Simpson’s caters food to area corporate offices for their partices. Its chart of accounts includes the following selected accounts. LO4 101 Cash 201 Accounts Payable 120 Merchandise Inventory 332 Dividends 130 Prepaid Insurance 505 Cost of Goods Sold 157 Equipment On October 1 the accounts payable ledger of Simpson Company showed the following balances:

Hester Foods $1,700, Milo Sausages $2,500, Ontario Fruits $1,400, and Pagan Produce $3,700.

The October transactions involving the payment of cash were as follows.

Oct. 1 Purchased merchandise, check no. 63, $700.

3 Purchased equipment, check no. 64, $800.

5 Paid Hester Foods balance due of $1,700, less 2 percent discount, check no. 65, $1,666.

10 Purchased merchandise, check no. 66, $2,250.

15 Paid Ontario Fruits balance due of $1,400, check no. 67.

16 A cash dividend is paid in the amount of $400, check no. 68.

19 Paid Milo Sausages in full for invoice no. 610, $1,400 less 2 percent cash discount, check no. 69, $1,372.

29 Paid Pagan Produce in full for invoice no. 264, $2,600, check no. 70.

Instructions

(a) Journalize the transactions above in a four-column cash payments journal with columns for Other Accounts Dr., Accounts Payable Dr., Merchandise Inventory Cr., and Cash Cr.

Foot 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) Prove the agreement of the control account and the subsidiary account balances.