P7-3A
Journalize transactions in multi-column purchases journal and sales journal; post to the general and subsidiary ledgers.
(LO 2,3)
The chart of accounts of LR Company includes the following selected accounts.
112 Accounts Receivable	401 Sales Revenue
120 Inventory	412 Sales Returns and Allowances
126 Supplies	505 Cost of Goods Sold
157 Equipment	610 Advertising Expense
201 Accounts Payable
In July, the following transactions were completed. All purchases and sales were on account. The cost of all merchandise sold was 70% of the sales price.
July1	Purchased merchandise from Eby Company $8,000.
2	Received freight bill from Shaw Shipping on Eby purchase $400.
3	Made sales to Fort Company $1,300 and to Hefner Bros. $1,500.
5	Purchased merchandise from Getz Company $3,200.
8	Received credit on merchandise returned to Getz Company $300.
13	Purchased store supplies from Dayne Supply $720.
15	Purchased merchandise from Eby Company $3,600 and from Bosco Company $4,300.
16	Made sales to Aybar Company $3,450 and to Hefner Bros. $1,870.
18	Received bill for advertising from Welton Advertisements $600.
21	Sales were made to Fort Company $310 and to Duncan Company $2,800.
22	Granted allowance to Fort Company for merchandise damaged in shipment $40.
24	Purchased merchandise from Getz Company $3,000.
26	Purchased equipment from Dayne Supply $900.
28	Received freight bill from Shaw Shipping on Getz purchase of July 24, $380.
30	Sales were made to Aybar Company $5,600.
Instructions
(a)Journalize the transactions above in a purchases journal, a sales journal, and a general journal. The purchases journal should have the following column headings: Date, Account Credited (Debited), Ref., Accounts Payable Cr., Inventory Dr., and Other Accounts Dr.
Purchases journalAccounts Payable $25,100
Sales journalSales Revenue total $16,830
(b)Post to both the general and subsidiary ledger accounts. (Assume that all accounts have zero beginning balances.)
(c)Prove the agreement of the control and subsidiary accounts.
Accounts Receivable $16,790
Accounts Payable $24,800