Question

1. Derek Dempsey owns a retail furniture store. The books include a cash payments journal and an accounts payable ledger. All cash payments (except petty cash) are entered in the cash payments journal.

   Selected account balances as of July 1 are as follows:

   General Ledger			Accounts Payable Ledger
   Cash	$38,000		Middle Town Co.	$2,800
   Accounts Payable	18,000		Montauk Unlimited	1,800
   			Rolling Hills & Co.	10,200
   			Sunrise Inc.	3,200

   The following are transactions related to cash payments during the month of July:

   July 1		Issued Check No. 536 in payment of July rent (Rent Expense), $2,500.
   2		Issued Check No. 537 to Montauk Unlimited in payment of merchandise purchased on account $1,800, less a 2% cash discount. Check was written for $1,764.
   7		Issued Check No. 538 to Rolling Hills & Co. in partial payment for merchandise purchased on account, $4,200. A cash discount was not allowed.
   11		Issued Check No. 539 to Middle Town Co. for merchandise purchased on account $2,800, less a 1% discount. Check was written for $2,772.
   14		Issued Check No. 540 to City Power and Light (Utilities Expense), $1,230.
   18		Issued Check No. 541 to Oak Warehouse for a cash purchase of merchandise, $4,260.
   23		Issued Check No. 542 to Sunrise Inc. for merchandise purchased on account, $3,200, less a 3% cash discount. Check was written for $3,104.
   31		Issued Check No. 543 to Central Freight Lines for freight charges on merchandise purchased (Freight-In), $920.

   Required:

   1. Enter the transactions in a cash payments journal. Total, rule, and prove the cash payments journal. If an amount box does not require an entry, leave it blank.

   CASH PAYMENTS JOURNAL								Page 4
   Date	Check No.	Account Debited	Post. Ref.	General Debit	Accounts Payable Debit	Purchases Debit	Purchases Discounts Credit	Cash Credit
   July. 1	536	Rent Expense	521
   2	537	Montauk Unlimited	√
   7	538	Rolling Hills & Co.	√
   11	539	Middle Town Co.	√
   14	540	Utilities Expense	541
   18	541	Oak Warehouse	√
   23	542	Sunrise Inc.	√
   31	543	Freight-In	502
   				(√)	(202)	(501)	(501.2)	(101)

   2. Post from the cash payments journal to the general ledger and the accounts payable ledger. If an amount box does not require an entry, leave it blank. Enter transactions in chronological order.

   GENERAL LEDGER
   ACCOUNT	Cash				ACCOUNT NO.	101
   					BALANCE
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31	Balance	√
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNT	Accounts Payable				ACCOUNT NO.	202
   					BALANCE
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31	Balance	√
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNT	Purchases				ACCOUNT NO.	501
   					BALANCE
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNT	Purchases Discounts				ACCOUNT NO.	501.2
   					BALANCE
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNT	Freight-In				ACCOUNT NO.	502
   					BALANCE
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNT	Rent Expense				ACCOUNT NO.	521
   					BALANCE
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNT	Utilities Expense				ACCOUNT NO.	541
   					BALANCE
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	DEBIT	CREDIT
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNTS PAYABLE LEDGER
   ACCOUNT	Middle Town Co.
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	BALANCE
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31	Balance	√
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNT	Montauk Unlimited
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	BALANCE
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31	Balance	√
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNT	Rolling Hills & Co.
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	BALANCE
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31	Balance	√
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

   ACCOUNT	Sunrise Inc.
   DATE	ITEM	POST. REF.	DEBIT	CREDIT	BALANCE
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31	Balance	√
   July 1 July 2 July 7 July 11 July 14 July 18 July 23 July 31		CP4

Answer 1

ANSWER

	Cash Payment journal	Other accounts	Accounts payable	Purchase	Purchase discount	Cash
	Accounts debited	debit	Debit	Debit	Credit	Credit
Jul-01	Rent expense	2500				2500
Jul-02	Mauntak unlimited		1800		36	1764
Jul-07	Rolling hills and co.		4200			4200
Jul-11	Middle town co.		2800		28	2772
Jul-14	Utilities expense	1230				1230
Jul-18	Cash purchase			4260		4260
Jul-23	Sunsire inc.		3200		96	3104
Jul-31	Freight in			920		920
31	Totals	3730	12000	5180	160	20750

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