Solution Manual For College Accounting Chapters 1-27-23th by Heintz

Solution Manual for College Accounting, Chapters
1-27, 23th by Heintz
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Solution Manual for College Accounting, Chapters 1-27, 23th by Heintz
CHAPTER 11
ACCOUNTING FOR PURCHASES AND CASH PAYMENTS
REVIEW QUESTIONS
1. The major documents commonly used in the purchasing process are the purchase requisition, the
purchase order, the receiving report, and the purchase invoice.
2. A cash discount is available if the bill is paid within the discount period. A trade discount is a
reduction from the list or catalog price offered by manufacturers and wholesalers to different classes
of customers.
3. A voucher system is a control technique that requires every acquisition and subsequent payment to
be supported by an approved voucher.
4. Voucher
Purchase invoice
Receiving report
Purchase order
Purchase requisition
5. The purchases account is used to record the cost of merchandise purchased. Purchases Returns
and Allowances is a contra-purchases account used to record purchases returns and purchases
allowances. Purchases Discounts is a contra-purchases account used to record cash discounts
allowed on purchases. Freight-In is an adjunct-purchases account used to record transportation
charges on merchandise purchases.
6. The cost of goods sold is the beginning merchandise inventory plus the cost of goods purchased
during the period less ending merchandise inventory. The gross profit is the net sales minus the
cost of goods sold.
7. To post purchases from the general journal to the general ledger:

In the general ledger account:
Step 1: Enter the date of the transaction in the Date column.
Step 2: Enter the amount of the debit or credit in the Debit or Credit column.
Step 3: Enter the new balance in the Balance columns under Debit or Credit.
Step 4: Enter the journal page number from which each transaction is posted in the Posting
Reference column.
In the journal:
Step 5: Enter the ledger account number in the Posting Reference column of the journal for each
transaction that is posted.
8. To post purchases from the general journal to the accounts payable ledger:
In the accounts payable ledger account:
Step 3: Enter the new balance in the Balance column.
Reference column.
395
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396 CHAPTER 11
In the journal:
Step 5: Enter a slash (/) followed by a check mark () in the Posting Reference column of the
journal for each transaction that is posted.
9. To post purchases returns and allowances from the general journal to the general ledger and
accounts payable ledger:
The general ledger is posted using the same five steps as for purchases transactions (Figure 11-10).
To post the accounts payable ledger:

Reference column.
In the journal:
10. To post cash payments from the general journal to the general ledger, use the same five steps as
for posting purchases transactions (Figure 11-10).
11. To post cash payments from the general journal to the accounts payable ledger:
Reference column.
In the journal:
12. To find the error, use the following steps:

Step 1: Verify the total of the schedule.
Step 2: Verify the postings to the accounts payable ledger.
Step 3: Verify the postings to Accounts Payable in the general ledger.
CHAPTER 11 397
Exercise 11-1A
1. Purchase requisition
2. Purchase order
3. Receiving report
4. Purchase invoice
Exercise 11-2A
1.
Gross amount $2,000
Less 10% trade discount 200
Net amount of purchases $1,800
2.
Net amount $1,800
Less 2% discount 36
Net amount to be paid $1,764
3.
GENERAL JOURNAL PAGE
POST.
DATE DESCRIPTION DEBIT CREDIT
REF.
20--
1 May 17 Purchases 1 8 0 0 00 1
2 Accounts Payable/Jacob’s Distributors 1 8 0 0 00 2
3 Purchased merchandise 3
4 4
5 27 Accounts Payable/Jacob’s Distributors 1 8 0 0 00 5
6 Cash 1 7 6 4 00 6
7 Purchases Discounts 3 6 00 7
8 Paid invoice within discount period 8
9 9
10 10
11 11
12 12
13 13
14 14
15 15
398 CHAPTER 11
Exercise 11-3A
1.
Cash Accounts Payable

(a) 1,500
(b) 2,975
Purchases Purchases Returns and Allowances

(a) 1,500
(b) 2,975
Purchases Discounts Freight-In
2.

