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

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

Contemporary Appliance Center is a retail store that sells a variety of household appliances. Transactions involving purchases and cash payments for the firm during December 2016 are listed below and on the next page. The general ledger accounts used to record these transactions appear below.

INSTRUCTIONS

1. Open the general ledger accounts and enter the balances in these accounts as of December 1, 2016.

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2. Record the transactions in a purchases journal, a cash payments journal, and a general journal. Use 12 as the page number for each of the special journals and 30 as the page number for the general journal.

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3. Post the entries from the general journal and from the Other Accounts Debit section of the cash payments journal to the proper accounts in the general ledger.

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4. Total, prove, and rule the special journals as of December 31, 2016.

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5. Post the column totals from the special journals to the general ledger accounts.

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6. Show how the firm’s cost of purchases would be reported on its income statement for the month ended December 31, 2016.

GENERAL LEDGER ACCOUNTS

Analyze: List the dates for transactions in December that would be categorized as expenses of the business.