AB-21E - Horngren'S Financial And Managerial Accounting

Question

The purchases journal of Southeastern Publishing Company follows:

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 2018                   Sept 2 Leap Tech n/30   830 830         5 Jell Supply n/30   155   155       13 Leap Tech 5/10, n/30   1,470 1,470         26 Fallon Equipment n/30   880     Equipment   880 Sep 30 Total                 Requirements 1. Total each column of the purchases journal. 2. Open four-column ledger accounts for Merchandise Inventory (118), Office Supplies(120), Equipment (150), and Accounts Payable (211). Post to these accountsfrom the purchases journal. Use dates and posting references in the accounts. 3. Open four-column accounts in the accounts payable subsidiary ledger for FallonEquipment, Jell Supply, and Leap Tech. Post from the purchases journal. Use datesand posting references in the ledger accounts. 4. Balance the Accounts Payable control account in the general ledger with the totalof the ending balances in the accounts payable subsidiary ledger.

Step-by-Step Solution

Answer

Merchandise Inventory Total Balance (DR.):$2,300

Office Supplies (DR.):$155

Equipment (DR.):$880

Accounts Payable (CR.):$3,335

Step1: Total of each column of purchase journal

Purchase Journal                                                                                                           Page 6             Other Accounts DR   Vendor Account Credited Terms Post. Ref. Accounts Payable CR Merchandise Inventory DR Office Supplies DR Account Title Post. Ref. Amount                       Leap Tech n/30   830 830           Jell Supply n/30   155   155         Leap Tech 5/10, n/30   1,470 1,470           Fallon Equipment n/30   880     Equipment   880   Total     $3,335 $2,300 $155     $880

Step 2: General Ledgers

Merchandise Inventory                                                                                 No.  118   Balance Date Post. Ref. Debit Credit Debit Credit Sept 30   $2,300   $2,300     Office Supplies                                                                                           No.  120   Balance Date Post. Ref. Debit Credit Debit Credit Sept 30   $155   $155     Equipment                                                                                                      No.  150   Balance Date Post. Ref. Debit Credit Debit Credit Sept 26   $880   $880     Accounts Payable                                                                                          No.  211   Balance Date Post. Ref. Debit Credit Debit Credit Sept 30     $3,335   $3,335

Step 3: Accounts Payable Subsidiary Ledgers

Fallon Equipment   Balance Date Post. Ref. Debit Credit Debit Credit Sept 26     $880   $880 Leap Tech   Balance Date Post. Ref. Debit Credit Debit Credit Sept 2     $830   $830 13     1,470   1,470   Jell Supply   Balance Date Post. Ref. Debit Credit Debit Credit Sept 5     $155   $155

Step 4: Balancing accounts payable subsidiary ledgers against accounts payable control ledger

General Ledger Accounts Payable Credit Balance $3,335 Subsidiary Ledger: Accounts Payable Vendor Balance Fallon Equipment $   880 Leap Tech   1,470 Jell Supply      155 Total Accounts Payable $3,335