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

question 113

Essay

Subsidiary ledgers
Listed below are several merchandising transactions of Siegel's Garden Center, a garden supply store.
(a) Purchased goods from Bayview Wholesale on account.
(b) Sold goods for cash.
(c) Sold goods 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. $$\begin{array} { | c | c | c | } \hline & \text { Subsidiary } & \text { Effect upon subsidiary } \\\hline \text { Transaction } & \text { Ledger(s) } & \text { Account Balance } \\\hline \text { A } & \text { Inv } & \text { Increase } \\& \text { AP } & \text { Decrease[Increase] } \\\hline \mathrm{B} & \\\hline \mathrm{C} & \\\hline \mathrm{D} & \\\hline \mathrm{E} & \\\hline\end{array}$$

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Definitions:

Job-Order Costing

An accounting method that assigns costs to specific production batches or jobs, used in situations where goods or services are distinctive.

Selling Price

The amount of money for which a product or service is offered to the market.

Unit Product Costs

The calculation of the total cost (including materials, labor, and overhead) to produce a single unit of a product.

Job M598

A specific task or project identified by code M598 within a job costing system, where costs are tracked individually.