Journalizing credit purchases and purchases returns and allowances and posting to the gene...

Journalizing credit purchases and purchases returns and allowances and posting to the general ledger.

Mountain Ski Shop is a retail store that sells ski equipment and clothing. The firm’s credit purchases and purchases returns and allowances during May 2016 follow, along with the general ledger accounts used to record these transactions. The balance shown in Accounts Payable is for the beginning of May.

INSTRUCTIONS

1. Open the general ledger accounts and enter the balance of Accounts Payable for May 1, 2016.

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2. Record the transactions in a three-column purchases journal and in a general journal. Use 15 as the page number for the purchases journal and 38 as the page number for the general journal.

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3. Post the entries from the general journal to the proper general ledger accounts.

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4. Total and rule the purchases journal as of May 31.

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5. Post the column totals from the purchases journal to the proper general ledger accounts.

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6. Compute the net purchases of the firm for the month of May.

GENERAL LEDGER ACCOUNTS

205 Accounts Payable, $21,608 Cr.

501 Purchases

502 Freight In

503 Purchases Returns and Allowances

(Note: Save your working papers for use in Problem 8.2B.)

Analyze: What total accounts payable were posted from the purchases journal to the general ledger for the month?