Problem

Merchandising: Sales and PurchasesFashion Standards is a retail clothing store. Sales of m...

Merchandising: Sales and Purchases

Fashion Standards is a retail clothing store. Sales of merchandise and purchases of goods on account for January 2016, the first month of operations, appear below.

INSTRUCTIONS

1. Record the purchases of goods on account on page 6 of a three-column purchases journal.
2. Record the sales of merchandise on account on page 1 of a sales journal.
3. Post the entries from the purchases journal and the sales journal to the individual accounts in the accounts payable and accounts receivable subsidiary ledgers. Use the following account numbers:
Accounts Receivable 111
Accounts Payable 205
Sales Tax Payable 231
Sales 401
Purchases 501
Freight In 502
All customers have n/30 credit terms.
4. Total, prove, and rule the journals as of January 31.
5. Post the column totals from the special journals to the proper general ledger accounts.
6. Prepare a schedule of accounts payable for January 31.
7. Prepare a schedule of accounts receivable for January 31.