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Purchases and cash payments journals; accounts payable subsidiary and general ledgers AquaFresh Water Testing Service was established on April 16, 2016. 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: April 16. Issued Check No. 1 in payment of rent for the remainder of April, $3,500. 16. Purchased field supplies on account from Hydro Supply Co., $5,340. 16. Purchased field equipment on account from Pure Equipment Co., $21,450. 17. Purchased office supplies on account from Best Office Supply Co., $510. 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. 23. Purchased office supplies on account from Best Office Supply Co., $660. 23. Issued Check No. 3 to purchase land, $140,000. 24. Issued Check No. 4 to Hydro Supply Co. in payment of April 16 invoice, $5,340. 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. 30. Acquired land in exchange for field equipment having a cost of $12,000. 30. Purchased field supplies on account from Hydro Supply Co., $7,650. 30. Issued Check No. 6 to Best Office Supply Co. in payment of April 17 invoice, $510. 30. Purchased the following from Pure Equipment Co. on account: field supplies, $1,340, and field equipment, $4,700. 30. Issued Check No. 7 in payment of salaries, $29,400. Post the journals to the accounts pay able subsidiary ledger. Instructions 1. Journalize the transactions for April. Use a purchases journal and a cash payments journal, similar to those illustrated in this chapter, 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: 11 Cash 19 Land 14 Field Supplies 21 Accounts Payable 15 Office Supplies 61 Salary Expense 17 Field Equipment 71 Rent Expense At the points indicated in the narrative of transactions, post to the following accounts in the accounts payable subsidiary ledger: Best Office Supply Co. Hydro Supply Co. Pure Equipment Co. 2. Post the individual entries (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. 3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger. (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. Why might AquaFresh consider using a subsidiary ledger for the field equipment?

BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615
BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615

Solutions

Chapter
Section
Chapter 5, Problem 5.4APR
Textbook Problem

Purchases and cash payments journals; accounts payable subsidiary and general ledgers

AquaFresh Water Testing Service was established on April 16, 2016. 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:

April 16. Issued Check No. 1 in payment of rent for the remainder of April, $3,500.

16. Purchased field supplies on account from Hydro Supply Co., $5,340.

16. Purchased field equipment on account from Pure Equipment Co., $21,450.

17. Purchased office supplies on account from Best Office Supply Co., $510.

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.

23. Purchased office supplies on account from Best Office Supply Co., $660.

23. Issued Check No. 3 to purchase land, $140,000.

24. Issued Check No. 4 to Hydro Supply Co. in payment of April 16 invoice, $5,340.

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.

30. Acquired land in exchange for field equipment having a cost of $12,000.

30. Purchased field supplies on account from Hydro Supply Co., $7,650.

30. Issued Check No. 6 to Best Office Supply Co. in payment of April 17 invoice, $510.

30. Purchased the following from Pure Equipment Co. on account: field supplies, $1,340, and field equipment, $4,700.

30. Issued Check No. 7 in payment of salaries, $29,400.

Post the journals to the accounts pay able subsidiary ledger.

Instructions

1. Journalize the transactions for April. Use a purchases journal and a cash payments journal, similar to those illustrated in this chapter, 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:

11 Cash 19 Land
14 Field Supplies 21 Accounts Payable
15 Office Supplies 61 Salary Expense
17 Field Equipment 71 Rent Expense

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

Best Office Supply Co.

Hydro Supply Co.

Pure Equipment Co.

2. Post the individual entries (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.

3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger. (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. Why might AquaFresh consider using a subsidiary ledger for the field equipment?

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Chapter 5 Solutions

Accounting (Text Only)
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Ch. 5 - Revenue journal The following revenue transactions...Ch. 5 - Revenue journal The following revenue transactions...Ch. 5 - Accounts receivable subsidiary ledger The debits...Ch. 5 - Accounts receivable subsidiary ledger The debits...Ch. 5 - Purchases journal The following purchase...Ch. 5 - Purchases journal The following purchase...Ch. 5 - Accounts payable subsidiary ledger The debits and...Ch. 5 - Accounts payable subsidiary ledger The debits and...Ch. 5 - Segment analysis McHale Company does business in...Ch. 5 - Segment analysis Back Country Life, Inc., does...Ch. 5 - Identify postings from revenue journal Using the...Ch. 5 - Accounts receivable ledger Based on the data...Ch. 5 - Identify journals Assuming the use of a two-column...Ch. 5 - Identify journals Assuming the use of a two-column...Ch. 5 - Identify transactions in accounts receivable...Ch. 5 - Prepare journal entries in a revenue journal...Ch. 5 - Posting a revenue journal The revenue journal for...Ch. 5 - Accounts receivable subsidiary ledger The revenue...Ch. 5 - Revenue and cash receipts journals Transactions...Ch. 5 - Revenue and cash receipts journals Lasting Summer...Ch. 5 - Identify postings from purchases journal Using the...Ch. 5 - Identify postings from cash payments journal Using...Ch. 5 - Identify transactions in accounts payable...Ch. 5 - Prepare journal entries in a purchases journal...Ch. 5 - Posting a purchases journal The purchases journal...Ch. 5 - Accounts payable subsidiary ledger The cash...Ch. 5 - Purchases and cash payments journals Transactions...Ch. 5 - Purchases and cash payments journals Happy Tails...Ch. 5 - Error in accounts payable subsidiary ledger After...Ch. 5 - Identify postings from special journals Pinnacle...Ch. 5 - Cash receipts journal The following cash receipts...Ch. 5 - Computerized accounting systems Most computerized...Ch. 5 - Computerized accounting systems and e-commerce...Ch. 5 - E-commerce For each of the following companies,...Ch. 5 - Segment revenue horizontal analysis Starbucks...Ch. 5 - Segment revenue vertical analysis News Corporation...Ch. 5 - Segment revenue horizontal and vertical analyses...Ch. 5 - Revenue journal; accounts receivable subsidiary...Ch. 5 - Revenue and cash receipts journals; accounts...Ch. 5 - Purchases, accounts payable subsidiary account,...Ch. 5 - Purchases and cash payments journals; accounts...Ch. 5 - All journals and general ledger; trial balance The...Ch. 5 - Problems: Series B Revenue journal; accounts...Ch. 5 - Revenue and cash receipts journals; accounts...Ch. 5 - Purchases, accounts payable account, and accounts...Ch. 5 - Purchases and cash payments journals; accounts...Ch. 5 - All journals and general ledger; trial balance The...Ch. 5 - Ethics in Action Netbooks Inc. provides accounting...Ch. 5 - Manual vs. computerized accounting systems The...Ch. 5 - Accounts receivable and accounts payable A...Ch. 5 - Design of accounting systems For the past few...Ch. 5 - Communication Internet-based accounting software...

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