On December 1, the Accounts Receivable Control Account Balance in the General

question 85

Essay

On December 1, the accounts receivable control account balance in the general ledger of Mitus Company was $9,000. The accounts receivable subsidiary ledger contained the following detailed customer balances: Acme $1,500, Baker $2,100, Fare $2,600, and Grote $2,800. The following information is available from the company's special journals for the month of December:
Cash Receipts Journal: Cash received from Fare $1,900, from Acme $1,600, from Santos $1,700, and from Baker $1,800.
Sales Journal: Sales to Santos $2,300, to Fare $1,700, to Acme $2,300, and to Grote $2,400.
Additionally, Fare returned defective merchandise for credit for $900. Acme returned defective merchandise for $600 which he had purchased for cash.
Instructions
(a) Using T-accounts for Accounts Receivable Control and the detail customer accounts, post the activity for the month of December.
(b) Reconcile the accounts receivable control account with the subsidiary ledger by preparing a detail list of customer balances at December 31.

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Definitions:

Cash Flow Hedge

A financial strategy used to manage the risk of fluctuating cash flows due to changes in exchange rates, interest rates, or commodity prices.

Net Method

An accounting system that records transactions with their net effect, considering any discounts or allowances for prompt payment.

Loan Liability

A financial obligation representing borrowed funds that the borrower is legally required to repay to the creditor, typically with interest.

Foreign Exchange Rate

The rate at which one currency can be exchanged for another, often used in international trade and investment.