Question

Big Country Ski Shop is a retail store that sells ski equipment and clothing. Big Country Ski Shop commenced business on September 1, 2019. The firm purchases merchandise on open account. The firm’s purchases, purchase returns and allowances, and cash payments on account during September 2019 follow:

DATE		TRANSACTIONS
2019
Sept.	2	Purchased ski boots for $5,200 plus a freight charge of $250 from Colorado Ski Shop, Invoice 6672, terms n/30.
	3	Purchased skis for $10,800 from Alaska Supply Company, Invoice 5916; terms 2/10, n/30.
	7	Received Credit Memorandum 165 for $860 from Colorado Ski Shop for return of damaged ski boots; the boots were originally purchased September 2 on Invoice 6672.
	11	Purchased ski jackets for $3,600 from Cold Mountain Clothing Company, Invoice 4091, terms n/30.
	12	Issued Check 104 to Alaska Supply Company in payment of Invoice 5916, dated September 3, less the cash discount.
	22	Purchased ski poles for $3,360 plus a freight charge of $190 from Alaska Supply Company, Invoice 5950, terms 3/10, n/30.
	23	Purchased ski pants for $1,850 from Swenson Ski Goods, Invoice 528, terms n/30.
	25	Received Credit Memorandum 245 for $260 from Swenson Ski Goods for return of defective ski pants; the pants were originally purchased September 23 on Invoice 528.
	27	Purchased ski sweaters for $4,000 plus a freight charge of $170 from Colorado Ski Shop, Invoice 6722, terms n/30.
	30	Issued Check 110 to Colorado Ski Shop in payment of Invoice 6672, dated September 2, less the return of September 7.

Required:

Open the general ledger accounts and accounts payable ledger accounts indicated below. Enter the balance of Cash as of September 1, 2019.

Post the entries from the general journal to the appropriate accounts in the general ledger and in the accounts payable ledger.

Prepare a schedule of accounts payable.

GENERAL LEDGER ACCOUNTS

101	Cash, $25,000 Dr.
201	Accounts Payable
501	Purchases
502	Freight In
503	Purchases Returns and Allowances
504	Purchases Discounts

ACCOUNTS PAYABLE LEDGER ACCOUNTS

Alaska Supply Company
Cold Mountain Clothing Company
Colorado Ski Shop
Swenson Ski Goods

Analyze:
What portion of the purchases in September, before purchases returns and allowances and before purchases discounts, were for clothing items? Include ski boots as a clothing item.

General Ledgers, AP Ledgers, Schedule of AP, Analyze

Answer 1

1. General Ledger

Cash		Account No: 101			Accounts Payable		Account No: 201
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Sept. 1, 2019			25000		Sept. 2, 2019		5450	5450
Sept. 12, 2019		10584	14416		Sept. 3, 2019		10800	16250
Sept. 30, 2019		4590	9826		Sept. 7, 2019	860		15390
					Sept. 11, 2019		3600	18990
					Sept. 12, 2019	10800		8190
					Sept. 22, 2019		3550	11740
					Sept. 23, 2019		1850	13590
					Sept. 25, 2019	260		13330
					Sept. 27, 2019		4170	17500
					Sept. 30, 2019	4590		12910

Purchases		Account No: 501			Freight In		Account No: 502
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Sept. 2, 2019	5200		5200		Sept. 2, 2019	250		250
Sept. 3, 2019	10800		16000		Sept. 22, 2019	190		440
Sept. 11, 2019	3600		19600		Sept. 27, 2019	170		610
Sept. 22, 2019	3360		22960
Sept. 23, 2019	1850		24810
Sept. 27, 2019	4000		28810
Purchase Returns & Allowances		Account No: 503			Purchase Discounts		Account No: 504
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Sept. 7, 2019		860	860		Sept. 12, 2019		216	216
Sept. 25, 2019		260	1120

2. Accounts Payable Ledger

Alaska Supply Company		Terms: 2/10, n/30			Cold Mountain Clothing Company		Terms: n/30
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Sept. 3, 2019		10800	10800		Sept. 11, 2019		3600	3600
Sept. 12, 2019	10800		0
Sept. 22, 2019		3550	3550
Colorado Ski Shop		Terms: n/30			Swenson Ski Goods		Terms: n/30
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Sept. 2, 2019		5450	5450		Sept. 23, 2019		1850	1850
Sept. 7, 2019	860		4590		Sept. 25, 2019	260		1590
Sept. 27, 2019		4170	8760
Sept. 30, 2019	4590		4170

3.

BIG COUNTRY SKI SHOP
Schedule of Accounts Payable
September 30, 2019
Alaska Supply Company	3550
Cold Mountain Clothing Company	3600
Colorado Ski Shop	4170
Swenson Ski Goods	1590
Total	12910

4. Analyze:

Portion of clothing items purchased: $29420

($28810 + $610)