account in the GL. How much balance does it read
in as at February 28th 2004? What about the balance on March 31st 2004;
(iii) Check that the sum of the customer accounts in the customer ledger is
equal to receivable controlling accounts in the GL;
(iv)Preview the trial balance as at March 31st , 2004;
(v) Preview the customers ledger as at March 31st 2004;

3
(5) Purchase Orders;
Jan 10: Issued purchase order no. to HP Trading to buy 50 printers at $2,100 each;
Terms 2/10,n/30; Good thru is Jan 25, 2004;
Jan 12: Issued purchase order no. PO155 to GP Electronics to buy 26 TV sets at
$2,000 each at purchase terms 3/12; n/30. This order issued is valid only
for 10 days;
Jan 16: Issued purchase order no. PO156 to GMAT Electronics (new vendor; ID
no. V07) to acquire 20 at $1,500 scanners (new inventory; inventory ID
204). Good thru is January 26.

Feb 18: Issued purchase order no. PO 157 to Office Solutions to acquire 16
computers at $5,400. Good thru is Feb 28.

Required:

(i) Record the above entries in the proper journal;

(ii) Preview the purchase order journal, purchase PO154order register, and
purchase order report as of February 28th 2004;
(iii) Are GL accounts to be affects with these events recoded? Check.

4
(6) Purchase or Receipt of Inventory;
Jan 15: Received all the items indicated on PO154 at a price of $2,150 with the
same terms. Issued purchase invoice PI654;
Jan 22: Acquired 10 units of TV sets from Adobe Electronics (new vendor) at
$1,900 each. PI 655 is issued and no purchase order had been
issued earlier in connection with this purchase. Purchase terms is 3/7,
n/40. An amount of $10,000 is paid at the time of purchase with
payment reference no. of 1112;
Jan 22: Received 20 TV sets for those indicated on purchase order no. PO155 at
$2,000 each. Terms of purchase was altered to 2/10,n/30.
Purchase invoice no. PI656 is issued. It was noticed that the vendor
hasn’t sent the bills by the time the goods were received.
Feb 26: Acquired 16 computers at $5,400 as a result of purchase order PO157
issued. Purchase terms is 1/10,n/30. The entire amount was paid
by the time the items were received. Purchase invoice no. 657 is issued.
March 10: Acquired 20 VCR (under inventory house utensils and inventory ID 104)
at $1,400 each from Venture Trading (new vendor; vendor ID
V07) at terms 3/10, n/30. purchase invoice no. PI158 is issued. No
sales purchase order had been issued earlier in connection with this purchase;
Required:
(i) Record the above entries in the appropriate journal;
(ii) Preview balances of each inventory items as at March 31st, 2004;
(iii) Are the controlling payable GL accounts in agreement with balances in the
vendors ledger?
(iv) Preview the purchase order report and purchase order register as at March 31st
2004. What differences the two reports are having?
(v) How is the purchase order report up-dated for the above the above purchases
affected?

5
(7) Cash Payments;
Payments from bank account no. B-5300.
Jan 2: Issued ck#210 in settlement of purchase invoice #432.
Jan 9: Issued ck#211 in settlement of purchase invoice #460.
Jan 10: Issued ck#212 in settlement of purchase invoice #455.
Jan 12: Issued ck#213 in settlement of purchase invoice #654.
Jan 14: Paid dividends to owners; $12,000. Issued ck# 214.
Jan 18: Issued ck#215 in settlement of purchase invoice #450.
Jan 20: Issued ck#216 in settlement of purchase invoice #428.
Jan 31: Issued ck# 217 to pay salary expense of the month; $8,000 (net pay) net of
I/tax of $2,000 and pension fund of $1,000. The gross amount of the
weekly salary is $11,000. You need to maintain a new ‘pension
fund payable’ account (account type: other current liability; account
number 2005)
Feb 10: Issued ck#218 ($6,000) for Insurance Co. as two years insurance premium
since Feb 1, 2004;
Feb 28: Issued ck# 212 to pay salary expense of the month; $8,000 (net pay) net of
I/tax of $2,000 and pension fund of $1,000. The gross amount of the
weekly salary is $11,000.
March 4: Issued ck# 219 in settlement of purchase invoice #657.
March 8: Issued ck#220 in settlement of purchase invoice #655.
March 10: Issued ck# 221 for $1,000 to open a new bank account B-5500 at
Awash bank. You need to maintain a new ‘Cash in bank: B-5500’
account (account type: cash; account number 1003)
March 12: Issued ck #222 for $600 to pay telephone expense for the month of
February 2004. (Record into ‘utilities expense’ account: new
account with account no. 6008). You may record this transaction from ‘write
checks’ category of the ‘task’ menu.

6
Payments from the petty cash:
Jan 2: Paid $80 for advertising. Prepared CPV#301.
Jan 10: Paid $20 for loading (miscellaneous expense). Prepared CPV#302.
You may record the following two transactions from ‘write checks’ category of the ‘task’
menu.
Jan 22: Paid $60 for repair of office equipment. (Record into ‘repair expense’
account: new account with account no. 6009). Prepared CPV#303.
Jan 28: Paid $70 for electric bill of the month (utilities expense).

7
Transactions on bank account no. B-5500:
Jan 10: Received and deposited $60,000 from issuance of shares at par value.
Receipt No. 906. The amount was deposited into cash in bank with
deposit ticket no. 2020.
Jan 20: Issued ck#001 for office equipment acquired; $10,000 for the firm’s own
use. Issued ck#001.
March 19: Issued ck#002 for settlement of purchase invoice no. 158.

Required:
(i) Record the above transactions in the proper journal after selecting the proper
‘cash’ account affected;
(ii) Preview the cash disbursement journal for the following ‘cash’ accounts
separately:
(a) Cash account no. B-5300;
(b) Cash account no. B-5500; and
(c) Petty cash
(iii) Preview the check register being separated for each ‘cash’ account; for
(a) Cash account no. B-5300;
(b) Cash account no. B-5500; and
(c) Petty cash
(iv) Preview the trial balance as at March 31st, 2004;
(v) Preview the details of the accounts in the general ledger as at March 31st 2004;
(vi) Determine the total cash balance as at March 31st 2004;

8
(8) Other Transactions;

Returns

Feb 28: Returned 2 of the computers purchased on February 26 for the fact that
they are not in congruent with the specifications indicated. Debit
memo #001
March 02: Excel Office returned one of the computers that had been sold on February
28 on sales invoice no. 004. Credit memo #001
March 12: Returned 3 of the VCR purchased on March 10 due to the reason that they
are not found to be functional. Debit memo #002

Inventory Adjustments

Jan 31: While performing a physical count, it is determined that unit of TV set on
hand to be 29. The difference is assumed to be stolen. JV#008/04.

Jan 31: Units of computer on hand is determined to be nil. Thus, it is determined

to bring the balance of computer on hand into zero. It is believed
that the discrepancy occurred while making physical counts in
earlier period (starting the Peachtree accounting system). JV#009/04.

Other Adjustments

Sony Enterprise records internal transactions at the end of every month.

Jan 31: Amount of supplies on hand allocable for future period is determined to be
#2,800. JV#010/04
Jan 31: Amount of insurance expired during the period is determined to be $3,400.
JV#011/04
Jan 31: Depreciation expense of the month on office equipment and machineries is
determined to be $1,200. JV#012/04
Jan 31: Depreciation expense of the month on building is determined to be $3,600.
JV#013/04.

Required:

(i) Record the above transactions in the proper journal;

(ii)