Problem

Journalizing purchases, cash payments, and purchases discounts; posting to the general led...

Journalizing purchases, cash payments, and purchases discounts; posting to the general ledger.

The Bike and Hike Outlet is a retail store. Transactions involving purchases and cash payments for the firm during June 2016 are listed below as are the general ledger accounts used to record these transactions.

INSTRUCTIONS

1. Open the general ledger accounts and enter the balances as of June 1, 2016.
2. Record the transactions in a purchases journal, a cash payments journal, and a general journal. Use 8 as the page number for each of the special journals and 20 as the page number for the general journal.
3. Post the entries from the general journal and from the Other Accounts Debit section of the cash payments journal to the proper general ledger accounts.
4. Total, prove, and rule the special journals as of June 30.
5. Post the column totals from the special journals to the general ledger.
6. Show how the firm’s net cost of purchases would be reported on its income statement for the month ended June 30.

GENERAL LEDGER ACCOUNTS