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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

West Bicycle Shop uses a three-column purchases journal. The company is located in Topeka, Kansas. In addition to a general ledger, the company also uses an accounts payable ledger. Transactions for January related to the purchase of merchandise are as follows:

Jan. 4 Bought fifty 10-speed bicycles from Nielsen Company, $4,775, invoice no. 26145, dated January 3; terms net 60 days; FOB Topeka.

7 Bought tires from Barton Tire Company, $792, invoice no. 9763, dated January 5; terms 2/10, n/30; FOB Topeka.

8 Bought bicycle lights and reflectors from Gross Products Company, $384, invoice no. 17317, dated January 6; terms net 30 days; FOB Topeka.

11 Bought hand brakes from Bray, Inc., $470, invoice no. 291GE, dated January 9; terms 1/10, n/30; FOB Kansas City, freight prepaid and added to the invoice, $36 (total $506).

19 Bought handle grips from Gross Products Company, $96.50, invoice no. 17520, dated January 17; terms net 30 days; FOB Topeka.

24 Bought thirty 5-speed bicycles from Nielsen Company, $1,487, invoice no. 26942, dated January 23; terms net 60 days; FOB Topeka.

29 Bought knapsacks from Davila Manufacturing Company, $304.80, invoice no. 762AC, dated January 26; terms 2/10, n/30; FOB Topeka.

31 Bought locks from Lamb Safety Net, $415.47, invoice no. 27712, dated January 26; terms 2/10, n/30; FOB Dodge City, freight prepaid and added to the invoice, $22 (total $437.47).

Required

  1. 1. If using Working Papers, open the following accounts in the accounts payable ledger and record the January 1 balances, if any, as given: Barton Tire Company, $156; Bray, Inc.; Davila Manufacturing Company, $82.88; Gross Products Company; Lamb Safety Net, $184.20; Nielsen Company. For the accounts having balances, write Balance in the Item column and place a check mark in the Post. Ref. column. Skip this step if using CengageNow or CLGL.
  2. 2. If using Working Papers, record the balance of $423.08 in the Accounts Payable 212 controlling account as of January 1. Write Balance in the Item column and place a check mark in the Post. Ref. column. Skip this step if using CengageNow or CLGL.
  3. 3. Record the transactions in the purchases journal. If using Working Papers, begin on page 81.
  4. 4. Post to the accounts payable ledger daily. Skip this step if using CLGL.
  5. 5. Post to the general ledger at the end of the month. Skip this step if using CLGL.
  6. 6. Prepare a schedule of accounts payable, and compare the balance of the Accounts Payable controlling account with the total of the schedule of accounts payable.

1.

To determine

Post the opening balance in Accounts payable ledger and record the January 01 balances.

Explanation

Accounts payables: Accounts payables are short-term legal agreements which are required to be paid within one year. So, they are classified as current liabilities on balance sheet.

Post the opening balance in Accounts payable ledger and record the January 01 balances:

Accounts payable ledger
Name : Company BT
DateItemPost Ref.DebitCreditBalance
January1Balance  $156.00

Table (1)

Accounts payable ledger
Name : Incorporation B
DateItemPost Ref.DebitCreditBalance
       

Table (2)

Accounts payable ledger
Name : Company DM
DateItemPost Ref.DebitCreditBalance
January1Balance  $82.88

Table (3)

Accounts payable ledger
Name : Company GP
DateItemPost Ref...

2.

To determine

Post the opening balance in Accounts payable 212 controlling account as of January 01.

3.

To determine

Record the transactions in purchases journal.

4.

To determine

Post the transactions to accounts payable ledger.

5.

To determine

Post the amounts from general journal at the end of the month.

6.

To determine

Prepare a schedule of Accounts payable.

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