Concept explainers
(a)
Purchase journal
Purchase journal refers to the journal that is used to record all purchases on account. In the purchase journal, all purchase transactions are recorded only when the business purchased the goods on account. For example, the business purchased cleaning supplies on account.
Cash payments journal
Cash payments journal refers to the journal that is used to record the all transaction which is involve the cash payments. For example, the business paid cash to employees (salary paid to employees).
Accounts payable control account and subsidiary ledger
Accounts payable account and subsidiary ledger is the ledger which is used to
Subsidiary ledger
Subsidiary ledger refers to the ledger that provides the detailed information of the account already recorded in the general ledger such as accounts receivable subsidiary ledger and accounts payable subsidiary ledger.
To prepare: A single column revenue journal and a cash receipts journal of H Tails Incorporation.
(b)
To prepare: The accounts payable creditors balance, and verify that the total agrees with the ending balance of accounts payable control account.
(c)
To discuss: The uses of subsidiary ledger for accounts payable.
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- The revenue and cash receipts journals for Mirage Productions Inc. follow. The accounts receivable control account has a August 1, 2016, balance of 4,230 consisting of an amount due from Celestial Studios Inc. Prepare a listing of the accounts receivable customer balances and verify that the total agrees with the ending balance of the accounts receivable controlling account.arrow_forwardThe transactions completed by Revere Courier Company during December 2016, the first month of the fiscal year, were as follows: Instructions 1. Enter the following account balances in the general ledger as of December 1: 2. Journalize the transactions for December 2016, using the following journals similar to those illustrated in this chapter: cash receipts journal (p. 31), purchases journal (p. 37, with columns for Accounts Payable, Maintenance Supplies, Office Supplies, and Other Accounts), single-column revenue journal (p. 35), cash payments journal (p. 34), and two-column general journal (p. 1). Assume that the daily postings to the individual accounts in the accounts payable subsidiary ledger and the accounts receivable subsidiary ledger have been made. 3. Post the appropriate individual entries to the general ledger. 4. Total each of the columns of the special journals, and post the appropriate totals to the general ledger; insert the account balances. 5. Prepare a trial balance.arrow_forwardCASH PAYMENTS TR ANS ACTIONS Sam Santiago operates a retail variety store. The books include a general journal and an accounts payable ledger. Selected account balances on May 1 are as follows: The following are the transactions related to cash payments for the month of May: May 1Issued Check No. 426 in payment of May rent (Rent Expense), 2,400. 3Issued Check No. 427 to Muellers Distributors in payment of merchandise purchased on account, 3,600, less a 3% discount. Check was written for 3,492. 7Issued Check No. 428 to Van Kooning in partial payment of merchandise purchased on account, 5,500. A cash discount was not allowed. 12Issued Check No. 429 to Fantastic Toys for merchandise purchased on account, 5,200, less a 1% discount. Check was written for 5,148. 15Issued Check No. 430 to City Power and Light (Utilities Expense), 1,720. 18Issued Check No. 431 to A-1 Warehouse for a cash purchase of merchandise, 4,800. 26Issued Check No. 432 to Goya Outlet for merchandise purchased on account, 3,800, less a 2% discount. Check was written for 3,724. 30Issued Check No. 433 to Mercury Transit Company for freight charges on merchandise purchased (Freight-In), 1,200. 31Issued Check No. 434 to Town Merchants for a cash purchase of merchandise, 3,000. Required 1. Enter the transactions starting with page 9 of a general journal. 2. Post from the general journal to the general ledger and the accounts payable ledger. Use general ledger account numbers as shown in the chapter.arrow_forward
- CASH PAYMENTS TRANSACTIONS Kay Zembrowski operates a retail variety store. The books include a general journal and an accounts payable ledger. Selected account balances on May 1 are as follows: The following transactions are related to cash payments for the month of May: May 1Issued Check No. 326 in payment of May rent (Rent Expense), 2,600. 4Issued Check No. 327 to Cortez Distributors in payment of merchandise purchased on account, 4,200, less a 3% discount. Check was written for 4,074. 7Issued Check No. 328 to Indra Velga in partial payment of merchandise purchased on account, 6,200. A cash discount was not allowed. 11Issued Check No. 329 to Toy Corner for merchandise purchased on account, 4,600, less a 1% discount. Check was written for 4,554. 15Issued Check No. 330 to County Power and Light (Utilities Expense), 1,500. 19Issued Check No. 331 to Builders Warehouse for a cash purchase of merchandise, 3,500. 25Issued Check No. 332 to Troutman Outlet for merchandise purchased on account, 4,400, less a 2% discount. Check was written for 4,312. May 30Issued Check No. 333 to Rapid Transit Company for freight charges on merchandise purchased (Freight-In), 800. 31Issued Check No. 334 to City Merchants for a cash purchase of merchandise, 2,350. Required 1. Enter the transactions starting with page 9 of a general journal. 