Question

Problem 8.1A Recording purchases and cash payments. LO 8-1, 8-3

Annette’s Photo Shop is a retail store that sells cameras and photography supplies. Annette’s Photo Shop began operations April 1, 2019 and uses the periodic system. The firm purchases its merchandise for cash and on open account. During April, Annette’s Photo Shop engaged in the following transactions:

DATE			TRANSACTIONS
2019
April	1		Purchased camera film on credit from Camera & Film Products, Invoice 825, $1,055, terms n/30; freight of $29 prepaid by Camera & Film Products and added to the invoice (total amount due, $1,084).
	3		Purchased lenses on credit for $770 from Vision Supplies, Inc., Invoice 998, terms n/30.
	11		Purchased DVD camcorders on credit for $3,900 from Optical Products, Invoice 4101, terms n/30.
	15		Recorded various purchases of merchandise for cash from April 1 to April 15, $1,700.
	26		Purchased lighting equipment on credit from Myers Brothers Camera Supplies, Invoice 9288, $4,700, terms n/30; freight of $236 prepaid by Myers Brothers Camera Supplies and added to the invoice (total amount due, $4,936).
	27		Issued Check 102 for $500 to Vision Supplies, Inc., in partial payment of Invoice 998 dated April 3.
	30		Recorded various purchases of merchandise for cash from April 16 to April 30, $2,170.
	30		Issued Check 103 to Camera & Film Products in payment of the total amount due on Invoice 825 dated April 1.

  

Required:

1. Record the transactions in a general journal.
2. Post the entries from the general journal to the appropriate general ledger accounts.

GENERAL LEDGER ACCOUNTS

101	Cash, $10,100 Dr.
205	Accounts Payable
501	Purchases
502	Freight In

Analyze:
What were the total cash payments on account during April?

Journal entry worksheet 2 3 4 5 6 7 8 Purchased camera film on credit from Camera & Film Products, Invoice 825, $1,055, terms n/30; freight of $29 prepaid by Camera & Film Products and added to the invoice (total amount due, $1,084). Note: Enter debits before credits. GENERAL JOURNAL Debit CREDIT DATE April 01, 2019 Record entry Clear entry View general journal

Answer 1

Date Apr. 1 Date Apr. 26 Accounts Debit Credit Purchases $1,055 Freight-in $29 Accounts Payable $1,084 (To record camera films purchased on credit with prepaid freight-in cost) Accounts Debit Credit Purchases $4,700 Freight-in $236 Accounts Payable $4,936 (To record lighting equipment purchased on credit with prepaid freight-in cost) Apr.3 $770 Apr. 27 Purchases Accounts Payable (To record lenses purchased on credit) $770 Accounts Payable $500 Cash $500 (To record partial payment on credit to Vision Supplies, Inc.) Apr. 11 Apr. 30 Purchases $3,900 Accounts Payable (To record DVD camcorders purchased on credit) $3,900 Purchases $2,170 Cash (To record various cash purchases April 16 to April 30) $2,170 Apr. 15 Apr. 30 [Ref: Apr. 1's entry] Purchases $1,700 Cash $1,700 (To record various cash purchases April 1 to April 15) Accounts Payable $1,084 Cash $1,084 (To record full payment on credit to Camera & Film Products)

2) Debit Cash Date Apr. 1 Apr. 15 Apr. 27 Apr. 30 Apr. 30 Account No: 101 Balance $10,000 $1,700 $8,300 $500 $7,800 $2,170 $5,630 $1,084 $4,546 Accounts Payable Date Debit Apr. 1 Apr. 3 Apr. 11 Apr. 26 Apr. 27 $500 Apr. 30 $1,084 Account No: 205 Credit Balance $1,084 $1,084 $770 $1,854 $3,900 $5,754 $4,936 $10,690 $10,190 $9,106 Purchases Date Apr. 1 Apr. 3 Apr. 11 Apr. 15 Apr. 26 Apr. 30 Apr. 30 Debit $29 $236 Debit $1,055 $770 $3,900 $1,700 $4,700 $2,170 Account No: 501 Credit Balance $1,055 $1,825 $5,725 $7,425 $12,125 $14,295 $14,295 $0 Freight-In Date Apr. 1 Apr. 26 Apr. 30 Account No: 502 Credit Balance $29 $265 $265 $0 NOTE: At the end, balances in purchases account & freight-in account will be transferred to cost of goods sold and so their balance will be zero.