assume that alcorn uses the periodic inventory system 646357

Alcorn Industries completes these transactions during July of the current year (the terms of all its credit sales are 2/10, n/30).

July 1 Purchased $6,300 of merchandise on credit from Tahoe Company, invoice dated June 30, terms 2/10, n/30.

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3 Issued Check No. 300 to The Weekly for advertising expense, $575.

5 Sold merchandise on credit to Kim Newsom, Invoice No. 918, for $18,400 (cost is $9,700).

6 Sold merchandise on credit to Ruth Baker, Invoice No. 919, for $7,500 (cost is $4,300).

7 Purchased $1,050 of store supplies on credit from Pryor, Inc., invoice dated July 7, terms n/10 EOM.

8 Received a $150 credit memorandum from Pryor, Inc., for the return of store supplies received on July 7.

9 Purchased $37,710 of store equipment on credit from Caro’s Supply, invoice dated July 8, terms n/10 EOM.

10 Issued Check No. 301 to Tahoe Company in payment of its June 30 invoice, less the discount.

13 Sold merchandise on credit to Stephanie Meyer, Invoice No. 920, for $8,350 (cost is $5,030).

14 Sold merchandise on credit to Kim Newsom, Invoice No. 921, for $4,100 (cost is $2,800).

15 Received payment from Kim Newsom for the July 5 sale, less the discount.

15 Issued Check No. 302, payable to Payroll, in payment of sales salaries expense for the first half of the month, $30,620. Cashed the check and paid employees.

15 Cash sales for the first half of the month are $121,370 (cost is $66,330). (Cash sales are recorded daily using data from the cash registers but are recorded only twice in this problem to reduce repetitive entries.)

16 Received payment from Ruth Baker for the July 6 sale, less the discount.

17 Purchased $8,200 of merchandise on credit from Dixon Company, invoice dated July 17, terms 2/10, n/30.

20 Purchased $750 of office supplies on credit from Caro’s Supply, invoice dated July 19, terms n/10 EOM.

21 Borrowed $20,000 cash from College Bank by signing a long term note payable.

23 Received payment from Stephanie Meyer for the July 13 sale, less the discount.

24 Received payment from Kim Newsom for the July 14 sale, less the discount.

24 Received a $2,400 credit memorandum from Dixon Company for the return of defective merchandise received on July 17.

26 Purchased $9,770 of merchandise on credit from Tahoe Company, invoice dated July 26, terms 2/10, n/30.

27 Issued Check No. 303 to Dixon Company in payment of its July 17 invoice, less the return and the discount.

29 Sold merchandise on credit to Ruth Baker, Invoice No. 922, for $28,090 (cost is $22,850).

30 Sold merchandise on credit to Stephanie Meyer, Invoice No. 923, for $15,750 (cost is $9,840).

31 Issued Check No. 304, payable to Payroll, in payment of the sales salaries expense for the last half of the month, $30,620.

31 Cash sales for the last half of the month are $79,020 (cost is $51,855).

Assume that Alcorn uses the periodic inventory system.

Required

1. Prepare a general journal, a purchases journal like that in Exhibit 7A.3, and a cash disbursements journal like that in Exhibit 7A.4. Number all journal pages as page 3. Review the July transactions of Alcorn Company (Problem 7 1B) and enter those transactions that should be journalized in the general journal, the purchases journal, or the cash disbursements journal. Ignore any transaction that should be journalized in a sales journal or cash receipts journal.

2. Open the following general ledger accounts: Cash, Inventory, Office Supplies, Store Supplies, Store Equipment, Accounts Payable, Long Term Notes Payable, R. Alcorn, Capital, Purchases, Purchases Returns and Allowances, Purchases Discounts, Sales Salaries Expense, and Advertising Expense. Enter the June 30 balances of Cash ($100,000), Inventory ($200,000), Long Term Notes Payable ($200,000), and R. Alcorn, Capital ($100,000). Also open accounts payable subsidiary ledger accounts for Tahoe Company, Pryor, Inc., Caro’s Supply, and Dixon Company.

3. Complete parts 3 and 4 of Problem 7 3B using the results of parts 1 and 2 of this problem.

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