2. Post from the general journal to the general ledger and the accounts payable ledger. Use general ledger account numbers as shown in the chapter.arrow_forwardTransactions related to revenue and cash receipts completed by Albany Architects Co. during the period November 230, 2016, are as follows: Instructions 1. Insert the following balances in the general ledger as of November 1: 2. Insert the following balances in the accounts receivable subsidiary ledger as of November 1: 3. Prepare a single-column revenue journal (p. 40) and a cash receipts journal (p. 36). Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. The Fees Earned column is used to record cash fees. Insert a check mark () in the Post. Ref. column when recording cash fees. 4. Using the two special journals and the two-column general journal (p. 1), journalize the transactions for November. Post to the accounts receivable subsidiary ledger, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customers account before recording a cash receipt. 5. Total each of the columns of the special journals, and post the individual entries and totals to the general ledger. Insert account balances after the last posting. 6. Determine that the sum of the customer balances agrees with the accounts receivable controlling account in the general ledger. 7. Why would an automated system omit postings to a controlling account as performed in step 5 for Accounts Receivable?arrow_forwardPURCHASES JOURNAL, CASH PAYMENTS JOURNAL, AND GENERAL JOURNAL Debbie Mueller owns a small retail business called Debbies Doll House. The cash account has a balance of 20,000 on July 1. The following transactions occurred during July: REQUIRED 1. Record the transactions in the purchases journal, cash payments journal, and general journal. Total and rule the purchases and cash payments journals. Prove the cash payments journal. 2. Post from the journals to the general ledger and accounts payable ledger accounts. Use general ledger account numbers as shown in the chapter.arrow_forward
- Happy Tails Inc. has a September 1, 20Y4, accounts payable balance of 620, which consists of 320 due Labradore Inc. and 300 due Meow Mart Inc. Transactions related to purchases and cash payments completed by Happy Tails Inc. during the month of September 20Y4 are as follows: a. Prepare a purchases journal and a cash payments journal to record these transactions. The forms of the journals are similar to those used in the text. Place a check mark () in the Post. Ref. column to indicate when the accounts payable subsidiary ledger should be posted. Happy Tails Inc. uses the following accounts: b. Prepare a listing of accounts payable creditor balances on September 30, 20Y4. Verify that the total of the accounts payable creditor balances equals the balance of the accounts payable controlling account on September 30, 20Y4. c. Why does Happy Tails Inc. use a subsidiary ledger for accounts payable?arrow_forwardTransactions related to revenue and cash receipts completed by Sterling Engineering Services during the period June 230, 2016, are as follows: Instructions 1. Insert the following balances in the general ledger as of June 1: 2. Insert the following balances in the accounts receivable subsidiary ledger as of June 1: 3. Prepare a single-column revenue journal (p. 40) and a cash receipts journal (p. 36). Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. The Fees Earned column is used to record cash fees. Insert a check mark () in the Post. Ref. column when recording cash fees. 4. Using the two special journals and the two-column general journal (p. 1), journalize the transactions for June. Post to the accounts receivable subsidiary ledger, and insert the balances at the points indicated in the narrative of transactions. Determine the balance in the customers account before recording a cash receipt. 5. Total each of the columns of the special journals, and post the individual entries and totals to the general ledger. Insert account balances after the last posting. 6. Determine that the sum of the customer accounts agrees with the accounts receivable controlling account in the general ledger. 7. Why would an automated system omit postings to a control account as performed in step 5 for Accounts Receivable?arrow_forwardTransactions related to revenue and cash receipts completed by Sycamore Inc. during the month of December 2016 are as follows: Prepare a single-column revenue journal and a cash receipts journal to record these transactions. Use the following column headings for the cash receipts journal: Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. Place a check mark () in the Post. Ref. column to indicate when the accounts receivable subsidiary ledger should be posted.arrow_forward
- Catherines Cookies has a beginning balance in the Accounts Payable control total account of $8,200. In the cash disbursements journal, the Accounts Payable column has total debits of $6,800 for November. The Accounts Payable credit column in the purchases journal reveals a total of $10,500 for the current month. Based on this information, what is the ending balance in the Accounts Payable account in the general ledger?arrow_forwardYour company paid rent of $1,000 for the month with check number 1245. Which journal would the company use to record this? A. sales journal B. purchases journal C. cash receipts journal D. cash disbursements journal E. general journalarrow_forwardCASH RECEIPTS TRANSACTIONS Color Florists, a retail business, had the following cash receipts during January 20--. The sales tax is 5%. REQUIRED 1. Record the transactions starting on page 20 of a general journal. 2. Post from the journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.arrow_forward
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