(c) 1,960 (c) 2,000 (a) 2,000
(d) 1,200 (d) 1,200 (b) 1,200

(a) 2,000
(b) 1,200

(c) 40
CHAPTER 11 399
Exercise 11-3A (Concluded)

3.

(c) 3,430 (b) 500 (a) 4,000
(c) 3,500

(a) 4,000 (b) 500

(c) 70
4.

(b) 2,600 (b) 2,600 (a) 2,600

(a) 2,500

(a) 100
400 CHAPTER 11
Exercise 11-4A
Sales $120,000
Less: Sales returns and allowances $ 900
Sales discounts 650 1,550
Net sales $118,450
Cost of goods sold
Merchandise inventory, Jan. 1 $ 35,000
Purchases $77,600
Less: Purchases returns and allow. $4,100
Purchases discounts 2,300 6,400
Net purchases $71,200
Add freight-in 1,250
Cost of goods purchased 72,450
Goods available for sale $107,450
Less merchandise inventory, Dec. 31 32,000
Cost of goods sold 75,450
Gross profit $ 43,000
CHAPTER 11 401
Exercise 11-5A
POST.
REF.
20--
1 May 3 Purchases 6 1 0 0 00 1
2 Accounts Payable/Reed 6 1 0 0 00 2
3 Invoice No. 321 3
4 4
5 9 Purchases 2 5 0 0 00 5
6 Accounts Payable/Omana 2 5 0 0 00 6
7 Invoice No. 614 7
8 8
9 18 Purchases 2 2 0 0 00 9
10 Accounts Payable/Yao Distributors 2 2 0 0 00 10
11 Invoice No. 180 11
12 12
13 23 Purchases 5 3 0 0 00 13
14 Accounts Payable/Brown 5 3 0 0 00 14
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
33 33
34 34
402 CHAPTER 11
Exercise 11-6A
GENERAL JOURNAL PAGE 3
POST.
REF.
20--
1 July 7 Accounts Payable/Starcraft Industries 202/ 7 0 0 00 1
2 Purchases Returns and Allowances 501.1 7 0 0 00 2
3 Returned merchandise 3
4 4
5 15 Accounts Payable/XYZ, Inc. 202/ 4 5 0 00 5
8 8
9 27 Accounts Payable/Datamagic 202/ 9 0 0 00 9
12 12
GENERAL LEDGER
ACCOUNT Accounts Payable ACCOUNT NO. 202

POST. BALANCE
DATE ITEM DEBIT CREDIT
REF. DEBIT CREDIT
20--
July 1 Balance  10 6 5 0 00
7 J3 7 0 0 00 9 9 5 0 00
15 J3 4 5 0 00 9 5 0 0 00
27 J3 9 0 0 00 8 6 0 0 00
ACCOUNT Purchases Returns and Allowances ACCOUNT NO. 501.1

POST. BALANCE
REF. DEBIT CREDIT
20--
July 7 J3 7 0 0 00 7 0 0 00
15 J3 4 5 0 00 1 1 5 0 00
27 J3 9 0 0 00 2 0 5 0 00
CHAPTER 11 403
Exercise 11-6A (Concluded)
ACCOUNTS PAYABLE LEDGER
NAME Datamagic
ADDRESS
POST.
DATE ITEM DEBIT CREDIT BALANCE
REF.
20--
July 1 Balance  2 6 0 0 00
27 J3 9 0 0 00 1 7 0 0 00
NAME Starcraft Industries

ADDRESS
POST.
REF.
20--
7 J3 7 0 0 00 3 6 0 0 00
NAME XYZ, Inc.

