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PB–24A, cont.
Requirements 1, 2, and 3, cont.
PB–25A Using the purchases, cash payments, and general journals
Learning Objective 3
Purchases Journal, Accounts Payable CR column total $19,540
The general ledger of Shiny Lake Golf Shop includes the following selected accounts, along with
their account numbers:
Number Account Number Account
111 Cash 181 Equipment
131 Merchandise Inventory 211 Accounts Payable
161 Prepaid Insurance 564 Rent Expense
171 Office Supplies 583 Utilities Expense
Transactions in December that affected purchases and cash payments follow:
Dec. 2 Purchased merchandise inventory on credit from Tomas, $4,500. Terms were 1/10, n/30.
3 Paid monthly rent, debiting Rent Expense for $2,300.
5 Purchased office supplies on credit terms of 1/10, n/30 from Right Supply, $440.
8 Received and paid electricity utility bill, $580.
9 Purchased equipment on account from Ace Equipment, $6,600. Payment terms were n/30.
10 Returned the equipment to Ace Equipment. It was damaged.
11 Paid Tomas the amount owed on the purchase of December 2.
12 Purchased merchandise inventory on account from Callahan Golf, $4,000. Terms were
3/10, n/30.
13 Purchased merchandise inventory for cash, $600.
14 Paid a semiannual insurance premium, debiting Prepaid Insurance, $1,400.
16 Paid its account payable to Right Supply from December 5.
18 Received and paid gas and water utility bills, $200.
21 Purchased merchandise inventory on credit terms of 2/10, n/45 from Dormer, Inc., $3,400.
21 Paid its account payable to Callahan Golf from December 12.
22 Purchased office supplies on account from Office World, Inc., $600. Terms were n/30.
26 Returned to Dormer, Inc. $1,000 of the merchandise inventory purchased on December 21.
31 Paid Dormer, Inc. the net amount owed from December 21 less the return on December 26.
PB–25A, cont.
Requirements
1. Shiny Lake Golf Shop records purchase returns in the general journal. Use the appropriate
journal to record the transactions in a purchases journal, a cash payments journal (omit the
Check No. column), and a general journal. The company uses the perpetual inventory system.
2. Total each column of the special journals. Show that total debits equal total credits in each
special journal.
3. Show how postings would be made from the journals by writing the account numbers and
check marks in the appropriate places in the journals.
SOLUTION
Requirements 1, 2 and 3
PB–25A, cont.
Requirements 1, 2, and 3, cont.
PB–25A, cont.
Requirements 1, 2 and 3, cont.
PB–26A Using all journals, posting, and balancing the ledgers
Learning Objectives 2, 3
Trial balance, total debits $48,600
Tulsa Computer Security uses the perpetual inventory system and makes all credit sales on terms
of n/30. Tulsa completed the following transactions during May:
May 2 Issued invoice no. 913 for sale on account to K. D. King, $2,200 (cost, $1,500).
3 Purchased merchandise inventory on credit terms of 3/10, n/60 from Henderson Co.,
$2,900.
5 Sold merchandise inventory for cash, $1,800 (cost, $350).
5 Issued check no. 532 to purchase furniture for cash, $2,950.
8 Collected interest revenue of $1,350.
9 Issued invoice no. 914 for sale on account to Berkner Co., $5,700 (cost, $2,000).
10 Purchased merchandise inventory for cash, $1,000, issuing check no. 533.
12 Received cash from K. D. King in full settlement of her account receivable from the sale on
May 2.
13 Issued check no. 534 to pay Henderson Co. the net amount owed from May 3. Round to the
nearest dollar.
13 Purchased office supplies on account from Magyar, Inc., $500. Terms were n/EOM.
15 Sold merchandise inventory on account to M. O. Small, issuing invoice no. 915 for $850
(cost, $400).
18 Issued invoice no. 916 for credit sale to K. D. King, $300 (cost, $150).
19 Received cash from Berkner Co. in full settlement of its account receivable from May 9.
20 Purchased merchandise inventory on credit terms of n/30 from Silva Distributing, $2,100.
22 Purchased furniture on credit terms of 3/10, n/60 from Henderson Co., $500.
22 Issued check no. 535 to pay for insurance coverage, debiting Prepaid Insurance for $1,400.
24 Sold office supplies to an employee for cash of $125, which was Tulsa’s cost.
25 Received bill and issued check no. 536 to pay utilities, $550.
28 Purchased merchandise inventory on credit terms of 2/10, n/30 from Magyar, Inc., $575.
29 Returned damaged merchandise inventory to Magyar, Inc., issuing a debit memo for $575.
29 Sold merchandise inventory on account to Berkner Co., issuing invoice no. 917 for $2,400
(cost, $1,400).
30 Issued check no. 537 to pay Magyar, Inc. in full for May 13 purchase.
31 Received cash in full from K. D. King on credit sale of May 18.
31 Issued check no. 538 to pay monthly salaries of $2,250.
PB–26A, cont.
Requirements
1.Open four-column general ledger accounts using Tulsa’s account numbers and balances as of
May 1, 2018, that follow. All accounts have normal balances.
Number Account Bal.
111 Cash $ 15,000
112 Accounts Receivable 1,700
114 Merchandise Inventory 7,000
116 Office Supplies 600
117 Prepaid Insurance 0
151 Furniture 2,200
211 Accounts Payable 900
311 Common Stock 10,000
314 Retained Earnings 11,400
411 Sales Revenue 7,800
419 Interest Revenue 1,300
511 Cost of Goods Sold 2,800
531 Salaries Expense 1,900
541 Utilities Expense 200
2. Open four-column accounts in the subsidiary ledgers with beginning balances as of May 1, if any.
Accounts receivable subsidiary ledger—Balakrishnan Co., $1,700; Berkner Co., $0; M. O. Small, $0;
and K. D. King, $0. Accounts payable subsidiary ledger—Henderson Co., $0; Magyar, Inc., $0; Silva
Distributing, $0; and White Co., $900.
3. Enter the transactions in a sales journal (page 7), a cash receipts journal (page 5, omit Sales Discounts
Forfeited column), a purchases journal (page 10), a cash payments journal (page 8), and a general
journal (page 6), as appropriate.
4. Post daily to the accounts receivable subsidiary ledger and to the accounts payable subsidiary ledger.
5. Total each column of the special journals. Show that total debits equal total credits in each special
journal. On May 31, post to the general ledger.
6. Prepare a trial balance as of May 31, 2018, to verify the equality of the general ledger. Balance the
total of the customer account ending balances in the accounts receivable subsidiary ledger against
Accounts Receivable in the general ledger. Do the same for the accounts payable subsidiary ledger and
Accounts Payable in the general ledger.
PB–26A, cont.
SOLUTION
Requirements 1 and 5
