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