ADDRESS
POST.
REF.
20--
15 J3 4 5 0 00 3 3 0 0 00
404 CHAPTER 11
Exercise 11-7A
POST.
REF.
20--
1 Sept. 5 Accounts Payable/Whittle Corp. 5 0 0 0 00 1
2 Cash 4 9 0 0 00 2
3 Purchases Discounts 1 0 0 00 3
4 Check No. 318 4
5 5
6 12 Accounts Payable/Martin Company 8 1 0 0 00 6
7 Cash 8 0 1 9 00 7
9 Check No. 319 9
10 10
11 19 Accounts Payable/Cloud Systems 6 1 0 0 00 11
12 Cash 6 1 0 0 00 12
13 Check No. 320 13
14 14
15 27 Account Payable/Dynamic Data 7 0 0 0 00 15
16 Cash 6 8 6 0 00 16
18 Check No. 321 18
19 19
20 20
21 21
Exercise 11-8A
Ryan’s Express
Schedule of Accounts Payable
October 31, 20--
Columbia Products $ 5 3 5 0 00
Favorite Fashions 4 2 8 0 00
Rustic Legends 4 7 4 0 00
$14 3 7 0 00
CHAPTER 11 405
Problem 11-9A
1.
POST.
REF.
20--
1 Sept. 3 Purchases 501 2 6 5 0 00 1
2 Accounts Payable/Smith Distributors 202/ 2 6 5 0 00 2
3 Invoice No. 415 3
4 4
5 8 Purchases 501 3 8 3 0 00 5
6 Accounts Payable/Michaels Wholesaler 202/ 3 8 3 0 00 6
7 Invoice No. 132 7
8 8
9 11 Purchases 501 3 1 4 0 00 9
10 Accounts Payable/J. B. Sanders & Co. 202/ 3 1 4 0 00 10
12 12
13 18 Purchases 501 2 2 5 0 00 13
14 Accounts Payable/Bateman & Jones, Inc. 202/ 2 2 5 0 00 14
16 16
17 23 Purchases 501 4 1 6 0 00 17
18 Accounts Payable/Smith Distributors 202/ 4 1 6 0 00 18
20 20
21 27 Purchases 501 1 9 8 0 00 21
22 Accounts Payable/Anderson Company 202/ 1 9 8 0 00 22
24 24
25 30 Purchases 501 2 7 8 0 00 25
26 Accounts Payable/Michaels Wholesaler 202/ 2 7 8 0 00 26
28 28
29 29
30 30
31 31
32 32
33 33
34 34
406 CHAPTER 11
Problem 11-9A (Continued)

2.
GENERAL LEDGER

POST. BALANCE
REF. DEBIT CREDIT
20--
Sept. 3 J16 2 6 5 0 00 2 6 5 0 00
8 J16 3 8 3 0 00 6 4 8 0 00
11 J16 3 1 4 0 00 9 6 2 0 00
18 J16 2 2 5 0 00 11 8 7 0 00
23 J16 4 1 6 0 00 16 0 3 0 00
27 J16 1 9 8 0 00 18 0 1 0 00
30 J16 2 7 8 0 00 20 7 9 0 00
ACCOUNT Purchases ACCOUNT NO. 501

POST. BALANCE
REF. DEBIT CREDIT
20--
Sept. 3 J16 2 6 5 0 00 2 6 5 0 00
8 J16 3 8 3 0 00 6 4 8 0 00
11 J16 3 1 4 0 00 9 6 2 0 00
18 J16 2 2 5 0 00 11 8 7 0 00
23 J16 4 1 6 0 00 16 0 3 0 00
27 J16 1 9 8 0 00 18 0 1 0 00
30 J16 2 7 8 0 00 20 7 9 0 00

NAME Anderson Company
ADDRESS
POST.
REF.
20--
Sept. 27 J16 1 9 8 0 00 1 9 8 0 00
CHAPTER 11 407
Problem 11-9A (Concluded)
NAME Bateman & Jones, Inc.

ADDRESS
POST.
REF.
20--
Sept. 18 J16 2 2 5 0 00 2 2 5 0 00
NAME Michaels Wholesaler

ADDRESS
POST.
REF.
20--
Sept. 8 J16 3 8 3 0 00 3 8 3 0 00
30 J16 2 7 8 0 00 6 6 1 0 00
NAME J. B. Sanders & Co.

