AB-19E - Horngren'S Financial And Managerial Accounting

Question

Recording transactions—purchases journal

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Apr. 2 Purchased merchandise inventory on credit terms of 3/10, n/60 from

Vanderbilt Co., \(2,400.

5 Issued check no. 820 to purchase equipment for cash, \)3,600.

11 Purchased merchandise inventory for cash, \(750, issuing check no. 821.

12 Issued check no. 822 to pay Vanderbilt Co. net amount owed from 

Apr. 2.

19 Purchased office supplies on account from Downing Supplies, \)500. 

Termswere n/EOM.

24 Purchased merchandise inventory on credit terms of net 30 from

Wilmington Sales, \(1,900.

28 Issued check no. 823 to pay for insurance coverage, debiting Prepaid

Insurance for \)1,000.

29 Issued check no. 824 to pay rent for the month, $1,250.

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Requirements

1. Prepare headings for a purchases journal. Journalize the transactions that should berecorded in the purchases journal. The company uses the perpetual inventory system.

 

2. Total each column of the purchases journal.

 

Step-by-Step Solution

Answer

Total Accounts Payable (Cr.):$4,800

Total Merchandise Inventory (Dr.):$4,300

Total Office Supplies (Dr.):$500

Step1: Purchase Journal

Purchase Journal                                                        Page 6
	Other Accounts DR
Date	Vendor Account Credited	Terms	Post. Ref.	Accounts Payable CR	Merchandise Inventory DR	Office Supplies DR	Account Title	Post. Ref.	Amount
Apr 2	Vanderbilt Co.	3/10, n/60		$2,400	$2,400
19	Downing Supplies	n/EOM		500		$500
24	Wilmington	n/30		1,900	1,900

Step 2: Total of Purchase Journal

Purchase Journal                                                        Page 6
	Other Accounts DR
Date	Vendor Account Credited	Terms	Post. Ref.	Accounts Payable CR	Merchandise Inventory DR	Office Supplies DR	Account Title	Post. Ref.	Amount
Apr 2	Vanderbilt Co.	3/10, n/60		$2,400	$2,400
19	Downing Supplies	n/EOM		500		$500
24	Wilmington	n/30		1,900	1,900
Apr 30	Total			$4,800	$4,300	$500