The Following Are Selected Transactions Related to Purchases on Account

question 123

Essay

The following are selected transactions related to purchases on account and cash payments completed during April of the current year.Apr.

1 Issued Check No. 60 in payment of rent for month, $2,400.

5 Purchased office supplies from Clauson Co., $850.

9Issued Check No. 61 to Dame Co. for $9,750 for cash purchase of equipment.

10Purchased store supplies from Ewing Co., $425.

15Issued Check No. 62 to Clauson Co. in payment of April 5 invoice.

17Purchased store supplies from Patton Co., $7,500.

20Issued Check No. 63 to Ewing Co. in payment of April 10 invoice of $425.

25Purchased equipment from Sloan Co., $7,750.

27Issued Check No. 64 to Patton Co. for partial payment of the April 17 invoice, $4,000.

30Purchased office supplies from Winthrop Co., $400.?

(a)Record the transactions in the purchases and cash payments journals.
(b)Total and rule the purchases and cash payments journals as of April 30.
(c)Indicate the method of posting the individual items and the totals of the purchases and cash payments journals in the following manner:
(1)For individual items and totals to be posted to the subsidiary ledger or not to be posted, insert a check mark in the Post. Ref. column or below the totals.
(2)For individual items and totals to be posted to the general ledger, insert the letter "G"
(as a substitute for specific account numbers) in the Post. Ref. column or below the totals.? $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad CASH ~PAYMENTS~ JOURNAL\quad\quad Page~ 11\\\begin{array}{c} \hline&&&&\text { Other }&\text { Accounts } \\& \text { Ck. } & \text { Account } & \text { Post. }&\text { Accounts }&\text { Payable } & \text { Cash } \\\underline {\text { Date }} & \underline {\text { No. }} & \underline {\text { Debited }} & \underline {\text { Ref. }} & \underline {\text { Dr. }} & \underline {\text { Dr. }} & \underline {\text { Cr. }} \\\end{array}$


$\quad\quad\quad\quad\quad PURCHASES ~JOURNAL\quad\quad\quad\quad\quad Page 22\\\begin{array} { l c c c c } \hline& \text { Account } & \text { Post. } & \begin{array} { c } \text { Accounts } \\ \text { Payable } \end{array} & \begin{array} { c } \text { Store } \\ \text { Dupplies } \end{array} \\ \underline {\text { Date }} & \underline { \text { Credited } } & \underline { \text { Ref. } } & \underline {\text { Cr. } }& \underline { \text { Dr. } } \end{array}$




$\begin{array}{lcll}\hline\\\text { Office } & \text { Other } & & \\\text { Supplies } & \text { Accounts } & \text { Post. } & \\\underline {\text { Dr. }} & \underline {\text { Dr.} } & \underline {\text { Ref. }} & \underline {\text { Amount }} \\\end{array}$

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Definitions:

Cost of Goods Sold

The financial charges directly linked to the fabrication of products sold by a company, involving both materials and labor input.

Net Income

The profit a company retains after all expenses and taxes have been removed from its revenue.

Inventory

A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold.

Perpetual Inventory Method

An inventory management system where updates are made continuously to record sales and purchases instantly, maintaining constant and accurate inventory records.