Question

Office Plus is a retail business that sells office equipment, furniture, and supplies. Its credit purchases and purchases returns and allowances for September are shown below. The general ledger accounts and the creditors’ accounts in the accounts payable subsidiary ledger used to record these transactions are also provided. All balances shown are for the beginning of September.

GENERAL LEDGER ACCOUNTS
205	Accounts Payable, $28,296 Cr.
501	Purchases
502	Freight In
503	Purchases Returns and Allowances

Creditors
Name	Terms			Balance
Apex Office Machines, Inc.		n/60		$	11,000
Brown Paper Company		1/10, n/30			2,160
Dalton Office Furniture Company		n/30			9,616
Davis Corporation		n/30
Zenn Furniture, Inc.		2/10, n/30			5,520

DATE		TRANSACTIONS
Sept.	3	Purchased desks for $7,960 plus a freight charge of $216 from Dalton Office Furniture Company, Invoice 4213, dated August 29; the terms are 30 days net.
	7	Purchased computers for $11,700 from Apex Office Machines, Inc., Invoice 9217, dated September 2, net due and payable in 60 days.
	10	Received Credit Memorandum 511 for $640 from Dalton Office Furniture Company; the amount is an allowance for damaged but usable desks purchased on Invoice 4213, dated August 29.
	16	Purchased file cabinets for $2,596 plus a freight charge of $128 from Davis Corporation, Invoice 8066, dated September 11; the terms are 30 days net.
	20	Purchased electronic desk calculators for $1,100 from Apex Office Machines, Inc., Invoice 11011, dated September 15, net due and payable in 60 days.
	23	Purchased bond paper and copy machine paper for $7,900 plus a freight charge of $100 from Brown Paper Company, Invoice 6498, dated September 18; the terms are 1/10, n/30.
	28	Received Credit Memorandum 312 for $920 from Apex Office Machines, Inc., for defective calculators that were returned; the calculators were originally purchased on Invoice 11011, dated September 15.
	30	Purchased office chairs for $3,880 plus a freight charge of $164 from Zenn Furniture, Inc., Invoice 696, dated September 25, the terms are 2/10, n/30.

Required:

Open the general ledger accounts and enter the balance of Accounts Payable for September 1, 2019.

Open the creditors’ accounts in the accounts payable subsidiary ledger and enter the balances for September 1.

Record the transactions in a three-column purchases journal and in a general journal.

Post to the accounts payable subsidiary ledger daily.

Post the entries from the general journal to the proper general ledger accounts at the end of the month.

Total and rule the purchases journal as of September 30.

Post the column totals from the purchases journal to the proper general ledger accounts.

Prepare a schedule of accounts payable and compare the balance of the Accounts Payable control account with the schedule of accounts payable.

Analyze:
What total amount was recorded for purchases returns and allowances in the month of September? What percentage of total purchases does this represent?

Answer 1

Requirement 1	Open the general ledger accounts
Accounts payable		Account No. 205			Purchases		Account No. 501
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
1-Sep-19		$28,296	$28,296
Freight In		Account No. 502			Purchases Returns and Allowances		Account No. 503
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance

Requirement 2	Creditor account in accounts payable subsidiary ledger
	Creditor: Apex office machine Inc.
Date	Particulars/Description	Debit	Credit	Balance
1-Sep	Opening Balance		$11,000	$11,000
	Creditor: Brown Paper Company
Date	Particulars/Description	Debit	Credit	Balance
1-Sep	Opening Balance		$2,160	$2,160
	Creditor: Delton office Furniture Company
Date	Particulars/Description	Debit	Credit	Balance
1-Sep	Opening Balance		$9,616	$9,616
	Creditor: Zenn. Furniture Inc.
Date	Particulars/Description	Debit	Credit	Balance
1-Sep	Opening Balance		$5,520	$5,520
Requirement 3	Purchase Journal
Date	Purchased From	Invoice No.	Date of Invoice	Terms	Accounts payable Credit	Purchases Debit	Freight In Debit
3-Sep	Dalton Office Furniture Company	4213	29-Aug	30 days net	$8,176	$7,960	$216
7-Sep	Apex Office Machine, Inc.	9217	2-Sep	60 days net	$11,700	$11,700
16-Sep	Davis Corporation	8066	11-Sep	30 days net	$2,724	$2,596	$128
20-Sep	Apex Office Machine, Inc.	11011	15-Sep	60 days net	$1,100	$1,100
23-Sep	Brown Paper company	6498	18-Sep	1/10, n/30	$8,000	$7,900	$100
30-Sep	Zenn Furniture, Inc.	696	25-Sep	2/10, n/30.	$4,044	$3,880	$164
30-Jun	Totals				$35,744	$35,136	$608
	General Journal
10-Sep	Accounts payable	$640
	Purchases returns and allowances		$640
28-Sep	Accounts payable	$920
	Purchases returns and allowances		$920
Requirement 4	Creditor account in accounts payable subsidiary ledger
	Creditor: Apex office machine Inc.
Date	Particulars/Description	Debit	Credit	Balance
1-Sep	Opening Balance		$11,000	$11,000
7-Sep	Purchase		$11,700	$22,700
20-Sep	Purchase		$1,100	$23,800
28-Sep	Purchase return	$920		$22,880
	Creditor: Brown Paper Company
Date	Particulars/Description	Debit	Credit	Balance
1-Sep	Opening Balance		$2,160	$2,160
23-Sep	Purchase		$8,000	$10,160
	Creditor: Dalton office Furniture Company
Date	Particulars/Description	Debit	Credit	Balance
1-Sep	Opening Balance		$9,616	$9,616
3-Sep	Purchase		$8,176	$17,792
10-Sep	Purchase allowance	$640		$17,152
	Creditor: Zenn. Furniture Inc.
Date	Particulars/Description	Debit	Credit	Balance
1-Sep	Opening Balance		$5,520	$5,520
30-Sep	Purchase		$4,044	$9,564
	Creditor: Davis Corporation.
Date	Particulars/Description	Debit	Credit	Balance
1-Sep	Opening Balance		$0	$0
16-Sep	Purchase		$2,724	$2,724

Requirement 5	Post entries from general journal to general ledger accounts
Accounts payable		Account No. 205			Purchases Returns and Allowances		Account No. 503
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
1-Sep-19		$28,296	$28,296		10-Sep-19		$640	$640
10-Sep-19	$640		$27,656		28-Sep-19		$920	$1,560
28-Sep-19	$920		$26,736
			$26,736
			$26,736
Requirement 7	Post the column totals from purchase journal to general ledger accounts
Accounts payable		Account No. 205			Purchases		Account No. 501
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
1-Sep-19		$28,296	$28,296		30-Sep-19	$35,136		$35,136
10-Sep-19	$640		$27,656
28-Sep-19	$920		$26,736
30-Sep-19		$35,744	$62,480
			$62,480
Freight In		Account No. 502
Date	Debit	Credit	Balance
30-Sep-19	$608		$608

Requirement 8	Schedule of accounts payable
	Creditors	Amount
	Apex Office Machine, Inc.	$22,880
	Brown Paper company	$10,160
	Dalton Office Furniture Company	$17,152
	Davis Corporation	$2,724
	Zenn Furniture, Inc.	$9,564
	Total	$62,480
Requirement 9	Total Purchases	$35,136
	Purchase return	$1,560
	Percent	4%