June 16. Issued Check No. 1 in payment of rent for the remainder of June, $2,900.
16. Purchased field supplies on account from Hydro Supply Co., $4,920.
16. Purchased field equipment on account from Pure Aqua Equipment Co., $19,500.
17. Purchased office supplies on account from Best Office Supply Co., $465.
19. Issued Check No. 2 in payment of field supplies, $3,080, and office supplies, $350.
Post the journals to the accounts payable subsidiary ledger.
23. Purchased office supplies on account from Best Office Supply Co., $620.
23. Issued Check No. 3 to purchase land, $120,000.
24. Issued Check No. 4 to Hydro Supply Co. in payment of June 16 invoice, $4,920.
26. Issued Check No. 5 to Pure Aqua Equipment Co. in payment of June 16 invoice, $19,500.
Post the journals to the accounts payable subsidiary ledger.
30. Acquired land in exchange for field equipment having a cost of $10,000.
30. Purchased field supplies on account from Hydro Supply Co., $7,300.
30. Issued Check No. 6 to Best Office Supply Co. in payment of June 17 invoice, $465.
30. Purchased the following from Pure Aqua Equipment Co. on account: field supplies, $1,200, and field equipment, $4,400.
30. Issued Check No. 7 in payment of salaries, $26,800.
Post the journals to the accounts payable subsidiary ledger.
Instructions
1. Journalize the transactions for June. Use a purchases journal and a cash payments journal, similar to those illustrated in this chapter, and a two-column general journal. Use debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:
11 Cash 19 Land
14 Field Supplies 21 Accounts Payable
15 Office Supplies 61 Salary Expense
17 Field Equipment 71 Rent Expense
At the points indicated in the narrative of transactions, post to the following accounts in the accounts payable subsidiary ledger:
Best Office Supply Co.
Hydro Supply Co.
Pure Aqua Equipment Co.
2. Post the individual entries (Other Accounts columns of the purchases journal and the cash payments journal and both columns of the general journal) to the appropriate general ledger accounts.
3. Total each of the columns of the purchases journal and the cash payments journal, and post the appropriate totals to the general ledger. (Because the problem does not include transactions related to cash receipts, the cash account in the ledger will have a credit balance.)
4. Prepare a schedule of the accounts payable creditor balances.
5. Why might Sweetwater consider using a subsidiary ledger for the field equipment?
Answer:
1., 2., and 3.
PURCHASES JOURNAL Page 1
Date Account Credited
Post.
Ref.
Accounts
Payable
Cr.
Field
Supplies
Dr.
Office
Supplies
Dr.
Other
Accounts
Dr.
Post.
Ref. Amount
2014
June 16 Hydro Supply Co. √ 4,920 4,920
16 Pure Aqua Equipment Co. √ 19,500 Field Equipment 17 19,500
17 Best Office Supply Co. √ 465 465
23 Best Office Supply Co. √ 620 620
30 Hydro Supply Co. √ 7,300 7,300
30 Pure Aqua Equipment Co. √ 5,600 1,200 Field Equipment 17 4,400
30 38,405 13,420 1,085 23,900
(21) (14) (15) (√)
CASH PAYMENTS JOURNAL Page 1
Date
Ck.
No. Account Debited
Post.
Ref.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Cash
Cr.
2014
June 16 1 Rent Expense 71 2,900 2,900
19 2 Field Supplies 14 3,080 3,080
Office Supplies 15 350 350
23 3 Land 19 120,000 120,000
24 4 Hydro Supply Co. √ 4,920 4,920
26 5 Pure Aqua Equip. Co. √ 19,500 19,500
30 6 Best Office Supply Co. √ 465 465
30 7 Salary Expense 61 26,800 26,800
30 Total 153,130 24,885 178,015
(√) (21) (11)
1. and 2.
JOURNAL Page 1
Date Description
Post.
Ref. Debit Credit
2014
June 30 Land 19 10,000
Field Equipment 17 10,000
1.
Name:
ACCOUNTS PAYABLE SUBSIDIARY LEDGER
Best Office Supply Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
June 17 P1 465 465
23 P1 620 1,085
30 CP1 465 620
Name: Hydro Supply Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
June 16 P1 4,920 4,920
24 CP1 4,920 —
30 P1 7,300 7,300
Name: Pure Aqua Equipment Co.
Date Item
Post.
Ref. Debit Credit Balance
2014
June 16 P1 19,500 19,500
26 CP1 19,500 —
30 P1 5,600 5,600
2. and 3.
Account: Cash
GENERAL LEDGER
Account No. 11
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 30 CP1 178,015 178,015
Account: Field Supplies Account No. 14
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 19 CP1 3,080 3,080
30 P1 13,420 16,500
Account: Office Supplies Account No. 15
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 19 CP1 350 350
30 P1 1,085 1,435
Account: Field Equipment Account No. 17
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 16 P1 19,500 19,500
30 P1 4,400 23,900
30 J1 10,000 13,900
Account: Land Account No. 19
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 23 CP1 120,000 120,000
30 J1 10,000 130,000
Account: Accounts Payable Account No. 21
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 30 P1 38,405 38,405
30 CP1 24,885 13,520
Account: Salary Expense Account No. 61
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 30 CP1 26,800 26,800
Account: Rent Expense Account No. 71
Date Item
Post.
Ref. Debit Credit
Balance
Debit Credit
2014
June 16 CP1 2,900 2,900
4.
SWEETWATER WATER TESTING SERVICE
Accounts Payable Creditor Balances
June 30, 2014
Best Office Supply Co. $ 620
Hydro Supply Co. 7,300
Pure Aqua Equipment Co. 5,600
Total accounts payable* $13,520
* The total of the schedule of accounts payable is equal to the balance of the accounts
payable control account.
5. A subsidiary ledger for the field equipment would allow the company to track
each individual piece of equipment with respect to cost, location, useful life,
and other data. Such information would be useful for safeguarding equipment
and determining depreciation.