Question

Purchases and Cash Payments Journals; Accounts Payable Subsidiary and General Ledgers

AquaFresh Water Testing Service was established on April 16. AquaFresh uses field equipment and field supplies (chemicals and other supplies) to analyze water for unsafe contaminants in streams, lakes, and ponds. Transactions related to purchases and cash payments during the remainder of April are as follows:

April 16.		Issued Check No. 1 in payment of rent for the remainder of April, $3,500.
April 16.		Purchased field supplies on account from Hydro Supply Co., $5,340.
April 16.		Purchased field equipment on account from Pure Equipment Co., $21,450.
April 17.		Purchased office supplies on account from Best Office Supply Co., $510.
April 19.		Issued Check No. 2 in payment of field supplies, $3,340, and office supplies, $400.
		Post the journals to the accounts payable subsidiary ledger.
April 23.		Purchased office supplies on account from Best Office Supply Co., $660.
April 23.		Issued Check No. 3 to purchase land, $140,000.
April 24.		Issued Check No. 4 to Hydro Supply Co. in payment of April 16 invoice, $5,340.
April 26.		Issued Check No. 5 to Pure Equipment Co. in payment of April 16 invoice, $21,450.
		Post the journals to the accounts payable subsidiary ledger.
April 30.		Acquired land in exchange for field equipment having a cost of $12,000.
April 30.		Purchased field supplies on account from Hydro Supply Co., $7,650.
April 30.		Issued Check No. 6 to Best Office Supply Co. in payment of April 17 invoice, $510.
April 30.		Purchased the following from Pure Equipment Co. on account: field supplies, $1,340, and field equipment, $4,700.
April 30.		Issued Check No. 7 in payment of salaries, $29,400.
		Post the journals to the accounts payable subsidiary ledger.

Required:

1. Journalize the transactions (in chronological order as presented in the data) for April. Use a purchases journal and a cash payments journal, and a two-column general journal. Use debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:

11	Cash	19	Land
14	Field Supplies	21	Accounts Payable
15	Office Supplies	61	Salary Expense
17	Field Equipment	71	Rent Expense

At the points indicated in the narrative of transactions, post to the following accounts in chronological order in the accounts payable subsidiary ledger:

Best Office Supply Co.

Hydro Supply Co.

Pure Equipment Co.

For those boxes in which no entry is required, leave the box blank. If no other account is needed in the "Other Accounts Dr." column select "No Entry Required".

PURCHASES JOURNAL								PAGE 1
Date	Account Credited	Post. Ref.	Accounts Payable Cr.	Field Supplies Dr.	Office Supplies Dr.	Other Accounts Dr.	Post. Ref.	Amount
		✔
		✔
		✔
		✔
		✔
		✔

CASH PAYMENTS JOURNAL						PAGE 1
Date	Ck. No.	Account Debited	Post. Ref.	Other Accounts Dr.	Accounts Payable Dr.	Cash Cr.
			✔
			✔
			✔
		Total

JOURNAL				PAGE 1
Date	Description	Post. Ref.	Debit	Credit

2. Post the individual entries in chronological order (Other Accounts columns of the purchases journal and the cash payments journal and both columns of the general journal) to the appropriate general ledger accounts. Post to the subsidiary ledger in chronological order. When posting to the general ledger, post in chronological order. However, if there is more than one entry on the same date, post transactions from the purchases journal first, then the cash payments journal before posting from the general journal.

3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger.

For those boxes in which no entry is required, leave the box blank.

ACCOUNTS PAYABLE SUBSIDIARY LEDGER
Date	Item	Post. Ref.	Debit	Credit	Balance
Account: Best Office Supply Co.
Account: Hydro Supply Co.
Account: Pure Equipment Co.

Post transactions in chronological order. However, if there is more that one transaction on the same date, post from the purchases journal first, then from the cash payments journal before posting from the general journal. (Because the problem does not include transactions related to cash receipts, the cash account in the ledger will have a credit balance.)

GENERAL LEDGER
					Balance
Date	Item	Post. Ref.	Debit	Credit	Dr.	Cr.
Account: Cash #11
Account: Field Supplies #14
Account: Office Supplies #15
Account: Field Equipment #17
Account: Land #19
Account: Accounts Payable #21
Account: Salary Expense #61
Account: Rent Expense #71

4. Prepare a schedule of the accounts payable creditor balances.

AQUAFRESH WATER TESTING SERVICE Accounts Payable Creditor Balances April 30
Best Office Supply Co.	$
Hydro Supply Co.
Pure Equipment Co.
Total accounts payable	$

5. All are reasons why AquaFresh might consider using a subsidiary ledger for the field equipment EXCEPT:

To track each piece of equipment individually To safeguard the equipment To secure lower pricing on equipment purchases To track depreciation on the equipment

