Question

Wendy Ellis operates a wholesale computer center and has hired you as her bookkeeper to record

the following transactions. She would like you to:

a. journalize the following transactions,

b. record to the accounts payable subsidiary ledger and post to the general ledger as appropriate, and

c. prepare a schedule of accounts payable. If using working papers, be sure to put in the following

beginning balances: Andrews Co. $1,350; Hitch Co. $1,200; Seakate Co. $700; Zeke Co. $1,400;

Cash $17,000; Accounts Payable $4,650.

Oct. 201X Paid half the amount owed Hitch Co. from previous purchases of appliances on account, less a 5% purchases discount, check no. 21. 3 Bought a delivery truck for $6,500 cash, check no. 22, payable to Bob Singer Co. Bought computer merchandise from Lossy Co., check no. 23, $3,100. Bought additional computer merchandise from Proton Co., check no. 24, $650. 18 Paid Zeke Co. the amount owed, less a 5% purchases discount, check no. 25. 24 Paid rent expense to King's Realty Trust, check no. 26, $2,400. 28 Paid utilities expense to Gravel Utility Co., check no. 27, $280. 29 Paid half the amount owed Seakate Co., no discount, check no. 28. 30

Answer 1

a) Journal entries:
Date	Accounts Title	Debit $	Credit $
201X
1-Oct	Accounts Payable-Hitch Co.	600
	Purchase discount		30	(600*5%)
	Cash		570
	(half of Hitch Co. is being paid)
3-Oct	Delivery Truck	6500
	Cash		6500
	(delivery truck purchased)
6-Oct	Computer merchandise	3100
	Cash		3100
	(computer merchandise purchased)
18-Oct	Computer merchandise	650
	Cash		650
	(computer merchandise purchased)
24-Oct	Accounts Payable-Zeke Co.	1400
	Purchase discount		70	(1400*5%)
	Cash		1330
	(being Zeke Co. paid off)
28-Oct	Rent expense	2400
	Cash		2400
	(being rent paid)
29-Oct	Utility Expense	280
	Cash		280
	(being utilities expenses paid off)
30-Oct	Accounts Payable-Seakate Co.	700
	Cash		700
	(being Seakate Co. paid off)
b)
Accounts payable subsidiary ledger:
Andrews Co.
DEBIT	AMOUNT $	CREDIT	AMOUNT $
		OB	1350
Hitch Co.
Purchase discount	30	OB	1200
Cash	570
CB	600
Seakate Co.
Cash	700	OB	700
Zeke Co.
Purchase discount	70	OB	1400
Cash	1330
GENERAL LEDGER:
Accounts Payable A/c
Purchase discount	30	OB	4650
Cash Check 21	570
Purchase discount	70
Cash Check 25	1330
Cash Check 28	700
CB	1950
c. Schedule of Accounts Payable:
Date	Particulars	Andrews	Hitch	Seakate	Zeke	Total
	OB	1350	1200	700	1400	4650
1-Oct	Paid Check 21		-600			-600
24-Oct	Paid Check 25				-1400	-1400
30-Oct	Paid Check 28			-700		-700
	Balance	1350	600	0	0	1950