Happy Tails Inc. has a September 1, 20Y4, accounts payable balance of $620, which consists of $320 due Labradore Inc. and $300 due Meow Mart Inc

Happy Tails Inc. has a September 1, 20Y4, accounts payable balance of $620, which consists of $320 due Labradore Inc. and $300 due Meow Mart Inc. Transactions related to purchases and cash payments completed by Happy Tails Inc. during the month of September 20Y4 are as follows:

Sept. 

4. Purchased pet supplies from Best Friend Supplies Inc. on account, $295.

6. Issued Check No. 345 to Labradore Inc. in payment of account, $320.

13. Purchased pet supplies from Poodle Pals Inc. on account, $790.

18. Issued Check No. 346 to Meow Mart Inc. in payment of account, $300.

19. Purchased office equipment from Office Helper Inc. on account, $2,510.

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, $450.

30. Issued Check No. 348 to Jennings Inc. for cleaning expenses, $80.

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 (✓) 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

Pet Supplies 14

Office Equipment 18

Accounts Payable 21

Cleaning Expense 54

b. Prepare a listing of accounts payable creditor balances on September 30, 20Y4. Verify that the total of the accounts payable creditor balances equals the balance of the accounts payable controlling account on September 30, 20Y4.

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

Answer:

a.

 20Y4

 Sept. 49

139

19918 2,510

279

302,510

Page 22

 20Y4

 Sept. 6 345 Labradore Inc. 9 320

18 346 Meow Mart Inc. 9 300

23 347 Best Friend Supplies Inc. 9 295

30 348 Cleaning Expense 5480

30995

(11)

b.

Meow Mart Inc.$ 450

Poodle Pals Inc.790

Office Helper Inc. 2,510

Total accounts payable$3,750

The total of the creditor accounts on September 30, 20Y4, $3,750, equals the 

balance of the accounts payable controlling account, shown as follows:

Sept. 30 915  Sept. 1 Bal.

c. Happy Tails Inc. uses a subsidiary ledger for accounts payable to track its credit 

purchases and payments to the individual supplier. This is needed so that it knows

how much it owes to each individual supplier. Without the subsidiary ledger, Happy 

Tails Inc. would have difficulty accurately paying suppliers for the amount owed in a

timely manner.