Fundamental Accounting Principles
Fundamental Accounting Principles
24th Edition
ISBN: 9781260158595
Author: Wild
Publisher: MCG
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Chapter 7, Problem 3BPSB
To determine

Concept Introduction:

General Journal:

The transactions which are not recorded in the sales, purchase, cash receipt and cash payment journals are recorded in the general journal.

Purchase Journal:

The journal where all the credit purchases are recorded is termed as purchase journal.

Cash Payment Journal:

Cash payment journal shows all the cash payment made by the business organization.

Requirement 1:

To Prepare:

Prepare general journal, purchase journal, and cash payments journal.

Expert Solution
Check Mark

Answer to Problem 3BPSB

    Journal NameTransactions took place
    Purchase Journal
    Accounts payable, Inventory , Office supplies and Other accounts
    Cash payments Journal
    Cash, Inventory, Other accounts and Accounts payable

Explanation of Solution

    General Journal
    Date
    Accounts
    Debit
    Credit
    July 8
    Accounts Payable − Plaine, Inc.
    $250
    Store Supplies
    $250
    24
    Accounts Payable −Drake Company
    2,400
    Inventory
    2,400

    Purchase Journal
    Page 3
    Date
    Account
    Terms
    Accounts Payable Cr.
    Inventory Dr.
    Office Supplies Dr.
    Other Accounts Dr.
    July 1
    Teton Company
    2/10,n/30
    $6,500
    $6,500
    7
    Plaine, Inc.
    n/30
    1,250
    $1,250
    9
    Charm's Supply
    n/30
    38,220
    $38,220
    17
    Drake Company
    2/10,n/30
    7,200
    7,200
    20
    Charm's Supply
    n/30
    650
    650
    26
    Teton Company
    2/10,n/30
    9,770
    9,770
    30
    Total
    63,590
    23,470
    650
    39,470
    Cash Payment Journal Page 3
    Date
    Ck. No.
    Payee
    Account Debited
    Cash Cr.
    Inventory Cr.
    Other Accounts Dr.
    Accounts Payable Dr.
    July 3
    300
    The Weekly
    Advertising Expense
    $625
    $625
    10
    301
    Teton Company
    Teton Company
    6,370
    $130
    $6,500
    15
    302
    Payroll
    Sales Salaries Expense
    31,850
    31,850
    27
    303
    Drake Company
    Drake Company
    4,704
    96
    4,800
    31
    304
    Payroll
    Sales Salaries Expense
    31,850
    31,850
    31
    Total
    77,799
    226
    64,325
    13,700
To determine

Concept Introduction:

General Ledger:

The grouping of similar nature transactions of a business that helps to prepare the financialstatement is known as General ledger.

Subsidiary Ledger:

It is the supporting ledger for preparing the general ledger that gives detailed information.

Requirement 2:

To Prepare:

Open all the general ledger accounts concerned with the transactions which occurred in the month of April and also prepare all the accounts payable subsidiary ledger accounts?

Expert Solution
Check Mark

Answer to Problem 3BPSB

    Account NameBalance
    Cash
    $ 24,601
    Office supplies
    $ 650
    Inventory
    $ 220,844
    Store supplies
    $ 1,000
    Store equipment
    $ $38,220
    Accounts Payable
    $ 54,440
    Long-Term Notes Payable
    $ 200,000
    R. Acorn, Capital
    $ 100,000
    Sales Salaries Expense
    $ 63,700
    Advertising Expense
    $ 625

Explanation of Solution

General Ledger Accounts

    Cash
    Date
    Debit
    Credit
    Balance
    July 1
    $100,000
    3
    $625
    99,375
    10
    6,370
    93,005
    15
    31,850
    61,155
    27
    4,704
    56,451
    31
    31,850
    24,601
    Inventory
    Date
    Debit
    Credit
    Balance
    July 1
    $200,000
    1
    $6,500
    206,500
    10
    $130
    206,370
    17
    7,200
    213,570
    24
    2,400
    211,170
    26
    9,770
    220,940
    27
    96
    220,844
    Office Supplies
    Date
    Debit
    Credit
    Balance
    July 20
    $650
    $650
    Store Supplies
    Date
    Debit
    Credit
    Balance
    July 7
    $1,250
    $1,250
    8
    250
    1,000
    Store Equipment
    Date
    Debit
    Credit
    Balance
    July 9
    $38,220
    $38,220
    Accounts Payable
    Date
    Debit
    Credit
    Balance
    July 1
    $6,500
    $6,500
    7
    1,250
    7,750
    8
    $250
    7,500
    9
    38,220
    45,720
    10
    6,500
    39,220
    17
    7,200
    46,420
    20
    650
    47,070
    24
    2,400
    44,670
    26
    9,770
    54,440
    27
    4,800
    49,640
    Long-Term Notes Payable
    Date
    Debit
    Credit
    Balance
    July 1
    $200,000
    R. Acorn, Capital
    Date
    Debit
    Credit
    Balance
    July 1
    $100,000
    Sales Salaries Expense
    Date
    Debit
    Credit
    Balance
    July 15
    $31,850
    $31,850
    31
    31,850
    63,700
    Advertising Expense
    Date
    Debit
    Credit
    Balance
    July 3
    $625
    $625

