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.

Digital World is a retail store that sells cameras and photography supplies. The firm’s credit purchases and purchases returns and allowances transactions for June 2016 appear below, along with the general ledger accounts used to record these transactions. The balance shown in Accounts Payable is for the beginning of June.

INSTRUCTIONS

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

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2. Record the transactions in a three-column purchases journal and in a general journal. Use 14 as the page number for the purchases journal and 38 as the page number for the general journal.

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

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4. Total and rule the purchases journal as of June 30.

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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 June.

GENERAL LEDGER ACCOUNTS

205 Accounts Payable, $14,404 Cr.

501 Purchases

502 Freight In

503 Purchases Returns and Allowances

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

Analyze: What total purchases were posted to the Purchases general ledger account for June?