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Chapter 1: AB-8SE (page 34)

Recording transactions in a purchases journal

Oct. 1 Purchased merchandise inventory on account with credit terms of 4/10,n/30 from Mayer Co., \(2,200.

11 Purchased office supplies on account from Bird Co., \)600. Terms were n/EOM.

24 Purchased furniture on account with credit terms of 3/10, n/60 from SillyCo., $900.

Use the following purchases journal to record the preceding transactions.

Purchase Journal Page 6

Other Accounts DR

Date

Vendor Account Credited

Terms

Post. Ref.

Accounts Payable CR

Merchandise Inventory DR

Office Supplies DR

Account Title

Post. Ref.

Amount

2018

Short Answer

Expert verified

Total amount payable to the creditors is$3,700.

Step by step solution

01

Purchase Journal

A purchase journal is a special-purpose book for recording all types of purchases on account. A business may purchase several things like merchandise, office supplies, furniture, building, equipment, etc. When these items are purchased on the account then the transactions are recorded in the purchase journal.

02

Transaction recording in the purchase journal

Purchase Journal Page 6

Other Accounts DR

Date

Vendor Account Credited

Terms

Post. Ref.

Accounts Payable CR

Merchandise Inventory DR

Office Supplies DR

Account Title

Post. Ref.

Amount

2018

Oct 1

Mayer Co.

4/10, n/30

$2,200

$2,200

11

Bird Co.

n/EOM

$600

$600

24

Silly Co.

3/10, n/60

$900

Furniture

$900

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Most popular questions from this chapter

Identifying users of accounting information

For each of the users of accounting information, identify whether the user is an external decision maker (E) or an internal decision maker (I):

a. customer

b. company manager

c. Internal Revenue Service

d. lender

e. investor

f. controller

g. cost accountant

h. SEC

Michael McNamee is the proprietor of a property management company,Apartment Exchange, near the campus of Pensacola State College. The business has cash of \(8,000 and furniture that cost \)9,000 and has a marketvalue of \(13,000. The business debts include accounts payable of \)6,000. Michael's personal home is valued at \(400,000, and his personal bank accounthas a balance of \)1,200. Consider the accounting principles and assumptionsdiscussed in the chapter, and identify the principle or assumption that best matches the situation:

a. Michael's personal assets are not recorded on the Apartment Exchange's

balance sheet.

b. The Apartment Exchange records furniture at its cost of \(9,000, not its market

value of \)13,000.

c. The Apartment Exchange reports its financial statements in U.S. dollars.

d. Michael expects the Apartment Exchange to remain in operation for the

foreseeable future

Presented here are the accounts of Pembroke Bookkeeping Company for the year ended December 31, 2018: Land \( 10,000 Common Stock \) 29,000 Notes Payable 31,000 Accounts Payable 7,000 Property Tax Expense 3,100 Accounts Receivable 1,200 Dividends 28,000 Advertising Expense 12,000 Rent Expense 7,000 Building 147,400 Salaries Expense 64,000 Cash 2,800 Salaries Payable 800 Equipment 15,000 Service Revenue 192,000 Insurance Expense 1,700 Office Supplies 12,000 Interest Expense 6,600 Retained Earnings, Dec. 31, 2017 51,000 Requirements 1. Prepare Pembroke Bookkeeping Company鈥檚 income statement. 2. Prepare the statement of retained earnings. 3. Prepare the balance sheet.

Using the following information, calculate the return on assets. Net income for November, 2018 $ 5,000 Total assets, November 1, 2018 76,000 Total assets, November 30, 2018 80,250

Prepare the balance sheet for Damon Design Studio as of December 31, 2018
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