Concept explainers
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. 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. 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. Record the transactions in the purchases journal. If using Working Papers, begin on page 81.
- 4. Post to the accounts payable ledger daily. Skip this step if using CLGL.
- 5. Post to the general ledger at the end of the month. Skip this step if using CLGL.
- 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.
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- Mays Beauty Store records sales and purchase transactions in the general journal. In addition to a general ledger, Mays Beauty Store also uses an accounts receivable ledger and an accounts payable ledger. Transactions for January related to the sales and purchase of merchandise are as follows: Jan. 2Bought nine Matte Nail Color Kits from Mejia, Inc., 450, invoice no. 4521, dated January 1; terms 2/10, n/30; FOB shipping point, freight prepaid and added to the invoice, 87.50 (total 537.50). 5Bought 30 Perfume Cocktail Rings from Braun, Inc., 1,200, invoice no. 37A, dated January 3; terms 2/10, n/30; FOB destination. 8Sold two Matte Nail Color Kits on account to J. Herbert, sales slip no. 113, 110, plus sales tax of 8.80, total 118.80. 11Received credit memo no. 455 from Braun, Inc., for merchandise returned, 315.25. 18Bought 15 Eye Palettes from Vargas, Inc., 660, invoice no. 910, dated January 14; terms net 30; FOB destination. 23Sold four Eye Palettes on account to T. 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Write Balance in the Item column and place a check mark in the Post. Ref. column. Skip this step if using CengageNow. 4. Record the transactions in the general journal. If using Working Papers, begin on page 17. 5. Post the entries to the general ledger and accounts receivable ledger or accounts payable ledger as appropriate. 6. Prepare a schedule of accounts receivable. 7. Prepare a schedule of accounts payable. 8. Compare the totals of the schedules with the balances of the controlling accounts.arrow_forwardShirleys Beauty Store records sales and purchase transactions in the general journal. In addition to a general ledger, Shirleys Beauty Store also uses an accounts receivable ledger and an accounts payable ledger. 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