Accounts Payable Subsidiary Ledger Accounts

    Teton Company
    Date
    Debit
    Credit
    Balance
    July 1
    $6,500
    $6,500
    10
    $6,500
    0
    26
    9,770
    9,770
    Plaine Inc.
    Date
    Debit
    Credit
    Balance
    July 7
    $1,250
    $1,250
    8
    $250
    1,000
    Charm's Supply
    Date
    Debit
    Credit
    Balance
    July 9
    $38,220
    $38,220
    20
    650
    38,870
    Drake Company
    Date
    Debit
    Credit
    Balance
    July 17
    $7,200
    $7,200
    24
    $2,400
    4,800
    27
    4,800
    0
To determine

Concept Introduction:

Journal:

The recording of financial transactions are known as Journal .

Requirement 3:

To Verify:

Verify that amounts that should be posted as individual amounts from the journals have been posted.

Expert Solution
Check Mark

Explanation of Solution

General Ledger Accounts

    Cash
    Date
    Debit
    Credit
    Balance
    July 1
    $100,000
    3
    $625
    99,375
    10
    6,370
    93,005
    15
    31,850
    61,155
    27
    4,704
    56,451
    31
    31,850
    24,601
    Inventory
    Date
    Debit
    Credit
    Balance
    July 1
    $200,000
    1
    $6,500
    206,500
    10
    $130
    206,370
    17
    7,200
    213,570
    24
    2,400
    211,170
    26
    9,770
    220,940
    27
    96
    220,844
    Office Supplies
    Date
    Debit
    Credit
    Balance
    July 20
    $650
    $650
    Store Supplies
    Date
    Debit
    Credit
    Balance
    July 7
    $1,250
    $1,250
    8
    250
    1,000
    Store Equipment
    Date
    Debit
    Credit
    Balance
    July 9
    $38,220
    $38,220
    Accounts Payable
    Date
    Debit
    Credit
    Balance
    July 1
    $6,500
    $6,500
    7
    1,250
    7,750
    8
    $250
    7,500
    9
    38,220
    45,720
    10
    6,500
    39,220
    17
    7,200
    46,420
    20
    650
    47,070
    24
    2,400
    44,670
    26
    9,770
    54,440
    27
    4,800
    49,640
    Long-Term Notes Payable
    Date
    Debit
    Credit
    Balance
    July 1
    $200,000
    R. Acorn, Capital
    Date
    Debit
    Credit
    Balance
    July 1
    $100,000
    Sales Salaries Expense
    Date
    Debit
    Credit
    Balance
    July 15
    $31,850
    $31,850
    31
    31,850
    63,700
    Advertising Expense
    Date
    Debit
    Credit
    Balance
    July 3
    $625
    $625

Accounts Payable Subsidiary Ledger Accounts

    Teton Company
    Date
    Debit
    Credit
    Balance
    July 1
    $6,500
    $6,500
    10
    $6,500
    0
    26
    9,770
    9,770
    Plaine Inc.
    Date
    Debit
    Credit
    Balance
    July 7
    $1,250
    $1,250
    8
    $250
    1,000
    Charm's Supply
    Date
    Debit
    Credit
    Balance
    July 9
    $38,220
    $38,220
    20
    650
    38,870
    Drake Company
    Date
    Debit
    Credit
    Balance
    July 17
    $7,200
    $7,200
    24
    $2,400
    4,800
    27
    4,800
    0
To determine

Concept Introduction:

Trial Balance:

The listing of all accounts in debits and credits is known as Trial balance.

Requirement 4:

To Prepare:

(a) Prepare a trial balance of the general ledger.

(b) Prove the accuracy of the subsidiary ledgers by preparing schedule of accounts payable

Expert Solution
Check Mark

Answer to Problem 3BPSB

    Account Names Totals
    Trial balance
    $ $349,640
    Accounts Payable
    $ 49,640

Explanation of Solution

Trial Balance

    ACORN INDUSTRIES
    Trial Balance
    July 31
    Accounts
    Debit
    Credit
    Cash
    $24,601
    Inventory
    220,844
    Office Supplies
    650
    Store Supplies
    1,000
    Store Equipment
    $38,220
    Accounts Payable
    $49,640
    Long-Term Notes Payable
    200,000
    R. Acorn, Capital
    100,000
    Sales Salaries Expense
    63,700
    Advertising Expense
    625
    Total
    $349,640
    $349,640

Schedule of Accounts Payable

    ACORN INDUSTRIES
    Schedule of Accounts Payable
    July 31
    Teton Company
    $9,770
    Plaine Inc.
    1,000
    Charm'sSupply
    38,870
    Total Accounts Payable
    49,640

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Chapter 7 Solutions

Fundamental Accounting Principles

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