JOURNALIZING A PURCHASES DISCOUNT June 1. Paid cash on account to Champion Tennis Supply, $514.50, covering Purchase Invoice No. 331 for tennis equipment for $525.00 less 2% discount, $10.50. Check No. 315. 1 2 3 4 5 6 1. Write the date. 5. Record the discount amount. 2. Enter vendor name. 3. Record the check number. 6. Enter the credit amount. 4. Write the debit amount. Lesson 1-3, page 21

TAKING A DISCOUNT AFTER A PURCHASE RETURN June 1. Paid cash on account to Golf-Tee, Inc., $220.50, covering Purchase Invoice No. 332 for golf equipment for $275.00, less Debit Memorandum No. 20 for $50.00, and less 2% discount, $4.50. Check No 316. Amount owed on invoice: Original Purchase Invoice Amount (P332) Purchase Invoice Amount After Return Purchases Return (DM20) – = – 50.00 = $225.00 $275.00 Purchases discount: Purchase Invoice Amount After Return Purchases Discount Purchases Discount Rate  =  2% = $4.50 $225.00 Amount due after purchases discount: Purchase Invoice Amount After Return Total Amount Due Purchases Discount – = – $4.50 $220.50 = $225.00 Lesson 1-3, page 22

RECORDING ENTRIES IN A CASH PAYMENTS JOURNAL June 1. Paid cash for office supplies, $136.00. Check No. 317. 1 2 3 4 5 Supplies—Office 136.00 1. Write the date. 2. Enter the account title. 3. Record the check number. Cash 136.00 4. Write the debit amount. 5. Enter the credit amount. Lesson 1-3, page 23

CASH PAYMENT TO REPLENISH PETTY CASH June 30. Paid cash to replenish the petty cash fund, $402.00: office supplies, $164.00; store supplies, $136.00; advertising, $56.00; miscellaneous expense, $46.00. Check No. 350. 4 2 5 3 1 1. Write the date. 4. Write the debit amounts. 2. Enter the account titles. 5. Enter the credit amount. 3. Record check number. Lesson 1-3, page 24

RECONCILING A BANK STATMENT 20,525.23 4 Date: June 30, 20-- (1) Checkbook Balance $ __________ Bank Charges Description Amount Service Charge (2) Deduct Total Bank Charges $ __________ (3) Adj. Checkbook Balance $ __________ (4) Bank Balance $ __________ Outstanding Deposits Date Amount (5) Add Total Outstanding Deposits $ __________ (6) Total $ __________ Outstanding Checks Check No Amount (7) Deduct Total Outstanding Checks $ __________ (8) Adjusted Bank Balance $ __________ 33,231.55 1 6/30 12,828.52 12,828.52 5 352.80 12.80 Credit Card Fee 340.00 2 33,353.75 6 475.00 350 402.00 351 73.00 7 32,878.75 3 32,878.75 8 1. Enter checkbook balance. 4. Enter bank balance from statement. 2. Enter and add bank charges. 5. Enter and add outstanding deposits. 3. Deduct bank charges to obtain checkbook balance. 6. Add outstanding deposits to balance. 7. Deduct total outstanding checks. 8. Verify adjusted checkbook balance and adjusted bank balance are the same. Lesson 1-3, page 25

JOURNALIZING BANK CHARGES Miscellaneous Expense 12.80 June 30. Received bank statement showing bank service charge, $12.80. Memorandum No 18. Cash 12.80 Credit Card Fee Expense 340.00 June 30. Recorded credit card fee expense for June, $340.00. Memorandum No. 19. Cash 340.00 Lesson 1-3, page 26

TERMS REVIEW cash discount purchases discount petty cash bank statement Lesson 1-3, page 27