Question

Audited Balance 10/31/2018 Preliminary Balance 10/31/2019

Sales* $56,038,100 $61,641,910
Executive salaries 544,881 583,956
Factory hourly payroll 10,402,954 11,697,055
Factory supervisors' salaries 659,285 770,600
Office salaries 1,948,821 2,694,881
Sales commissions 2,950,799 2,829,500

Sales have increased 10% over prior year. 3% percent of that is due to an increase in the average selling price. The remaining 7% is attributed to an increase in the number of units sold.

Required:
Journalize the entries.

Answer 1

Accounts Receivable (Dr.) $61,641,910

Sales (Cr.) $61,641,910

Executive Salaries Expense (Dr.) $58,956

Executive Salaries Payable (Cr.) $58,956

Hourly Payroll Expense (Dr.) $11,697,055

Hourly Payroll Payable (Cr.) $11,697,055

Factory Supervisor Salaries Expense (Dr.) $770,600

Factory Supervisor Salaries Payable (Cr.) $770,600

Office Salaries Expense (Dr.) $58,956

Office Salaries Payable (Cr.) $58,956

Sales Commission (Dr.) $2,829,500

Cash (Cr.) $2,829,500

Step-by-step explanation:

The sales rise is 10% due to out of which 3% is due to rise in selling price and the rest 7% rise is due to number of units sold.

The 3% rise accounts for $1,681,143 and the 7% increase is $3,922,667.