Answer:
<h2>Lasting Summer Inc.</h2>
a1) Revenue Journal
Date Description Invoice Ref Amount
Oct. 3 Palace Corp. 622 $2,890
Oct. 8 Sunny Style Inc. 623 1,940
Oct. 18 Amex Services Inc. 624 2,970
Oct. 28 Wayfarer Co. 625 900
Oct. 31 Accounts Receivable $8,700
a2) Cash Receipts Journal
Date Description Ref Amount
Oct. 5 Champion Co. $1,060
Oct. 12 Wayfarer Co. 1,450
Oct. 23 Palace Corp. 622 2,890
Oct. 30 Rogers Co. 120
Oct. 31 Accounts Receivable $5,400
Oct. 31 Cash Account $120
b1) Listing of the Account Receivable Customer Balances:
Champion Co. -$10
Wayfarer Co. 690
Sunny Style Inc. 1940
Amex Services 2,970
Total $5,590
b2) Verification of agreement with Accounts Receivable Control Account:
The total of accounts receivable listing and the Accounts Receivable Control Account agree.
c) Use of a Subsidiary Ledger for Accounts Receivable:
Subsidiary Ledger for the Accounts Receivable is kept in order to record the individual customers' accounts and their business transactions with the entity. The general ledger account for the same is a total account that summarizes the individual accounts and acts as a control measure to ensure accuracy.
Explanation:
a) Account Balances:
1. Accounts Receivable
Beginning balance $2,290
Revenue Journal 8,700
Cash Journal -5,400
Ending balance $5,590
2. Champion Co.
Beginning balance $1,050
Oct. 5 Cash -1,060
Ending balance $10 CR
3. Wayfarer Co.
Beginning balance $1,240
Oct. 28 Inv.625 900
Oct. 14 Cash -1,450
Ending balance $690
4. Palace Corp.
Oct. 3 Revenue Inv. 622 $2,890
Oct. 23 Cash 622 2,890
5. Sunny Style Inc.
Oct. 8 Revenue Inv.623 1,940
6. Amex Services Inc.
Oct. 18 Revenue Inv.624 2,970
b) A subsidiary ledger is a group of similar accounts whose combined balances equal the balance in a specific general ledger account. In the general ledger, there is an account that summarizes a subsidiary ledger account balances. It is called a control account or master account.
