Subsidiary Ledgers Listed Below Are Several Merchandising Transactions of Siegel's

question 18

Essay

Subsidiary ledgers Listed below are several merchandising transactions of Siegel's Garden Center, a garden supply store.
(a) Purchased merchandise from Bayview Wholesale on account.
(b) Sold merchandise for cash.
(c) Sold merchandise on account to Dom's Landscaping Co.
(d) Paid the account payable to Bayview Wholesale.
(e) Collected the account receivable from Dom's Landscaping Co.
Among the accounting records maintained by Siegel's are subsidiary ledgers for inventory, accounts receivable, and accounts payable.
For each of the five transactions, you are to indicate any subsidiary ledger (or ledgers) to which the transaction would be posted. Use the code:
Inv = Inventory subsidiary ledger
AR = Accounts receivable subsidiary ledger
AP = Accounts payable subsidiary ledger
Also indicate whether each posting causes the balance in the subsidiary ledger account to increase or decrease. Organize your answer in tabular form as illustrated below. The answer for transaction a is provided as an example.
$\begin{array}{|c|c|c|}\hline & \text { Subsidiary } & \text { Effect upon subsidiary } \\\hline \text { Transaction } & \text { Ledger(s) } & \text { Account Balance } \\\hline \text { A } & \text { Inv } & \text { Increase } \\& \text { AP } & \text { Decrease[Increase] } \\\hline \text { B } & & \\\hline \text { C } & & \\\hline \text { D } & & \\\hline \text { E } & & \\\hline\end{array}$

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Definitions:

Equilibrium

A state in which the conflicting forces of demand and supply are in balance. When a market is in equilibrium, the decisions of consumers and producers are brought into harmony with one another, and the quantity demanded will equal the quantity supplied.

Revenue

Aggregate income a company secures from its sales of products or rendering of services in a given period.

Excise Tax

A tax imposed on specific goods, services, or activities to raise revenue or discourage their use.

Revenue

The total income generated by a business or organization from its normal business operations.