Oct.
16. Issued Check No. 1 in payment of rent for the remainder of October, $7,000.
16. Purchased field equipment on account from Petro Services Inc., $32,600.
Oct.
17. Purchased field supplies on account from Midland Supply Co., $9,780.
18. Issued Check No. 2 in payment of field supplies, $4,570, and office supplies, $650.
20. Purchased office supplies on account from A-One Office Supply Co., $1,320.
Post the journals to the accounts payable subsidiary ledger.
24. Issued Check No. 3 to Petro Services Inc., in payment of October 16 invoice.
26. Issued Check No. 4 to Midland Supply Co. in payment of October 17 invoice.
28. Issued Check No. 5 to purchase land, $240,000.
28. Purchased office supplies on account from A-One Office Supply Co., $3,670.
Post the journals to the accounts payable subsidiary ledger.
30. Purchased the following from Petro Services Inc. on account: field supplies, $25,300 and office equipment, $5,500.
30. Issued Check No. 6 to A-One Office Supply Co. in payment of October 20 invoice.
30. Purchased field supplies on account from Midland Supply Co., $12,450.
31. Issued Check No. 7 in payment of salaries, $32,000.
31. Rented building for one year in exchange for field equipment having a cost of $15,000.
Post the journals to the accounts payable subsidiary ledger.
Instructions
1. Journalize the transactions for October. Use a purchases journal and a cash payments journal similar to those illustrated in this chapter and a two-column general journal. Set debit columns for Field Supplies, Office Supplies, and Other Accounts in the purchases journal. Refer to the following partial chart of accounts:
11 Cash
18 Office Equipment
14 Field Supplies
19 Land
15 Office Supplies
21 Accounts Payable
16 Prepaid Rent
61 Salary Expense
17 Field Equipment
71 Rent Expense
At the points indicated in the narrative of transactions, post to the following subsidiary accounts in the accounts payable ledger:
A-One Office Supply Co.
Midland Supply Co.
Petro Services Inc.
2. Post the individual entries (Other Accounts columns of the purchases journal and the cash payments journal; 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. Sum the balances of the accounts payable creditor balances.
5. Why might West Texas consider using a subsidiary ledger for the field equipment?
Answer:
1., 2., and 3.
Page 1
169 32,600 Field Equipment 17 32,600
179 9,780 9,780
209 1,320 1,320
289 3,670 3,670
30 Petro Services Inc. 9 30,800 25,300 Office Equipment 18 5,500
309 12,450 12,450
3190,620 47,530 4,99038,100
(21) (14) (15)(9)
1. and 2.
Page 1
Oct. 31 Prepaid Rent16 15,000
Field Equipment17 15,000
1., 2., and 3.
Page 1
Oct. 16 1 Rent Expense 717,000
18 2 Field Supplies 144,570
Office Supplies 15650
24 3 Petro Services Inc. 32,600 32,600
26 4 Midland Supply Co. 9,780 9,780
28 5 Land 19 240,000
30 6 A-One Office Supply Co. 1,320 1,320
31 7 Salary Expense 61 32,000
3143,700 327,920
(21) (11)
1.
Post.
Item Ref. Debit Credit Balance
Oct. 20 P1 1,320 1,320
28 P1 3,670 4,990
30 CP1 1,320 3,670
Post.
Item Ref. Debit Credit Balance
Oct. 17 P1 9,780 9,780
26 CP1 9,780 —
30 P1 12,450 12,450
Post.
Item Ref. Debit Credit Balance
Oct. 16 P1 32,600 32,600
24 CP1 32,600 —
30 P1 30,800 30,800
2. and 3.
Account No. 11
Post.
Item Ref. Debit Credit Debit Credit
31 CP1 327,920 327,920
Account No. 14
Post.
Item Ref. Debit Credit Debit Credit
18 CP1 4,570 4,570
31 P1 47,530 52,100
Account No. 15
Post.
Item Ref. Debit Credit Debit Credit
18 CP1 650 650
31 P1 4,990 5,640
Account No. 16
Post.
Item Ref. Debit Credit Debit Credit
31 J1 15,000 15,000
Account No. 17
Post.
Item Ref. Debit Credit Debit Credit
16 P1 32,600 32,600
31 J1 15,000 17,600
Account No. 18
Post.
Item Ref. Debit Credit Debit Credit
31 P1 5,500 5,500
Item Ref. Debit Credit Debit Credit
28 CP1 240,000 240,000
Item Ref. Debit Credit Debit Credit
31 P1 90,620 90,620
31 CP1 43,70046,920
Item Ref. Debit Credit Debit Credit
31 CP1 32,000 32,000
Item Ref. Debit Credit Debit Credit
16 CP1 7,000 7,000
4.
A-One Office Supply Co.$ 3,670
Midland Supply Co.12,450
Petro Services Inc. 30,800
Total accounts payable*$46,920
* 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 piece of equipment with respect to cost, location, useful life, and other
data. Such information would be useful for safeguarding equipment and
determining depreciation.
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