Answer 1

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View * Cut Copy ♡ General 1 - Wrap Text Merge & Center 1 - 3 LE Paste Format Painter Clipboard Autosum * Calibri - 11 - AA BI U DA Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Find & Filter Select Editing Font Alignment Number Cells C D | Ε F G H I J K L M Post Ref Other Accounts(DR) Post Ref Ampunt Field Equipment $ 21,450.00 Purchase Journal Accounts Payable(CR) Field Supplies(DR) Office Supplies(DR) 5,340.00 $ 5,340.00 21,450.00 510.00 510.00 660.00 $ 660.00 7,650.00 $ 7,650.00 6,040.00 $ 1,340.00 $ 41,650.00 $ 14,330.00 $ 1,170.00 Field Equipment $ 4,700.00 $ 26,150.00 122 for A B 1 1,283) 2 3 Date Account Credited 4 16-Apr Hydro Supply Co. 16-Apr Pure Aqua Equipment 17-Apr Best Office Supply Co. 23-Apr Best Office Supply Co. 30-Apr Hydro Supply Co. 30-Apr Pure Aqua Equipment 30-Apr 11 12 13 Date Account Debited 14 16-Apr Rent Expense 19-Apr Field Supplies 19-Apr Office Supplies 23-Apr Land 24-Apr Hydro Supply Co. 26-Apr Pure Aqua Equipment Co. 30-Apr Best Office Supply Co. 30-Apr Salaries Expense 22 30-Apr Total 23 Check No. Cash Payment Journal Post Ref. Other Accounts(DR) Accounts Payable(DR)Cash(CR) 3,500.00 3,500.00 3,340.00 3,340.00 400.00 400.00 1,40,000.00 1,40,000.00 5,340.00 $ 5,340.00 21,450.00 $ 21,450.00 510.00 $ 510.00 29,400.00 29,400.00 $ 1,76,640.00 $ 27,300.00 $ 2,03,940.00 $ 24 Journal Sheet1 Sheet2 Sheet3 Select destination and press ENTER or choose Paste + OU 100% 0 AN ENG 21-02-2020 W 18:05 0

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View * Cut Copy ♡ General 1 - Wrap Text Merge & Center 1 - 3 LE Paste Format Painter Clipboard Autosum * Calibri - 11 - AA BI U DA Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Find & Filter Select Editing Font Alignment Number Cells 122 А в G H I J K L M A Journal Debit $ 12,000.00 Credit General Journal Land To Field Equipment (Aquired land in exchange of field Equipment) $ 12,000.00 Date Item Debit Credit Accounts Payable subsidiary Ledgers Best Service Supply co. Ref No. Debit Credit P1 $ CP1 CP1 510.00 17-Apr 23-Apr 30-Apr 510.00 660.00 34 35 $ $ 510.00 1,170.00 660.00 www. Balance Debit Credit 38 Date Item 16-Apr Balance 24-Apr 30-Apr Hydro Supply Co. Ref No. Debit P1 CP1 $ P1 Credit $ 5,340.00 5,340.00 5,340.00 7,650.00 $ 7,650.00 43 44 Date 45 Pure Aqua Equipment Co. Ref No. Debit P1 Balance Debit Item 16-Apr Balance Sheet1 Sheet2 Credit $ 21,450.00 Credit $ 21,450.00 Sheet30 Ready OU 100% 0 + 18:05 ^ ENG 21-02-2020 0 W

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View * Cut Copy ♡ General 1 - Wrap Text Merge & Center 1 - 3 LE Paste Format Painter Clipboard Autosum * Calibri - 11 - AA BI U DA insert Delete format Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format a clear 2 Clear Sort & Find & Filter Select Editing Font Alignment Number Cells fic 122 А в G H I J K L M 42 43 Pure Aqua Equipment Co. Ref No. Debit Balance Debit Credit $ P1 21,450.00 21,450.00 44 Date Item 16-Apr Balance 46 26-Apr 30-Apr CP1 $ 21,450.00 Credit $ $ $ P1 $ 6,040.00 6,040.00 49 Cash A/C Account No.-11 Balance Debit $ 2,03,940.00 Item Credit Credit 51 Date 30-Apr 52 Ref No. CP1 Debit $ 2,03,940.00 53 Field Supplies Account No.-14 Balance Debit Item Credit Credit Date 19-Apr 30-Apr Ref No. CP1 Debit $ $ 3,340.00 7,650.00 3,340.00 P1 $ 10,990.00 Office Supplies Debit Credit Ref No. CP1 Credit Account No.-15 Balance Debit 400.00 1,060.00 62 Date Item 63 19-Apr 64 23-Apr HE Sheet1 Sheet2 Ready P1 400.00 660.00 Sheet3 + BOU 100% u gl ^ ENG 0 18:05 21-02-2020 O

Book1 - Microsoft Excel - X Home Insert Page Layout Formulas Data Review View * Cut Copy ♡ General 1 - Wrap Text Merge & Center 1 - 3 LE Paste Format Painter Clipboard Autosum * Calibri - 11 - AA BI U DA Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format 2 Clear Sort & Find & Filter Select Editing Font Alignment Number Cells fic G H I J K L M Office Supplies 122 А 60 61 62 Date 19-Apr 23-Apr Item Credit Credit Account No.-15 Balance Debit $ 400.00 $ 1,060.00 Ref No. CP1 P1 63 Debit $ $ 400.00 660.00 Field Equipment Date Item Ref No. Debit Credit Credit Account No.-17 Balance Debit $ 21,450.00 26,150.00 $ 14,150.00 69 p1 21,450.00 16-Apr 30-Apr 30-Apr 4,700.00 $ J1 $ 12,000.00 Land Item Credit Date 23-Apr 30-Apr Credit Ref No. CP1 Account No.-19 Balance Debit $ 1,40,000.00 $ 1,52,000.00 Debit $ $ 1,40,000.00 12,000.00 Accounts Payable Account No.-21 Balance Debit 41,650.00 $ 41,650.00 Debit 80 81 Date Item 23-Apr Sheet1 Sheet2 Ready Credit 82 Ref No. P1 Credit $ Sheet3 0 BOU 100% 0 + ANDENG 21-02-2020 W 18:05 ♡

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