The chart of accounts of LR Company includes the following selected accounts. 112 Accounts Receivable ......401 Sales

Question:

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 selected transactions were completed. All purchases and sales were on account. The cost of all merchandise sold was 70% of the sales price.

July 1 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.

(b) Post to both the general and subsidiary ledger accounts. (Assume that all accounts have zero beginning balances.)

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...