Purchased pet supplies from Best Friend Supplies Inc. on account, $230. 1 answer below »

EX 5-18 Purchases and cash payments journals

Happy Tails Inc. has a September 1 accounts payable balance of $525, which consists of $340 due Labradore Inc. and $185 due Meow Mart Inc. Transactions related to purchases and cash payments completed by Happy Tails Inc. during the month of September 2012 are as follows:

Sept. 4.

Purchased pet supplies from Best Friend Supplies Inc. on account, $230.

6.

Issued Check No. 345 to Labradore Inc. in payment of account, $340.

13.

Purchased pet supplies from Poodle Pals Inc., $660.

18.

Issued Check No. 346 to Meow Mart Inc. in payment of account, $185.

19.

Purchased office equipment from Office Helper Inc. on account, $2,250.

23.

Issued Check No. 347 to Best Friend Supplies Inc. in payment of account from purchase made on September 4.

27.

Purchased pet supplies from Meow Mart Inc. on account, $350.

30.

Issued Check No. 348 to Sanders Inc. for cleaning expenses, $50.

a. Prepare a purchases journal and a cash payments journal to record these transactions. The forms of the journals are similar to those used in the text. Place a check mark (v) in the Post. Ref. column to indicate when the accounts payable subsidiary ledger should be posted. Happy Tails Inc. uses the following accounts:

Cash

11

Office Equipment

13

Pet Supplies

14

Accounts Payable

21

Cleaning Expense

54

b. Prepare a listing of accounts payable subsidiary ledger balances on September 30, 2012. Verify that the total of the accounts payable subsidiary ledger balances equals the balance of the accounts payable control account on September 30, 2012.

c. Why does Happy Tails use a subsidiary ledger for accounts payable?

Error in accounts payable ledger and accounts payable subsidiary ledger

After Gold Rush Assay Services Inc. had completed all postings for March in the current year (2012), the sum of the balances in the following accounts payable ledger did not agree with the $37,900 balance of the controlling account in the general ledger.

NAME

C. D. Greer and Son

ADDRESS

972 S. Tenth Street

Date

Item

Post Ref.

Debit

Credit

Balance

2012

Mar. 17

P30

3,750

3,750

27

P31

12,000

15,750

NAME

Chester Chemical Supplies Inc.

ADDRESS

1170 Mattis Avenue

Date

Item

Post Ref.

Debit

Credit

Balance

2012

Mar. 1

Balance

(v)

8,300

9

P30

6,200

14,000

12

J7

300

13,700

20

CP23

5,800

7,900

NAME

Cutler and Powell

ADDRESS

717 Elm Street

Date

Item

Post Ref.

Debit

Credit

Balance

2012

Mar. 1

Balance

(v)

6,100

18

CP23

6,100

29

P31

7,800

7,800

NAME

Montana Minerals Co.

ADDRESS

1240 W. Main Street

Date

Item

Post Ref.

Debit

Credit

Balance

2012

Mar. 1

Balance

(v)

4,750

10

CP22

4,750

17

P30

3,700

3,700

25

J7

900

1,800

NAME

Valley Power

ADDRESS

915 E. Walnut Street

Date

Item

Post Ref.

Debit

Credit

Balance

2012

Mar. 5

P30

3,150

3,150

Assuming that the controlling account balance of $37,900 has been verified as correct, (a) determine the error(s) in the preceding accounts and (b) prepare a listing of accounts payable subsidiary ledger balances (from the corrected accounts payable subsidiary ledger).