ADDRESS
POST.
REF.
20--
Sept. 11 J16 3 1 4 0 00 3 1 4 0 00
NAME Smith Distributors

ADDRESS
POST.
REF.
20--
Sept. 3 J16 2 6 5 0 00 2 6 5 0 00
23 J16 4 1 6 0 00 6 8 1 0 00
408 CHAPTER 11
Problem 11-10A
1.
POST.
REF.
20--
1 May 1 Rent Expense 521 2 4 0 0 00 1
2 Cash 101 2 4 0 0 00 2
3 Check No. 426 3
4 4
5 3 Accounts Payable/Mueller’s Distributors 202/ 3 6 0 0 00 5
6 Cash 101 3 4 9 2 00 6
7 Purchases Discounts 501.2 1 0 8 00 7
8 Check No. 427 8
9 9
10 7 Accounts Payable/Van Kooning 202/ 5 5 0 0 00 10
11 Cash 101 5 5 0 0 00 11
12 Check No. 428 12
13 13
14 12 Accounts Payable/Fantastic Toys 202/ 5 2 0 0 00 14
15 Cash 101 5 1 4 8 00 15
16 Purchases Discounts 501.2 5 2 00 16
17 Check No. 429 17
18 18
19 15 Utilities Expense 533 1 7 2 0 00 19
20 Cash 101 1 7 2 0 00 20
21 Check No. 430 21
22 22
23 18 Purchases 501 4 8 0 0 00 23
24 Cash 101 4 8 0 0 00 24
25 Check No. 431 25
26 26
27 26 Accounts Payable/Goya Outlet 202/ 3 8 0 0 00 27
28 Cash 101 3 7 2 4 00 28
30 Check No. 432 30
31 31
32 30 Freight-In 502 1 2 0 0 00 32
33 Cash 101 1 2 0 0 00 33
34 Check No. 433 34
CHAPTER 11 409

POST.
REF.
20--
1 May 31 Purchases 501 3 0 0 0 00 1
2 Cash 101 3 0 0 0 00 2
3 Check No. 434 3
4 4
5 5
2.
GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 101

POST. BALANCE
REF. DEBIT CREDIT
20--
May 1 Balance  40 0 0 0 00
1 J9 2 4 0 0 00 37 6 0 0 00
3 J9 3 4 9 2 00 34 1 0 8 00
7 J9 5 5 0 0 00 28 6 0 8 00
12 J9 5 1 4 8 00 23 4 6 0 00
15 J9 1 7 2 0 00 21 7 4 0 00
18 J9 4 8 0 0 00 16 9 4 0 00
26 J9 3 7 2 4 00 13 2 1 6 00
30 J9 1 2 0 0 00 12 0 1 6 00
31 J10 3 0 0 0 00 9 0 1 6 00

POST. BALANCE
REF. DEBIT CREDIT
20--
May 1 Balance  20 0 0 0 00
3 J9 3 6 0 0 00 16 4 0 0 00
7 J9 5 5 0 0 00 10 9 0 0 00
12 J9 5 2 0 0 00 5 7 0 0 00
26 J9 3 8 0 0 00 1 9 0 0 00
410 CHAPTER 11

POST. BALANCE
REF. DEBIT CREDIT
20--
May 18 J9 4 8 0 0 00 4 8 0 0 00
31 J10 3 0 0 0 00 7 8 0 0 00
ACCOUNT Purchases Discounts ACCOUNT NO. 501.2

POST. BALANCE
REF. DEBIT CREDIT
20--
May 3 J9 1 0 8 00 1 0 8 00
12 J9 5 2 00 1 6 0 00
26 J9 7 6 00 2 3 6 00
ACCOUNT Freight-In ACCOUNT NO. 502

POST. BALANCE
REF. DEBIT CREDIT
20--
May 30 J9 1 2 0 0 00 1 2 0 0 00
ACCOUNT Rent Expense ACCOUNT NO. 521

POST. BALANCE
REF. DEBIT CREDIT
20--
May 1 J9 2 4 0 0 00 2 4 0 0 00
ACCOUNT Utilities Expense ACCOUNT NO. 533

POST. BALANCE
REF. DEBIT CREDIT
20--
May 15 J9 1 7 2 0 00 1 7 2 0 00
CHAPTER 11 411

NAME Fantastic Toys
ADDRESS
POST.
REF.
20--
May 1 Balance  5 2 0 0 00
12 J9 5 2 0 0 00
NAME Goya Outlet

