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Chapter 1: AB-10SE (page 34)

Recording transactions in a cash payments journal

Jan. 5 Issued check no. 430 to purchase equipment for cash, \(1,700.

7 Purchased merchandise inventory for cash, \)450, issuing check no. 431.

18 Paid Kat Co. amount owed, \(775, less \)100 discount. Issued check no.

432.

28 Issued check no. 433 to pay utilities, $260. The bill was just received,

andthere is no liability recorded.

Use the following cash payments journal to record the preceding transactions.

Cash Payments Journal Page 8

Date

Ck. No.

Account Debited

Post. Ref.

Other Accounts DR

Accounts Payable DR

Merchandise Inventory CR

Cash CR

2018

Short Answer

Expert verified

Total Cash payment:$3,085

Step by step solution

01

Cash Payment Journal

A cash payment journal is used to record all cash payment-related transactions. Cash payments may be related to the payment to creditors, expenses, or other cash purchases. Cash payments also include payments by check.

02

Posting to cash payment journal

Cash Payments Journal Page 8

Date

Ck. No.

Account Debited

Post. Ref.

Other Accounts DR

Accounts Payable DR

Merchandise Inventory CR

Cash CR

2018

Jan 5

430

Equipment

$1,700

$1,700

7

431

Merchandise Inventory

450

450

18

432

Kat Co.

$775

$100

675

28

433

Utilities

260

260

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Most popular questions from this chapter

Let鈥檚 examine a case using Greg鈥檚 Tunes and Sal鈥檚 Silly Songs. It is now the end of the first year of operations, and the stockholders want to know how well each business came out at the end of the year. Neither business kept complete accounting records, and no dividends were paid. The businesses throw together the data shown on the next page at year-end: \( 23,000 8,000 35,000 22,000 \) 10,000 6,000 44,000 9,000 Total Assets Common Stock Total Revenues Total Expenses Greg鈥檚 Tunes: Sal鈥檚 Silly Songs: Total Liabilities Common Stock Total Expenses Net Income To gain information for evaluating the businesses, the stockholders ask you several questions. For each answer, you must show your work to convince the stockholders that you know what you are talking about. Requirements 3. Which business has more stockholders鈥� equity at the end of the year?

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Canyon Canoe Company is a service-based company that rents canoes for use on local lakes and rivers. Amber and Zack Wilson graduated from college about 10 years ago. They both worked for one of the 鈥淏ig Four鈥� accounting firms and became CPAs. Because they both love the outdoors, they decided to begin a new business that will combine their love of outdoor activities with their business knowledge. Amber and Zack decide that they will create a new corporation, Canyon Canoe Company, or CCC for short. The business began operations on November 1, 2018. Nov. 1 Received \(16,000 cash to begin the company and issued common stock to Amber and Zack. 2 Signed a lease for a building and paid \)1,200 for the first month鈥檚 rent. 3 Purchased canoes for \(4,800 on account. 4 Purchased office supplies on account, \)750. 7 Earned \(1,400 cash for rental of canoes. 13 Paid \)1,500 cash for wages. 15 Paid \(50 dividends to stockholders. 16 Received a bill for \)150 for utilities. (Use separate payable account.) 20 Received a bill for \(175 for cell phone expenses. (Use separate payable account.) 22 Rented canoes to Early Start Daycare on account, \)3,000. 26 Paid \(1,000 on account related to the November 3, 2018, purchase. 28 Received \)750 from Early Start Daycare for canoe rental on November 22, 2018. 30 Paid $100 dividends to stockholders. Requirements 4. Prepare the balance sheet as of November 30, 2018.

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