1. Purchases and Cash Payments Journals; Accounts Payable subsidiary and General Ledgers

   West Texas Exploration Co. was established on October 15 to provide oil-drilling services. West Texas uses field equipment (rigs and pipe) and field supplies (drill bits and lubricants) in its operations. Transactions related to purchases and cash payments during the remainder of October are as follows:

   Oct. 16.		Issued Check No. 1 in payment of rent for the remainder of October, $7,000.
   16.		Purchased field equipment on account from Petro Services Inc., $32,600.
   17.		Purchased field supplies on account from Midland Supply Co., $9,780.
   18.		Issued Check No. 2 in payment of field supplies, $4,570, and office supplies, $650.
   20.		Purchased office supplies on account from A-One Office Supply Co., $1,320.
   		Post the journals to the accounts payable subsidiary ledger.
   24.		Issued Check No. 3 to Petro Services Inc., in payment of October 16 invoice.
   26.		Issued Check No. 4 to Midland Supply Co. in payment of October 17 invoice.
   28.		Issued Check No. 5 to purchase land, $240,000.
   28.		Purchased office supplies on account from A-One Office Supply Co., $3,670.
   		Post the journals to the accounts payable subsidiary ledger.
   30.		Purchased the following from Petro Services Inc. on account: field supplies, $25,300 and office equipment, $5,500.
   30.		Issued Check No. 6 to A-One Office Supply Co. in payment of October 20 invoice.
   30.		Purchased field supplies on account from Midland Supply Co., $12,450.
   31.		Issued Check No. 7 in payment of salaries, $32,000.
   31.		Rented building for one year in exchange for field equipment having a cost of $15,000.
   		Post the journals to the accounts payable subsidiary ledger.

   Required:

   1. Journalize the transactions (in chronological order as presented in the data) for October. Use a purchases journal and a cash payments journal, and a two-column general journal. Use debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:

   11	Cash	18	Office Equipment
   14	Field Supplies	19	Land
   15	Office Supplies	21	Accounts Payable
   16	Prepaid Rent	61	Salary Expense
   17	Field Equipment	71	Rent Expense

   At the points indicated in the narrative of transactions, post to the following subsidiary accounts in the accounts payable ledger:

   A-One Office Supply Co.

   Midland Supply Co.

   Petro Services Inc.

   2. Post the individual entries in chronological order (Other Accounts columns of the purchases journal and the cash payments journal; both columns of the general journal) to the appropriate general ledger accounts.

   3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledge in chronological order. However, if there is more than one entry on the same date, post from the purchases journal before posting from the cash payments journal.r.

   If no other account is needed in the "Other Accounts Dr." column select "No Entry Required". For those boxes in which no entry is required, leave the box blank.

   PURCHASES JOURNAL								PAGE 1
   Date	Account Credited	Post. Ref.	Accounts Payable Cr.	Field Supplies Dr.	Office Supplies Dr.	Other Accounts Dr.	Post. Ref.	Amount
   Oct. 16	Petro Services Inc.					Field Equipment
   Oct. 17	Midland Supply Co.
   Oct. 20	A-One Office Supply Co.
   Oct. 28	A-One Office Supply Co.
   Oct. 30	Petro Services Inc.					Office Equipment
   Oct. 30	Midland Supply Co.
   Oct. 31

   CASH PAYMENTS JOURNAL						PAGE 1
   Date	Ck No.	Account Debited	Post Ref.	Other Accounts Dr.	Accounts Payable Dr.	Cash Cr.
   Oct. 16		Rent Expense
   Oct. 18		Field Supplies
   		Office Supplies
   Oct. 24		Petro Services Inc.
   Oct. 26		Midland Supply Co.
   Oct. 28		Land
   Oct. 30		A-One Office Supply Co.
   Oct. 31		Salary Expense
   Oct. 31		Total

   JOURNAL				PAGE 1
   Date	Description	Post. Ref.	Debit	Credit

   ACCOUNTS PAYABLE SUBSIDIARY LEDGER
   Date	Item	Post. Ref.	Debit	Credit	Balance
   Account: A-One Office Supply Co.
   Oct. 20
   Account: Midland Supply Co.
   Account: Petro Services Inc.

   (Because the problem does not include transactions related to cash receipts, the cash account in the ledger will have a credit balance.)

   GENERAL LEDGER
   					Balance
   Date	Item	Post. Ref.	Debit	Credit	Dr	Cr
   Account: Cash #11
   Account: Field Supplies #14
   Account: Office Supplies #15
   Account: Prepaid Rent #16
   Account: Field Equipment #17
   Account: Office Equipment #18
   Account: Land #19
   Account: Accounts Payable #21
   Account: Salary Expense #61
   Account: Rent Expense #71

   4. Sum the balances of the accounts payable creditor balances.

   WEST TEXAS EXPLORATION CO. Accounts Payable Creditor Balances October 31
   A-One Office Supply Co.	$
   Midland Supply Co.
   Petro Services Inc.
   Total accounts payable	$

   5. All are reasons why West Texas might consider using a subsidiary ledger for the field equipment EXCEPT: