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R. Santiago Co. uses special journals and a general journal. The following transactions occurred during May 2014. May 1 R. Santiago invested $40,000 cash in the business. 2 Sold merchandise to Lawrie Co. for $6,300 cash. The cost of the merchandise sold was $4,200. 3 Purchased merchandise for $7,700 from J. Moskos using check no. 101. 14 Paid salary to H. Rivera $700 by issuing check no. 102. 16 Sold merchandise on account to K. Stanton for $900, terms n/30. The cost of the merchandise sold was $630. 22 A check of $9,000 is received from M. Mangini in full for invoice 101; no discount given. (a) Your answer is partially correct. Try again. Prepare a multiple-column cash receipts journal and record the transactions for May that should be journalized.

Paper For Above instruction

The task involves accurately recording specific financial transactions of R. Santiago Co. for May 2014 into a structured multiple-column cash receipts journal, considering the use of special journals and a general journal. The transactions include cash sales, purchases, receipts, and payments, and require proper categorization under the cash receipts journal, ensuring proper chronological order and correct account classification. Each transaction must be journalized methodically, with attention to detail, to maintain the integrity of the company's financial records.

In May 2014, R. Santiago Co. engaged in several financial activities, including cash sales, inventory purchases, salary payments, and receipt of payments from customers. These transactions exemplify typical retail and purchasing operations of a business that utilizes both special journals and a general journal for recording various transactions efficiently. Proper recording of these transactions enhances accuracy in financial reporting and aids in effective management decision-making.

The first transaction on May 1 involved R. Santiago investing $40,000 in cash, which would be recorded as an inflow into the cash account via the cash receipts journal. On May 2, the cash sale to Lawrie Co. for $6,300 is recorded, reflecting revenue earned directly in cash. The cost of goods sold associated with this sale, $4,200, needs to be recorded in the inventory or cost of goods sold account. May 3's purchase from J. Moskos for $7,700 is a credit purchase, typically recorded in the merchandise inventory account and would be documented separately in the purchases journal, not the cash receipts journal, unless payment was made immediately by check, which, in this case, was via check no. 101.

May 14's salary payment to H. Rivera of $700 via check no. 102 would be recorded in the cash disbursements journal, as it involves cash outflow. The sale on account to K. Stanton on May 16 for $900, with a cost of $630, would normally be recorded in the sales and cost of goods sold journals, not the cash receipts journal, as the receipt is on account, not cash. Lastly, May 22's receipt of $9,000 from M. Mangini for invoice 101 is a cash inflow, recorded in the cash receipts journal, representing the collection of an accounts receivable.

Properly journalizing these transactions involves categorizing each under the appropriate journal: cash receipts, purchases, sales, or general journal for adjustments or non-cash transactions. For the purpose of this assignment, focus on accurately recording the cash receipts and receipts-related transactions, including the initial cash investment, cash sales, and collection of receivables.

References

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  • Investopedia. (2021). Special Journals and Accounting. Retrieved from https://www.investopedia.com/terms/s/specialjournals.asp
  • AccountingTools. (2022). Multiple-Column Cash Receipts Journal. Retrieved from https://www.accountingtools.com/articles/multiple-column-cash-receipts-journal.html
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