Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Le

Question

Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Ledgers

AquaFresh Water Testing Service was established on April 16. AquaFresh uses field equipment and field supplies (chemicals and other supplies) to analyze water for unsafe contaminants in streams, lakes, and ponds. Transactions related to purchases and cash payments during the remainder of April are as follows:

Required:

1. Journalize the transactions (in chronological order as presented in the data) for April. Use a purchases journal and a cash payments journal, and a two-column general journal. Use debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:

At the points indicated in the narrative of transactions, post to the following accounts in chronological order in the accounts payable subsidiary ledger:

For those boxes in which no entry is required, leave the box blank. If no other account is needed in the "Other Accounts Dr." column select "No Entry Required".

2. Post the individual entries in chronological order (Other Accounts columns of the purchases journal and the cash payments journal and both columns of the general journal) to the appropriate general ledger accounts. Post to the subsidiary ledger in chronological order. When posting to the general ledger, post in chronological order. However, if there is more than one entry on the same date, post transactions from the purchases journal first, then the cash payments journal before posting from the general journal.

3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger.

For those boxes in which no entry is required, leave the box blank.

Post transactions in chronological order. However, if there is more that one transaction on the same date, post from the purchases journal first, then from the cash payments journal before posting from the general journal. (Because the problem does not include transactions related to cash receipts, the cash account in the ledger will have a credit balance.)

4. Prepare a schedule of the accounts payable creditor balances.

5. All are reasons why AquaFresh might consider using a subsidiary ledger for the field equipment EXCEPT:

To secure lower pricing on equipment purchases

April 16. Issued Check No. 1 in payment of rent for the remainder of April, $3,500. April 16. Purchased field supplies on account from Hydro Supply Co., $5,340. April 16. Purchased field equipment on account from Pure Equipment Co., $21,450. April 17. Purchased office supplies on account from Best Office Supply Co., $510. April 19. Issued Check No. 2 in payment of field supplies, $3,340, and office supplies, $400. Post the journals to the accounts payable subsidiary ledger. April 23. Purchased office supplies on account from Best Office Supply Co., $660. April 23. Issued Check No. 3 to purchase land, $140,000. April 24. Issued Check No. 4 to Hydro Supply Co. in payment of April 16 invoice, $5,340. April 26. Issued Check No. 5 to Pure Equipment Co. in payment of April 16 invoice, $21,450. Post the journals to the accounts payable subsidiary ledger. April 30. Acquired land in exchange for field equipment having a cost of $12,000. April 30. Purchased field supplies on account from Hydro Supply Co., $7,650. April 30. Issued Check No. 6 to Best Office Supply Co. in payment of April 17 invoice, $510. April 30. Purchased the following from Pure Equipment Co. on account: field supplies, $1,340, and field equipment, $4,700. April 30. Issued Check No. 7 in payment of salaries, $29,400. Post the journals to the accounts payable subsidiary ledger.

