10
Purchases and Cash
Payments in a Perpetual
Inventory System
ANSWERS TO DISCUSSION QUESTIONS AND
4. F.O.B. shipping point means the buyer pays the cost of shipping: F.O.B. destination
means the seller is responsible for the cost of shipping.
8. The purchase requisition is a document that initiates the request to prepare a
purchase order.
10. Merchandise is for resale; equipment is an asset used to help create sales and is
not for resale.
12. A cash discount is for early payment; trade discounts are reductions off the
15. The question is whether Mel and Joanne should backdate the check in order to
make the discount period. Although a business should try to pay bills during the
SOLUTIONS TO CHAPTER 10 CONCEPT CHECKS
1.
a.
Sales Returns and Allowances
43
Accounts Receivable, Lenny Co.
43
b.
Cash
183
Sales
Merchandise Inventory
c.
Cash
d.
Merchandise Inventory
Accounts Payable, Joseph Co.
31
e.
Merchandise Inventory
Cash
Accounts Payable, Joseph Co.
Merchandise Inventory
2. .
RONSON.COM
SCHEDULE OF ACCOUNTS PAYABLE
MAY 31, 201X
3.
Accounts Payable, Pedro Co.
2
2
0
00
4.
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Buyer:
Accounts Payable, Labrie Co.
2
7
5
00
2
7
5
5.
SOLUTIONS TO SET A EXERCISES
10A–1.
PAGE 2
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Jun.
3
Merchandise Inventory
105
9
4
0
00
9
4
0
4
Merchandise Inventory
6
2
0
00
6
2
0
8
Equipment
120
1
9
0
00
1
9
0
SUBSIDIARY LEDGER GENERAL LEDGER
Courtland.com
Merch. Inventory
105
940 GJ2 6/3
GJ2 6/3
940
GJ2 6/4
620
Accounts Payable
10A–2.
Oct.
10
Accounts Payable, Roger Co.
211/√
4
4
0
00
SUBSIDIARY LEDGER GENERAL LEDGER
Roger Co.
Merchandise Inventory
113
Accounts Payable
211
10A–3.
PAGE 2
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Apr.
1
Accounts Payable, A. Jordan
210/√
5
0
0
00
Merchandise Inventory
115
3
5
00
1
0
1
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
PARTIAL GENERAL LEDGER
B. Campbell
100
A. Jordan
Cash
110
4/01 GJ2 500
500
3,100
465 GJ2 4/1
101 GJ2 4/8
200 GJ2 4/15
4/15 GJ2 200
200
400
EXERCISES (CONTINUED)
10A–4.
JACOB’S CLOTHING
SCHEDULE OF ACCOUNTS PAYABLE
APRIL 30, 201X
Accounts Payable
210
4-15 200
10A–5.
Account Category Increase Dr. or Cr.
SOLUTIONS TO SET B EXERCISES
10B–1.
PAGE 2
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Jun.
3
Merchandise Inventory
105
9
3
0
00
9
3
0
4
Merchandise Inventory
6
1
0
00
6
1
0
8
Equipment
120
2
2
0
00
2
2
0
SUBSIDIARY LEDGER GENERAL LEDGER
Eve.com
Merch. Inventory
105
Jack.com
Equipment
120
June 3
GJ2 930
610 GJ2 June 4
June 8 GJ2 220
Noel.com
Accounts Payable
210
10B–2.
EXERCISES (CONTINUED)
SUBSIDIARY LEDGER GENERAL LEDGER
10B–3.
PAGE 2
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Apr.
1
Accounts Payable, A. Jae
210/√
1
4
0
0
00
1
3
8
6
8
9
6
00
15
Accounts Payable, B. Miller
210/√
8
0
0
00
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
PARTIAL GENERAL LEDGER
J. Hall
Cash
110
1,100
3,600
1,386 GJ2 4/1
A. Jae
Merch. Inventory
115
4/1 GJ2 1,400
14 GJ2 4/1
B. Miller
Accounts Payable
210
3,550
Bal. 1,350
Advertising Expense
610
EXERCISES (CONTINUED)
10B–4.
CODY’S CLOTHING
SCHEDULE OF ACCOUNTS PAYABLE
APRIL 30, 201X
10B–5.
