Antique Jewels Pty Ltd’s chart of accounts includes the following selected accounts. 

On 1 October the accounts payable ledger of Antique Jewels Pty Ltd showed the following balances: Diamond Factory Ltd $3740, Precious Stones Ltd $5500, Rubys R Us Ltd $3080, and Angus and Bandicoot $11 100. The October transactions involving the payment of cash were as follows.

Required

(a) Journalise the transactions above in a five-column cash payments journal with columns for Other Accounts Dr, Accounts Payable Dr, Inventory Cr, Discount Received Cr, and Cash Cr. Total and cross-foot the journal.

(b) Insert the beginning balances in the Accounts Payable Control and subsidiary accounts, and post the October transactions to these accounts.

(c) Check that the control account and the subsidiary account balances agree.

(d) Amy Liu, the managing director of the Antique Jewels Pty Ltd, recently found out that its major supplier, Angus and Bandicoot, supplied them with stolen diamonds. The information is not public knowledge and Valentine’s Day, when a large amount of stock is sold, is approaching. Discuss what actions Amy could take and the social and financial implications of her actions for the company.  

Transcribed Image Text:

101 Cash 120 Inventory 130 Prepaid Insurance 157 Equipment 201 306 405 505 Accounts Payable Amy Amethyst, Drawings Discount Received Cost of Sales