Williams Company Began Business on May 1 AUse the Purchases Journal and the Cash Disbursements Journal to Inventory

question 22

Essay

Williams Company began business on May 1.They use the perpetual inventory method.The following transactions involving purchases and cash disbursements occurred during the first week of May:
$$\begin{array} { | l | l | l | } \hline \text { May } & 2 & \begin{array} { l } \text { Purchased } \$ 25,000 \text { of merchandise inventory on credit from the Sioux City }\\\text { Company, terms } 2 / 10, \mathrm{n} / 30 \text {. Invoice dated May } 1 \text {. }\end{array} \\\hline \text { May } & 3 & \begin{array} { l } \text { Purchased } \$ 12,000 \text { of merchandise inventory on credit from the Wichita Company, } \\\text { terms } 2 / 10,\text{n} / 30 \text {. Invoice dated May } 2 \text {. }\end{array} \\\hline \text { May } & 3 &\text { Purchased } \$ 3,000 \text { of office supplies for cash from Bettendorf Co. Check no. } 1267 .\\\hline \text { May } & 4 & \begin{array} { l } \text { Purchased } \$ 36,000 \text { of office equipment on credit from Office Outfitters, terms n }/ 60 \text {. } \\\text { Invoice dated May } 3 .\end{array} \\\hline \text { May } & 6 & \begin{array} { l } \text { Paid the arnount due for the merchandise purchased from Sioux City Cormpary. } \\\text { Check no. } 1268 .\end{array} \\\hline \text { May } & 6 & \begin{array} { l } \text { Purchased } \$ 14,500 \text { of merchandise inventory for cash from the Davenport Co. } \\\text { Check no. } 1269 .\end{array} \\\hline\end{array}$$
a.Use the purchases journal and the cash disbursements journal to record these transactions
b.Prepare a schedule of accounts payable as of May 7.There were no accounts payable on May 1.
$$\begin{array}{l}\text { Purchases Journal }\\\begin{array} { | l | l | l | l | l | l | l | l | l | } \hline \text { Date } & \text { Account } & \begin{array} { l } \text { Date of } \\\text { Invoice }\end{array} & \text { Terms } & \text { PR } & \begin{array} { l } \text { Accounts } \\\text { Payable } \\\text { Cr. }\end{array} & \begin{array} { l } \text { Inventory } \\\text { Dr. }\end{array} & \begin{array} { l } \text { Office } \\\text { Supplies } \\\text { Dr. }\end{array} & \begin{array} { l } \text { Other } \\\text { Accounts } \\\text { Dr }\end{array} \\\hline & & & & & & & & \\\hline & & & & & & & & \\\hline & & & & & & & & \\\hline & & & & & & & & \\\hline & & & & & & & & \\\hline\end{array}\end{array}$$
$$\begin{array}{l}\text { Cash Disbursements Jaurnal }\\\begin{array} { | l | l | l | l | l | l | l | l | l | } \hline \text { Date } & \begin{array} { l } \text { Ck. } \\\text { No. }\end{array} & \text { Payee } & \begin{array} { l } \text { Account } \\\text { Debited }\end{array} & \text { PR } & \begin{array} { l } \text { Cash } \\\text { Cr. }\end{array} & \begin{array} { l } \text { Inventory } \\\text { Cr. }\end{array} & \begin{array} { l } \text { Other } \\\text { Accounts } \\\text { Dr. }\end{array} & \begin{array} { l } \text { Accounts } \\\text { Payable } \\\text { Dr. }\end{array} \\\hline & & & & & & & & \\\hline & & & & & & & & \\\hline & & & & & & & & \\\hline & & & & & & & & \\\hline\end{array}\end{array}$$

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Definitions:

UCC

The Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States.

Prohibits Assignments

A clause within contracts that restricts or forbids the transfer of rights, responsibilities, or interests from one party to another without prior approval.

Partial Assignment

The transfer of a portion of one’s interest in a contract, deed, or benefit to another party.

Assignment of Rights

The transfer of rights held by one party to another party.