Account Category Increase Dr. or Cr
PROBLEM 10A-1
ROBERT’S SKATE SHOP
GENERAL JOURNAL
PAGE 2
4
Merchandise Inventory
120
6
0
0
00
6
0
0
Date
5
Store Equipment
130
4
6
0
0
00
4
6
0
0
8
Merchandise Inventory
120
1
7
0
0
00
1
7
0
0
Store Supplies
1
0
0
0
00
1
0
0
0
PROBLEM 10A-1 (CONTINUED)
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
NAME
WALES CO.
ADDRESS
12 SMITH ST., DEARBORN, Ml 09113
201X
Ref.
Credit
Cr. Balance
Date
Post
NAME
KINGSTON CO.
ADDRESS
1 RANTOUL RD., CHARLOTTE, NC 01114
Date
201X
Explanation
Post
Ref.
Debit
Credit
Cr. Balance
5
4
4
NAME
ROLO CO.
ADDRESS
2 WEST RD., LYNN, MA 01471
Date
201X
Explanation
Post
Ref.
Debit
Credit
Cr. Balance
8
1
1
PARTIAL GENERAL LEDGER
STORE SUPPLIES
ACCOUNT NO. 115
Date
201X
Explanation
Post
Ref.
Debit
Credit
Balance
Debit
Credit
GJ2
1
1
PROBLEM 10A-1 (CONCLUDED)
MERCHANDISE INVENTORY
ACCOUNT NO. 120
201X
Debit
Credit
Debit
Credit
Date
Explanation
Post
Ref.
Balance
STORE EQUIPMENT
ACCOUNT NO. 130
201X
Debit
Credit
Debit
Credit
May
5
GJ2
4
6
0
0
00
4
6
0
0
00
Date
Explanation
Post
Ref.
Balance
ACCOUNTS PAYABLE
ACCOUNT NO. 210
Date
201X
Explanation
Post
Ref.
Debit
Credit
Balance
Debit
Credit
May
4
GJ2
6
0
0
00
6
0
0
00
PROBLEM 10A-2
(1)
RILEY’S NATURAL FOOD STORE
GENERAL JOURNAL
PAGE 2
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Apr.
8
Merchandise Inventory
115
7
5
0
00
Accounts Payable, Aris Co.
210/√
7
5
0
00
10
Merchandise Inventory
115
3
5
0
00
1
3
12
Store Supplies
110
4
0
0
00
Accounts Payable, Moose Co.
210/√
4
0
0
00
14
Accounts Payable, Aris Co.
210/√
3
0
0
00
Merchandise Inventory
115
3
0
0
00
17
Office Equipment
120
6
4
0
00
6
24
Store Supplies
110
8
5
0
00
Accounts Payable, Moose Co.
210/√
8
5
0
00
(2)
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
NAME
ARIS CO.
ADDRESS
11 LYNNWAYAVE., NEWPORT, RI 03112
Date
201X
Explanation
Post
Ref.
Debit
Credit
Cr. Balance
1
Balance
3
5
8
7
1
1
0
3
0
8
0
PROBLEM 10A-2 (CONTINUED)
NAME
BROWN CO.
ADDRESS
21 RIVER ST., ANAHEIM, CA 43110
201X
Explanation
Ref.
Debit
Credit
Cr. Balance
1
2
Date
Post
NAME
MOOSE CO.
ADDRESS
10 ASTER RD., DUBUQUE, IA 80021
Date
201X
Explanation
Post
Ref.
Debit
Credit
Cr. Balance
1
1
2
NAME
READY CO.
ADDRESS
22 GERALD RD., SMITH, CO 43138
Date
201X
Explanation
Post
Ref.
Debit
Credit
Cr. Balance
1
PARTIAL GENERAL LEDGER
STORE SUPPLIES
ACCOUNT NO. 110
Date
201X
Explanation
Post
Ref.
Debit
Credit
Balance
Debit
Credit
PROBLEM 10A-2 (CONTINUED)
MERCHANDISE INVENTORY
ACCOUNT NO. 115
201X
Explanation
Ref.
Debit
Credit
Debit
Credit
Apr.
1
Balance
√
0
0
0
GJ2
1
GJ2
Date
Post
Balance
OFFICE EQUIPMENT
ACCOUNT NO. 120
201X
Explanation
Ref.
Debit
Credit
Balance
Credit
Apr.
GJ2
6
4
0
6
4
0
ACCOUNTS PAYABLE
ACCOUNT NO. 210
Date
201X
Explanation
Post
Ref.
