AB-10SE - Horngren'S Financial And Managerial Accounting

Question

Recording transactions in a cash payments journal

 

Jan. 5 Issued check no. 430 to purchase equipment for cash, \(1,700.

7 Purchased merchandise inventory for cash, \)450, issuing check no. 431.

18 Paid Kat Co. amount owed, \(775, less \)100 discount. Issued check no.  

432.

28 Issued check no. 433 to pay utilities, $260. The bill was just received, 

andthere is no liability recorded.

 

Use the following cash payments journal to record the preceding transactions.

 

Cash Payments Journal                                                 Page 8
Date	Ck. No.	Account Debited	Post. Ref.	Other Accounts DR	Accounts Payable DR	Merchandise Inventory CR	Cash CR
2018

Step-by-Step Solution

Answer

Total Cash payment:$3,085

Step1: Cash Payment Journal

A cash payment journal is used to record all cash payment-related transactions. Cash payments may be related to the payment to creditors, expenses, or other cash purchases. Cash payments also include payments by check. 

Step 2: Posting to cash payment journal

Cash Payments Journal                                                 Page 8
Date	Ck. No.	Account Debited	Post. Ref.	Other Accounts DR	Accounts Payable DR	Merchandise Inventory CR	Cash CR
2018
Jan 5	430	Equipment		$1,700			$1,700
7	431	Merchandise Inventory		450			450
18	432	Kat Co.			$775	$100	675
28	433	Utilities		260			260