This exercise provides practice in understanding the operation of T-accounts and transaction analysis. For each situation, you must solve for a missing amount. Use a T-account for the balance sheet account, show in a horizontal model, or prepare journal entries for the information provided. In each case, there is only one debit entry and one credit entry in the account during the month.

Example:
Accounts Payable had a balance of $6,000 at the beginning of the month and $5,400 at the end of the month. During the month, payments to suppliers amounted to $16,000. Calculate the purchases on account during the month.

Solution:

a. Accounts Receivable had a balance of $25,200 at the beginning of the month and $10,600 at the end of the month. Credit sales totaled $90,000 during the month. Calculate the cash collected from customers during the month, assuming that all sales were made on account.
b. The Supplies account had a balance of $40,000 at the beginning of the month and $49,600 at the end of the month. The cost of supplies used during the month was $157,200. Calculate the cost of supplies purchased during the month.
c. Wages Payable had a balance of $7,600 at the beginning of the month. During the month, $30,200 of wages were paid to employees.

Transcribed Image Text:

Accounts Payable Beginning balance Payment 16,000 Purchase Ending balance 6,000 ?=15,400 5,400 Dr. Accounts Payable 16,000 Cr. Cash.... Payments to suppliers. 16,000 Dr. Inventory.... 15,400 Cr. Accounts Payable ....... Purchases on account. 15,400