Explanation / Answer

General Journal Date Ref. Details Debit Credit 16-Apr-08 4-004 Rent Expense 3,500.00 1-001 Cash 3500.00 1-010 Field Supplies 5,340.00 2-001 Accounts Payable 5340.00 1-501 Equipment 21,450.00 2-001 Accounts Payable 21450.00 17-Apr-08 1-005 Office Supplies 510.00 2-001 Accounts Payable 510.00 19-Apr-08 2-001 Accounts Payable 3,340.00 1-001 Cash 3340.00 19-Apr-08 2-001 Accounts Payable 400.00 1-001 Cash 400.00 23-Apr-08 1-005 Office Supplies 660.00 2-001 Accounts Payable 660.00 23-Apr-08 1-505 Land 140,000.00 1-001 Cash 140000.00 24-Apr-08 2-001 Accounts Payable 5,340.00 1-001 Cash 5340.00 26-Apr-08 2-001 Accounts Payable 21,450.00 1-001 Cash 21450.00 30-Apr-08 1-505 Land 12,000.00 1-501 Equipment 12,000.00 30-Apr-08 1-010 Field Supplies 7,650.00 2-001 Accounts Payable 7650.00 30-Apr-08 2-001 Accounts Payable 510.00 1-001 Cash 510.00 30-Apr-08 1-010 Field Supplies 1,340.00 2-001 Accounts Payable 1340.00 30-Apr-08 1-501 Equipment 4,700.00 2-001 Accounts Payable 4700.00 30-Apr-08 4-007 Salaries Expense 29,400.00 2-001 Accounts Payable 29400.00 PURCHASES JOURNAL PAGE 1 Date Account Credited Post. Ref. Accounts Payable Cr. Field Supplies Dr. Office Supplies Dr. Other Accounts Post. Amount Dr. Ref. Apr-16 Hydro Supply Co. ? 5340 5340 No Entry Required Apr-16 Pure Equipment Co. ? 21450 Field Equipment 21450 Apr-17 Best Office Supply Co. ? 510 510 No Entry Required Apr-23 Best Office Supply Co. ? 660 660 No Entry Required Apr-30 Hydro Supply Co. ? 7650 7650 No Entry Required Apr-30 Pure Equipment Co. ? 6040 1340 Field Equipment 4700 Apr-30 CASH PAYMENTS JOURNAL PAGE 1 Date Ck. No. Account Debited Post. Ref. Other Accounts Accounts Cash Cr. Dr. Payable Dr. Apr-16 1 Rent Expense 3500 3500 Apr-19 2 Field Supplies 3340 3340 2 Office Supplies 400 400 Apr-23 3 Land 140000 140000 Apr-24 4 Hydro Supply Co. ? 5340 5340 Apr-26 5 Pure Equipment Co. ? 21450 21450 Apr-30 6 Best Office Supply Co. ? 510 510 Apr-30 Salary Expense 29400 29400 Apr-30 Total 172900 31040 203940 JOURNAL PAGE 1 Date Description Post. Ref. Debit Credit Apr-30 Land 12000 Field Equipment 12000 ACCOUNTS PAYABLE SUBSIDIARY LEDGER Date Item Post. Ref. Debit Credit Balance Account: Best Office Supply Co. Apr-17 Office Supplies 510 510 Apr-23 Office Supplies 660 1170 Apr-30 Cash 510 660 Account: Hydro Supply Co. Apr-16 Field Supplies 5340 5340 Apr-24 Field Supplies 7650 12990 Apr-30 Cash 5340 7650 Account: Pure Equipment Co. Apr-16 Field Equipment 21450 21450 Apr-26 Field Equipment 4700 26150 Apr-30 Cash 21450 4700 AQUAFRESH WATER TESTING SERVICE Accounts Payable Creditor Balances Apr-30 Best Office Supply Co. 660 Hydro Supply Co. 7650 Pure Equipment Co. 4700 Total accounts payable Posting Acct 1-001 Cash Date Acct Description Debit Credit Net 16-Apr-08 4-004 Rent Expense - 3,500.00 (3,500.00) 19-Apr-08 2-001 Accounts Payable - 3,740.00 (3,740.00) 23-Apr-08 1-505 Land - 140,000.00 (140,000.00) 24-Apr-08 2-001 Accounts Payable - 5,340.00 (5,340.00) 26-Apr-08 2-001 Accounts Payable - 21,450.00 (21,450.00) 30-Apr-08 2-001 Accounts Payable - 510.00 (510.00) Total - 174,540.00 (174,540.00) Posting Acct 2-001 Accounts Payable Date Acct Description Debit Credit Net 16-Apr-08 1-501 Equipment - 21,450.00 (21,450.00) 1-010 Field Supplies - 5,340.00 (5,340.00) 17-Apr-08 1-005 Office Supplies - 510.00 (510.00) 19-Apr-08 1-001 Cash 3,740.00 - 3,740.00 23-Apr-08 1-005 Office Supplies - 660.00 (660.00) 24-Apr-08 1-001 Cash 5,340.00 - 5,340.00 26-Apr-08 1-001 Cash 21,450.00 - 21,450.00 30-Apr-08 1-001 Cash 510.00 - 510.00 1-501 Equipment - 4,700.00 (4,700.00) 4-007 Salaries Expense - 29,400.00 (29,400.00) 1-010 Field Supplies - 8,990.00 (8,990.00) Total 31,040.00 71,050.00 (40,010.00) Posting Acct 4-004 Rent Expense Date Acct Description Debit Credit Net 16-Apr-08 1-001 Cash 3,500.00 - 3,500.00 Total 3,500.00 - 3,500.00 Posting Acct 1-501 Equipment Date Acct Description Debit Credit Net 16-Apr-08 2-001 Accounts Payable 21,450.00 - 21,450.00 30-Apr-08 2-001 Accounts Payable 4,700.00 - 4,700.00 1-505 Land - 12,000.00 (12,000.00) Total 26,150.00 12,000.00 14,150.00 Posting Acct 1-005 Office Supplies Date Acct Description Debit Credit Net 17-Apr-08 2-001 Accounts Payable 510.00 - 510.00 23-Apr-08 2-001 Accounts Payable 660.00 - 660.00 Total 1,170.00 - 1,170.00 Posting Acct 4-007 Salaries Expense Date Acct Description Debit Credit Net 30-Apr-08 2-001 Accounts Payable 29,400.00 - 29,400.00 Total 29,400.00 - 29,400.00 Posting Acct 1-010 Field Supplies Date Acct Description Debit Credit Net 16-Apr-08 2-001 Accounts Payable 5,340.00 - 5,340.00 30-Apr-08 2-001 Accounts Payable 8,990.00 - 8,990.00 Total 14,330.00 - 14,330.00 Posting Acct 1-505 Land Date Acct Description Debit Credit Net 23-Apr-08 1-001 Cash 140,000.00 - 140,000.00 30-Apr-08 1-501 Equipment 12,000.00 - 12,000.00 Total 152,000.00 - 152,000.00

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.