Question

P7-2B Dunder Mifflin Company's chart of accounts includes the following selected accounts. 157 Equipment 101 Cash 120 Inventory 201 Accounts Payable 130 Prepaid Insurance 306 Owner's Drawings On November 1, the accounts payable ledger of Dunder Mifflin Company showed the following balances: S. Carell $4,000, D. Schrute $2,100, R. Wilson $800, and W. Rainn $1,300. The November transactions involving the payment of cash were as follows Purchased merchandise, check no. 11, $950. 1 Nov. Purchased store equipment, check no. 12, $1,400. 3 5 Paid W. Rainn balance due of $1,300, less 1% discount, check no. 13, $1,287. Purchased merchandise, check no. 14, $1,700. 11 Paid R. Wilson balance due of $800, less 3% discount, check no. 15, $776. 15 M. Scott, the owner, withdrew $400 cash for own use, check no. 16. 16 Paid D. Schrute in full for invoice no. 1245, $2,100 less 2% discount, check no. 17, 19 $2,058 Paid premium due on one-year insurance policy, check no. 18, $2,400. 25 30 Paid S. Carell in full for invoice no. 832, $2,900, check no. 19. Instructions (a) Journalize the transactions above in a four-column cash payments journal with columns for Other Accounts Dr., Accounts Payable Dr., Inventory Cr., and Cash Cr. Foot and crossfoot the journal (b) Insert the beginning balances in the Accounts Payable control and subsidiary accounts, and post the November transactions to these accounts (c) Prove the agreement of the control account and the subsidiary account balances

Answer 1

Solution:

Part-1)

Date	Chk No.	Account Debited	Ref No.	Other Accounts Dr.	Accounts Payable Dr.	Inventory Cr.	Cash Cr.
01-Nov	11	Inventory	120	950			950
03-Nov	12	Equipment	157	1,400			1,400
05-Nov	13	W. Rainn			1,300	13	1,287
11-Nov	14	Inventory	120	1,700			1,700
15-Nov	15	R. Wilson			800	24	776
16-Nov	16	Owner's Drawings	306	400			400
19-Nov	17	D. Schrute			2,100	42	2,058
25-Nov	18	Prepaid Insurance	130	2,400			2,400
30-Nov	19	S. Carell					2,900
				6,850	7,100	79	13,871
				(X)	(201)	(120)	(101)

Part-2) Enclosed

Part-3)

Accounts payable balance	1,100
Subsidiary account balances:
S. Carell	1,100

PART-2 Accounts Payable No. 201 Date Explanation Balance Ref. Debit Credit Balance 8,200 Nov. 1 CP1 7,100 1,100 30 Accounts Payable Subsidiary Ledger S. Carell Date Explanation Balance Ref. Debit Credit Balance Nov. 1 4,000 1,100 CP1 2,900 D. Schrute Ref Date Explanation Balance Debit Credit Balance Nov. 1 2,100 СР1 19 2,100 0 R. Wilson Date Balance Explanation Balance Ref. Debit Credit Nov. 1 800 CР1 15 800 0 W. Rainn Date Nov. 1 Debit Explanation Balance Ref. Credit Balance 1,300 СР1 1,300 0 LO 30