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Presented below are the purchases and cash payments journals for Fornelli Co. for its first month of operations. PURCHASES JOURNAL Date Account Credited Ref. Amount July 4 Alvarado 6,800 5 Rees 8,100 11 Gallup 5,920 13 Werly 15,300 20 Mangus 7,900 Total 44,020 CASH PAYMENT JOURNAL Date Particular Ref. Total amount $ Purchase discount $ Details Accounts Payable Cash Purchase Other July 4 Supplies 600 600 10 Rees 8,019 81 8,100 11 Prepaid Rent 6,000 6,000 15 Alvarado 6,800 6,800 19 Owners Drawings 2,500 2,500 21 Werly 15,147 153 15,300 Total 39,066 234 30,200 9,100 In addition, the following transactions have not been journalized for July. The cost of all merchandise sold was 65% of the sales price. July 1 The founder, N. Fornelli, invests $80,000 in cash. 6 Sell merchandise on account to Dow Co. $6,200 terms 1/10, n/30. 7 Make cash sales totaling $8,000. 8 Sell merchandise on account to S. Goebel $4,600, terms 1/10, n/30. 10 Sell merchandise on account to W. Leiss $4,900, terms 1/10, n/30. 13 Receive payment in full from S. Goebel. 16 Receive payment in full from W. Leiss. 20 Receive payment in full from Dow Co. 21 Sell merchandise on account to H. Kenney $5,000, terms 1/10, n/30. 29 Returned damaged goods to N. Alvarado and received cash refund of $420. Instructions a) Journalize the transactions that have not been journalized in the sales journal and the cash receipts journal. b) Post to the accounts receivable and accounts payable subsidiary ledgers. Follow the sequence of transactions as shown in the problem.

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