Debit
Credit
Balance
Debit
Credit
Apr.
1
Balance
√
3
2
0
0
00
GJ2
1
5
GJ2
5
GJ2
5
GJ2
6
(3)
RILEY’S NATURAL FOOD STORE
SCHEDULE OF ACCOUNTS PAYABLE
APRIL 30, 201X
Aris Co.
$
8
0
0
00
6
0
0
3
4
0
(1) Page 5
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Mar.
1
Accounts Payable, Henderson Co.
210/√
2
0
0
00
Merchandise Inventory
120
1
4
00
Cash
110
1
8
6
00
Cash
110
8
0
0
0
00
Purchase Truck for Cash
6
Merchandise Inventory
120
2
5
0
0
00
Cash
110
2
5
0
0
00
Purchased Computer Merch. for Cash
18
Merchandise Inventory
120
7
5
0
00
Cash
110
7
5
0
00
Merchandise Inventory
120
9
1
00
Paid Xhosa Co.
28
Rent Expense
610
2
2
0
0
00
Cash
110
2
2
0
0
00
Paid Rent Expense
29
Utilities Expense
620
2
8
0
00
Cash
110
2
8
0
00
Paid Utilities Expense
30
Accounts Payable, Squash Co.
210/√
4
5
0
00
Cash
110
4
5
0
00
PROBLEM 10A-3 (CONTINUED)
(2)
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
NAME
ANDERSEN CO.
ADDRESS
1 REACH RD., IPSWICH, MA 01932
Explanation
Ref.
Debit
Cr. Balance
1
Balance
1
Date
Post
NAME
HENDERSON CO.
ADDRESS
1 RALPH RD., REVERE, MA 01321
Date
201X
Explanation
Post
Ref.
Debit
Credit
Cr. Balance
1
Balance
1
NAME
SQUASH CO.
ADDRESS
7 PLYMOUTH AVE., GLENN, NH 01218
201X
Balance
Date
Post
NAME
XHOSA CO
ADDRESS
22 REY RD., BOCA RATON, FL 99132
201X
Ref.
Debit
GJ5
3
Date
Post
PROBLEM 10A-3 (CONTINUED)
PARTIAL GENERAL LEDGER
CASH
ACCOUNT NO. 110
Date
201X
Explanation
Post
Ref.
Debit
Credit
Balance
Debit
Credit
Mar.
1
Balance
√
22
0
0
0
00
1
GJ5
1
8
6
00
21
8
1
4
00
3
GJ5
8
0
0
0
00
13
8
1
4
00
6
GJ5
2
5
0
0
00
11
3
1
4
00
GJ5
7
5
0
00
10
5
6
4
00
GJ5
1
2
0
9
00
9
3
5
5
00
GJ5
2
2
0
0
00
7
1
5
5
00
GJ5
2
8
0
00
6
8
7
5
00
GJ5
4
5
0
00
6
4
2
5
00
MERCHANDISE INVENTORY
ACCOUNT NO.120
Date
201X
Explanation
Post
Ref.
Debit
Credit
Balance
Debit
Credit
Mar.
1
balance
4
0
0
0
00
1
GJ5
1
4
00
3
9
8
6
00
6
GJ5
2
5
0
0
6
4
8
6
00
GJ5
7
5
0
7
2
3
6
00
GJ5
9
1
00
7
1
4
5
00
DELIVERY TRUCK
ACCOUNT NO. 150
Date
201X
Explanation
Post
Ref.
Debit
Credit
Balance
Debit
Credit
GJ5
8
0
0
0
8
0
0
0
ACCOUNTS PAYABLE
ACCOUNT NO. 210
201X
Explanation
Ref.
Debit
Credit
Debit
Credit
Mar.
1
Balance
√
3
8
0
0
1
GJ5
2
0
0
3
6
0
0
GJ5
1
3
0
0
2
3
0
0
GJ5
4
5
0
1
8
5
0
Date
Post
Balance
PROBLEM 10A-3 (CONCLUDED)
RENT EXPENSE
ACCOUNT NO. 610
ACCOUNT NO. 620
Balance
GJ5
Balance
(3)
DREW COMPUTER CENTER
SCHEDULE OF ACCOUNTS PAYABLE
MARCH 31, 201X
Andersen Co.
$1
2
0
0
00