Question

Purchases Invoices-Enter the information in the Purchases Journal on the date the invoice is received for each purchase of merchandise inventory or supplies. Post to the Subsidiary Accounts Payable Ledger. Mr. Stephens will send you an interoffice memorandum when he wants you to prepare checks for payment of these invoices.

is this being purchased for Zappo from cog hill?

would this be a debit which would make the balance decrease?

is this entered correctly?

Answer 1

1. Invoice number: The sales invoice is always prepared by the seller hence here the Seller is ZAPPO CORPORATION and purchaser is or the goods are sold to COGG HILL CAMPING COMPANY.
2. Since it is not mentioned that Purchase has been made by Cash, it would be considered to be a Credit Purchase.

In the books of ZAPPO CORPORATION (Seller), where goods purchased on credit from Zappo Corporation, the journal entry will be,

Purchase A/C Dr 2539.10

To Cogg Hill Camping Company 2539.10

(beings goods purchased on credit from Zappo Corporation)

Once Cash is received,

Cogg Hill Camping Company Dr 2539.10

To  Cash A/C 2539.10

In the books of COGG HILL CAMPING COMPANY(Purchaser/ Buyer) , where goods sold on credit to Cogg Hill Camping Company, the journal entry will be,

Zappo Corporation Dr 2539.10

To Sales A/C     2539.10

(being goods sold to Cogg Hill Camping Company on credit)Once Cash is paid,

Cash A/C Dr 2539.10

To Zappo Corporation 2539.10

(being cash paid to Zappo corporation)

Date	Explanation	Debit	Credit	Balance
Jun-01	Beginning balance			2000
Jun-02	Purchase A/C	2539.1
Jun-02	Zappo Corporation		2539.1

In books of Zappo Corporation
Date	Explanation	Debit	Credit	Balance
Jun-01	Beginning balance			2500
Jun-02	Cogg Hill Camping Company	2539.10
Jun-02	Sales A/C		2539.1

Purchase Book
Date	Particulars	Date of invoice	Inventory Dr	Other A/c Dr
Jun-02	Cogg Hill Camping Company
	Down Jackets		1732.2
	Rain ponchos		226.9
	Hiking Boots		578