ADDRESS
POST.
REF.
20--
May 1 Balance  3 8 0 0 00
26 J9 3 8 0 0 00
NAME Mueller’s Distributors

ADDRESS
POST.
REF.
20--
May 1 Balance  3 6 0 0 00
3 J9 3 6 0 0 00
NAME Van Kooning

ADDRESS
POST.
REF.
20--
May 1 Balance  7 4 0 0 00
7 J9 5 5 0 0 00 1 9 0 0 00
412 CHAPTER 11
Problem 11-11A
1.
POST.
REF.
20--
1 July 1 Rent Expense 521 2 5 0 0 00 1
2 Cash 101 2 5 0 0 00 2
3 Check No. 414 3
4 4
5 1 Purchases 501 2 8 0 0 00 5
6 Accounts Payable/Tilly’s Toys 202/ 2 8 0 0 00 6
7 Invoice No. 311 7
8 8
9 3 Purchases 501 3 3 0 0 00 9
10 Accounts Payable/Scheer & Company 202/ 3 3 0 0 00 10
12 12
13 5 Accounts Payable/Tilly’s Toys 202/ 3 0 0 00 13
16 16
17 8 Purchases 501 2 9 0 0 00 17
18 Accounts Payable/Donna’s Dolls 202/ 2 9 0 0 00 18
20 20
21 11 Accounts Payable/Tilly’s Toys 202/ 2 5 0 0 00 21
22 Cash 101 2 4 5 0 00 22
24 Check No. 415 24
25 25
26 13 Accounts Payable/Scheer & Company 202/ 3 3 0 0 00 26
27 Cash 101 3 2 6 7 00 27
29 Check No. 416 29
30 30
31 15 Accounts Payable/Donna’s Dolls 202/ 3 5 0 00 31
34 34
CHAPTER 11 413
POST.
REF.
20--
1 July 18 Accounts Payable/Donna’s Dolls 202/ 2 5 5 0 00 1
2 Cash 101 2 4 9 9 00 2
4 Check No. 417 4
5 5
6 25 Purchases 501 2 6 5 0 00 6
7 Accounts Payable/Applied Business 202/ 2 6 5 0 00 7
8 Invoice No. 489 8
9 9
10 26 Purchases 501 2 1 8 0 00 10
11 Accounts Payable/Tilly’s Toys 202/ 2 1 8 0 00 11
13 13
14 29 Purchases 501 3 5 6 0 00 14
15 Accounts Payable/Scheer & Company 202/ 3 5 6 0 00 15
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
33 33
34 34
414 CHAPTER 11

2.
GENERAL LEDGER

POST. BALANCE
REF. DEBIT CREDIT
20--
July 1 Balance  21 0 0 0 00
1 J16 2 5 0 0 00 18 5 0 0 00
11 J16 2 4 5 0 00 16 0 5 0 00
13 J16 3 2 6 7 00 12 7 8 3 00
18 J17 2 4 9 9 00 10 2 8 4 00

POST. BALANCE
REF. DEBIT CREDIT
20--
July 1 J16 2 8 0 0 00 2 8 0 0 00
3 J16 3 3 0 0 00 6 1 0 0 00
5 J16 3 0 0 00 5 8 0 0 00
8 J16 2 9 0 0 00 8 7 0 0 00
11 J16 2 5 0 0 00 6 2 0 0 00
13 J16 3 3 0 0 00 2 9 0 0 00
15 J16 3 5 0 00 2 5 5 0 00
18 J17 2 5 5 0 00
25 J17 2 6 5 0 00 2 6 5 0 00
26 J17 2 1 8 0 00 4 8 3 0 00
29 J17 3 5 6 0 00 8 3 9 0 00
CHAPTER 11 415

