Question
PLEASE ANSWER ALL OF THESE QUESTIONS Assignment: Special Journals: Purchases and Cash Payments Part 1 (10 points): Prepare a journal entry for the following transaction:
PLEASE ANSWER ALL OF THESE QUESTIONS
Assignment: Special Journals: Purchases and Cash Payments
Part 1 (10 points): Prepare a journal entry for the following transaction: On December 17, On Your Mark paid $1,500 to Keystone Insurance Company toward the premium for a six-month insurance policy, check No. 1001. *The Account debited is an asset not the name of the Insurance Company.
General Journal | ||||
Date | Description | Post. Ref. | Debit | Credit |
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Part 2 (16 points) Record your cash (or check) paid-out transactions. You are the owner of a store. You purchase items worth $7,800 on account from your main supplier. Most of the purchase is inventory for resale, but also includes office supplies worth $100. The following entry has been made in your Purchases Journal:
| Debit | Credit |
Purchases | $7,700 |
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Office supplies expense | $100 |
|
Accounts payable |
| $7,800 |
Next month, after receiving a statement from your supplier, you write a check to settle your account. Make the following entry in your Cash Receipts Journal:
| Debit | Credit |
Accounts payable | $7,800 |
|
Cash |
| $7,800 |
Assume that your business is a retail store that sells merchandise for resale.
Record the following transactions in the Purchases or Cash Payments journal:
(Note: All dollar amounts have been rounded off to the nearest dollar.)
1) On February 2, you paid an electricity bill of $177.
2) Also on February 2, you bought merchandise inventory on account from Ash Wholesale at a cost of $9,500.
3) On February 5, you spent $82 at Atkins Service Station to fill up your delivery vehicles with gas. You charged it all to the account you maintain with Atkins.
4) On February 8, you write a check for $9,500 in payment of the bill you receive from Ash Wholesale.
5) On February 10, you write a check for $82 to Atkins Service Station to settle your account there.
Upon completion of this journal page, you should foot all amount columns.
Guidelines:
1. Check that all entries were recorded correctly, as you are using a double-entry accounting system.
2. Check to see if the sum of the debits equals the sum of the credits. Total debits: 0 + 9,582 + 9,500 + 82 + 177 = 19,341. Total credits: 9,759 + 9,582 = 19,341.
3. If the sum of the debit columns does not equal the sum of the credit columns, identify where the problem has occurred.
*You may have entered one of the amounts in the wrong column.
*You may have added the totals incorrectly. It is usually easy to pinpoint the error because the debits should equal the credits for each transaction.
Purchases Journal | ||||||||
Date | Invoice No. | Creditors Account Credited | Post Ref. | Accounts Payable Credit | Purchases Debit | General | ||
Account Debited | Post Ref. | Debit | ||||||
Jan. 20 |
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| $7,800 | $7,700 |
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| $100 |
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Cash Payments Journal | ||||||||
Date | DOC No. | Account Name | Post Ref | General | Accounts Payable Debit | Purchases Discounts Credit | Cash in Bank Credit | |
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| Debit | Credit |
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Feb. 1 |
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| $7,800 |
| $7,800 |
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