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

Journalizing credit purchases and purchases returns and allowances, posting to the general ledger, posting to the accounts payable ledger, and preparing a schedule of accounts payable.

Simpson’s Card and Novelty Shop is a retail card, novelty, and business supply store. Its credit purchases and purchases returns and allowances for February 2016 appear on the next page. The general ledger accounts and the creditors’ accounts in the accounts payable subsidiary ledger used to record these transactions are also provided. The balance shown is for the beginning of February.

INSTRUCTIONS

1. Open the general ledger accounts and enter the balance of Accounts Payable for February.

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2. Open the creditors’ accounts in the accounts payable subsidiary ledger and enter the balances for February 1, 2016.

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3. Record each transaction in the appropriate journal, purchases or general. Use page 4 in the purchases journal and page 12 in the general journal.

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4. Post entries to the accounts payable subsidiary ledger daily.

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5. Post entries in the general journal to the proper general ledger accounts at the end of the month.

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6. Total and rule the purchases journal as of February 29.

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7. Post the totals to the appropriate general ledger accounts.

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8. Calculate the net delivered cost of purchases.

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9. Prepare a schedule of accounts payable and compare the balance of the Accounts Payable control account with the schedule of accounts payable.

GENERAL LEDGER ACCOUNTS

203 Accounts Payable, $15,200 credit balance

501 Purchases

502 Freight In

503 Purchases Returns and Allowances

Analyze: What total amount did Simpson’s Card and Novelty Shop pay in freight charges during the month of February? What percentage of delivered cost of purchases does this represent?