POST. BALANCE
REF. DEBIT CREDIT
20--
July 1 J16 2 8 0 0 00 2 8 0 0 00
3 J16 3 3 0 0 00 6 1 0 0 00
8 J16 2 9 0 0 00 9 0 0 0 00
25 J17 2 6 5 0 00 11 6 5 0 00
26 J17 2 1 8 0 00 13 8 3 0 00
29 J17 3 5 6 0 00 17 3 9 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
July 5 J16 3 0 0 00 3 0 0 00
15 J16 3 5 0 00 6 5 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
July 11 J16 5 0 00 5 0 00
13 J16 3 3 00 8 3 00
18 J17 5 1 00 1 3 4 00

POST. BALANCE
REF. DEBIT CREDIT
20--
July 1 J16 2 5 0 0 00 2 5 0 0 00
416 CHAPTER 11

NAME Applied Business
ADDRESS
POST.
REF.
20--
July 25 J17 2 6 5 0 00 2 6 5 0 00
NAME Donna’s Dolls

ADDRESS
POST.
REF.
20--
July 8 J16 2 9 0 0 00 2 9 0 0 00
15 J16 3 5 0 00 2 5 5 0 00
18 J17 2 5 5 0 00
NAME Scheer & Company

ADDRESS
POST.
REF.
20--
July 3 J16 3 3 0 0 00 3 3 0 0 00
13 J16 3 3 0 0 00
29 J17 3 5 6 0 00 3 5 6 0 00
NAME Tilly’s Toys

ADDRESS
POST.
REF.
20--
July 1 J16 2 8 0 0 00 2 8 0 0 00
5 J16 3 0 0 00 2 5 0 0 00
11 J16 2 5 0 0 00
26 J17 2 1 8 0 00 2 1 8 0 00
CHAPTER 11 417
Problem 11-12A
Frank’s Fantasy
July 31, 20--
Applied Business $2 6 5 0 00
Scheer & Company 3 5 6 0 00
Tilly’s Toys 2 1 8 0 00
$8 3 9 0 00
Proof
Balance of Accounts Payable, July 31 $8 3 9 0 00
418 CHAPTER 11
Exercise 11-1B
1. A form used to request the purchase of merchandise or other property

2. A written order to buy goods from a vendor
3. A form indicating what goods have been received
4. A bill from the vendor for goods shipped
Exercise 11-2B
1.
Gross amount $5,000
Less 10% trade discount 500
Net amount of purchases $4,500
2.
Net amount $4,500
Less 3% discount 135
Net amount to be paid $4,365
3.
POST.
REF.
20--
1 June 12 Purchases 4 5 0 0 00 1
2 Accounts Payable/Grant’s Distributors 4 5 0 0 00 2
4 4
5 22 Accounts Payable/Grant’s Distributors 4 5 0 0 00 5
6 Cash 4 3 6 5 00 6
9 9
10 10
11 11
12 12
13 13
15 15
CHAPTER 11 419
Exercise 11-3B
1.

(a) 2,300
(b) 3,600

(a) 2,300
(b) 3,600
2.

(c) 3,920 (c) 4,000 (a) 4,000
(d) 2,800 (d) 2,800 (b) 2,800

(a) 4,000
(b) 2,800

(c) 80
420 CHAPTER 11
Exercise 11-3B (Concluded)

3.

(c) 4,900 (b) 600 (a) 5,600
(c) 5,000

(a) 5,600 (b) 600

(c) 100
4.

