JOURN ALIZING CASH PAYMENTS TR ANS ACTIONS Enter the following cash payments transactions in a general journal: Apr. 5 Issued Check No. 429 to Standard Industries for merchandise purchased March 27, $8,000, terms 2/10, n/30. Payment is made within the discount period. 19 Issued Check No. 430 to Finest Company for merchandise purchased April 10, $5,300, terms 1/10, n/30. A credit memo had been received on April 12 from Finest Company for merchandise returned, $300. Payment is made within the discount period after deduction for the return dated April 12. 21 Issued Check No. 431 to Funny Follies for merchandise purchased March 22, $3,250, terms n/30. 29 Issued Check No. 432 to Classic Data for merchandise purchased April 20, $7,000, terms 2/10, n/30. Payment is made within the discount period.

Question

Still sussing out bartleby?

Answer 1

BuyFind

College Accounting, Chapters 1-27 ...

22nd Edition

James A. Heintz + 1 other

Publisher: Cengage Learning

ISBN: 9781305666160

Solutions

Chapter

Section

Answer 2

BuyFind

College Accounting, Chapters 1-27 ...

22nd Edition

James A. Heintz + 1 other

Publisher: Cengage Learning

ISBN: 9781305666160

Solutions

Chapter

Section

Answer 3

Solutions

Chapter

Section

Answer 4

Chapter

Section

Answer 5

To determine

Journalize the transactions related to cash payments.

Explanation of Solution

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

Journalize the transactions related to cash payments.

Transaction on April 5:

Date		Account Titles and Explanations		Post. Ref.	Debit ($)	Credit ($)
April	5	Accounts Payable, S Industries			8,000
			Cash			7,840
			Purchases Discounts			160
		(Record cash paid for purchases on account)

Table (1)

Description:

Accounts Payable, S Industries is a liability account. Since the payable decreased, the liability decreased, and a decrease in liability is debited.
Cash is an asset account. Since cash is paid, asset account decreased, and a decrease in asset is credited.
Purchases Discounts is a contra-purchases or contra-costs account, and contra-purchases accounts increase the equity value, and an increase in equity is credited.

Working Note 1:

Compute purchases discount value.

Purchases discounts = {(Purchases–Purchase returns and allowances) × Discount percentage}= ($8,000–$0)×2%= $160

Working Note 2:

Compute amount of cash paid (Refer to Working Note 1 for purchase discount value).

Cash paid = (Purchases on account value–Purchases returns and allowances–Purchases discount value)= $8,000–$0–$160= $7,840

Transaction on April 19:

Date		Account Titles and Explanations		Post. Ref.	Debit ($)	Credit ($)
April	19	Accounts Payable, Company F			5,000
			Cash			4,950
			Purchases Discounts			50
		(Record cash paid for purchases on account)

Table (2)

Description:

Accounts Payable, Company F is a liability account. Since the payable decreased, the liability decreased, and a decrease in liability is debited.
Cash is an asset account. Since cash is paid, asset account decreased, and a decrease in asset is credited.
Purchases Discounts is a contra-purchases or contra-costs account, and contra-purchases accounts increase the equity value, and an increase in equity is credited.

Working Note 3:

Compute purchases discount value.

Purchases discounts = {(Purchases–Purchase returns and allowances) × Discount percentage}= ($5,300–$300)×1%= $50

Working Note 4:

Compute amount of cash paid (Refer to Working Note 3 for purchase discount value)

College Accounting, Chapters 1-27 ...

Solutions

College Accounting, Chapters 1-27 ...

Explanation of Solution

Still sussing out bartleby?

The Solution to Your Study Problems

Chapter 11 Solutions

Additional Business Textbook Solutions