Starter S7-2 SOLUTION ExampleComponent 1. ServerB. Processing and Storage 2. Bank checksA. Source Documents and Input Devices 3. ReportsC. Outputs 4. KeyboardA. Source Documents and Input Devices 5. SoftwareB. Processing and Storage 6. Financial statementsC. Outputs 7. Barcode scannerA. Source Documents and Input Devices Exercises E7-4 Cash Receipt Journal DateDebitCredit Other Accounts CashSales DiscountAccountsReceivableSalesRevenueAccountTitlePost.Ref.AmountCost of Goods Sold Dr Inventory Cr May 16220220I.Pax✓ 19120120F. Zehr✓ 24600600 30120120W. Singh✓380 311,060-460600---380 Problem P7-3B
Cash Receipt Journal DateDebitCredit Cost of goods sold Dr Inventory Cr. CashSalesDiscountAccountsReceivable Sales Revenue Other Accounts AccountsTitlePost.ref Amount May 37,1103407,450Alcon Labs ltd. May 93,4603,460Carl Ryther May 10110,000Land 110,000 May 19730730440 May 30 10,60010,6006,310 May 31131,90034010,91011,330Total 110,0006,750 1. Correct Entry - May 3 entry is correctly recorded. 2. Errors are identified as follows - (a) May 9 - On this day Accounts receivable is correctly posted but the sales account credited that is wrong both the accounts can not be on the credit side. In the cash receipt journal if we received cash then the amount should reflect in the cash column and not in the sales column.
(b) May 10 - On this date Land is sold for cash. The error was the amount of land shown under the sales revenue column but that is incorrect land sale is not the company's revenue. Correction is to record the land value in other accounts. (c) May 19 - On this date cash sale is properly recorded in cash but was omitted from the sales revenue account. Hence we have to put the amount in the sales revenue column to correct the cash sales i.e. $ 730 (d) May 30 - On this date, cash sales correctly recorded but sales revenue was not matching with the cash received against those sales revenue. Journal entry should be of the same amount it can not exceed the cash receipt nor less than cash received against those cash sales. hence corrected the amount to $ 10,600
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