Problem

Journalizing credit purchases and purchases returns and allowances, computing the net deli...

Journalizing credit purchases and purchases returns and allowances, computing the net delivered cost of goods, posting to the general ledger, posting to the accounts payable ledger, and preparing a schedule of accounts payable.

The English Garden Shop is a retail store that sells garden equipment, furniture, and supplies. Its credit purchases and purchases returns and allowances for July are listed on the next page. The general ledger accounts used to record these transactions are also provided. The balance shown is for the beginning of July 2016.

INSTRUCTIONS

PART I

1. Open the general ledger accounts and enter the balance of Accounts Payable for July 1.
2. Record the transactions in a three-column purchases journal and in a general journal. Use 8 as the page number for the purchases journal and 20 as the page number for the general journal.
3. Post the entries from the general journal to the proper general ledger accounts.
4. Total, prove, and rule the purchases journal as of July 31.
5. Post the column totals from the purchases journal to the proper general ledger accounts.
6. Compute the net delivered cost of the firm’s purchases for the month of July.

GENERAL LEDGER ACCOUNTS

INSTRUCTIONS

PART II

1. Set up an accounts payable subsidiary ledger for The English Garden Shop. Open an account for each of the creditors listed below and enter the balances as of July 1.
2. Post the individual entries from the purchases journal and the general journal prepared in Part I.
3. Prepare a schedule of accounts payable for July 31, 2016.
4. Check the total of the schedule of accounts payable against the balance of the Accounts Payable account in the general ledger. The two amounts should be equal.