Black Gold Tea Exploration Co. was established on March 15, 2010, to provide oil-drilling services. Black Gold Tea uses field equipment (rigs and pipe) and field supplies (drill bits and lubricants) in its operations. Transactions related to purchases and cash payments during the remainder of March are as follows:

Mar. 16. Issued Check No. 1 in payment of rent for the remainder of March, $5,000.

16. Purchased field equipment on account from PMI Sales Inc., $29,400.

17. Purchased field supplies on account from Culver Supply Co., $9,320.

Mar. 18. Issued Check No. 2 in payment of field supplies, $2,180, and office supplies, $450.

20. Purchased office supplies on account from A-One Office Supply Co., $1,110.

Post the journals to the accounts payable subsidiary ledger.

24. Issued Check No. 3 to PMI Sales Inc., in payment of March 16 invoice.

26. Issued Check No. 4 to Culver Supply Co. in payment of March 17 invoice.

28. Issued Check No. 5 to purchase land, $170,000.

28. Purchased office supplies on account from A-One Office Supply Co., $2,670.

Post the journals to the accounts payable subsidiary ledger.

30. Purchased the following from PMI Sales Inc. on account: field supplies, $22,340 and office equipment, $12,200.

30. Issued Check No. 6 to A-One Office Supply Co. in payment of March 20 invoice.

30. Purchased field supplies on account from Culver Supply Co., $11,900.

31. Issued Check No. 7 in payment of salaries, $26,000.

31. Rented building for one year in exchange for field equipment having a cost of $12,000.

Post the journals to the accounts payable subsidiary ledger.

Instructions

1. Journalize the transactions for March. Use a purchases journal and a cash payments journal, similar to those illustrated in this chapter, and a two-column general journal. Set debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:

11 Cash 18 Office Equipment

14 Field Supplies 19 Land

15 Office Supplies 21 Accounts Payable

16 Prepaid Rent 61 Salary Expense

17 Field Equipment 71 Rent Expense

At the points indicated in the narrative of transactions, post to the following accounts in the accounts payable ledger:

A-One Office Supply Co.

Culver Supply Co.

PMI Sales Inc.

2. Post the individual entries (Other Accounts columns of the purchases journal and the cash payments journal; both columns of the general journal) to the appropriate general ledger accounts.

3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger. (Because the problem does not include transactions related to cash receipts, the cash account in the ledger will have a credit balance.)

4. Prepare an accounts payable subsidiary ledger.