(b) 4,000 (b) 4,000 (a) 4,000

(a) 3,800

(a) 200
CHAPTER 11 421
Exercise 11-4B
Sales $116,900
Less: Sales returns and allowances $ 1,100
Sales discounts 400 1,500
Net sales $115,400
Cost of goods sold
Merchandise inventory, Jan. 1 $ 30,000
Purchases $100,000
Less: Purchases returns and allow. $2,000
Purchases discounts 2,800 4,800
Net purchases $ 95,200
Add freight-in 1,500
Cost of goods purchased 96,700
Goods available for sale $126,700
Less merchandise inventory, Dec. 31 50,000
Cost of goods sold 76,700
Gross profit $ 38,700
422 CHAPTER 11
Exercise 11-5B
POST.
REF.
20--
1 Jan. 3 Purchases 6 0 0 0 00 1
2 Accounts Payable/Feng 6 0 0 0 00 2
3 Invoice No. 416 3
4 4
5 12 Purchases 9 0 0 0 00 5
6 Accounts Payable/Miranda 9 0 0 0 00 6
7 Invoice No. 624 7
8 8
9 19 Purchases 6 4 0 0 00 9
10 Accounts Payable/J. B. Barba 6 4 0 0 00 10
12 12
13 26 Purchases 3 7 0 0 00 13
14 Accounts Payable/Ramirez 3 7 0 0 00 14
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
33 33
34 34
CHAPTER 11 423
Exercise 11-6B
POST.
REF.
20--
1 Mar. 5 Accounts Payable/Tower Industries 202/ 5 0 0 00 1
4 4
5 11 Accounts Payable/A & D Arms 202/ 6 2 5 00 5
8 8
9 23 Accounts Payable/Mighty Mansion 202/ 2 7 5 00 9
12 12
GENERAL LEDGER

POST. BALANCE
REF. DEBIT CREDIT
20--
Mar. 1 Balance  8 3 5 0 00
5 J3 5 0 0 00 7 8 5 0 00
11 J3 6 2 5 00 7 2 2 5 00
23 J3 2 7 5 00 6 9 5 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
Mar. 5 J3 5 0 0 00 5 0 0 00
11 J3 6 2 5 00 1 1 2 5 00
23 J3 2 7 5 00 1 4 0 0 00
424 CHAPTER 11
Exercise 11-6B (Concluded)
NAME A & D Arms

ADDRESS
POST.
REF.
20--
Mar. 1 Balance  2 3 0 0 00
11 J3 6 2 5 00 1 6 7 5 00
NAME Mighty Mansion

ADDRESS
POST.
REF.
20--
Mar. 1 Balance  1 4 5 0 00
23 J3 2 7 5 00 1 1 7 5 00
NAME Tower Industries

ADDRESS
POST.
REF.
20--
Mar. 1 Balance  4 6 0 0 00
5 J3 5 0 0 00 4 1 0 0 00
CHAPTER 11 425
Exercise 11-7B
POST.
REF.
20--
1 Apr. 5 Accounts Payable/Standard Industries 8 0 0 0 00 1
2 Cash 7 8 4 0 00 2
4 Check No. 429 4
5 5
6 19 Accounts Payable/Finest Company 5 0 0 0 00 6
7 Cash 4 9 5 0 00 7
9 Check No. 430 9
10 10
11 21 Accounts Payable/Funny Follies 3 2 5 0 00 11
12 Cash 3 2 5 0 00 12
13 Check No. 431 13
14 14
15 29 Accounts Payable/Classic Data 7 0 0 0 00 15
16 Cash 6 8 6 0 00 16
18 Check No. 432 18
19 19
20 20
21 21
Exercise 11-8B
Crystal’s Candles
November 30, 20--
Carl’s Candle Wax $ 3 4 8 0 00

Handy Supplies 2 9 6 0 00
Wishy Wicks 4 1 2 5 00
$10 5 6 5 00
426 CHAPTER 11
Problem 11-9B
1.
POST.
REF.
20--
1 Oct. 2 Purchases 501 1 9 5 0 00 1
2 Accounts Payable/Boggs Distributors 202/ 1 9 5 0 00 2
3 Invoice No. 321 3
4 4
5 7 Purchases 501 2 9 1 5 00 5
6 Accounts Payable/Wolfs Wholesaler 202/ 2 9 1 5 00 6
7 Invoice No. 152 7
8 8
9 10 Purchases 501 3 5 6 5 00 9
10 Accounts Payable/Komuro & Co. 202/ 3 5 6 5 00 10
12 12
13 16 Purchases 501 2 8 4 5 00 13
14 Accounts Payable/Fritz & McCord, Inc. 202/ 2 8 4 5 00 14
16 16
17 24 Purchases 501 3 3 7 0 00 17
18 Accounts Payable/Boggs Distributors 202/ 3 3 7 0 00 18
20 20
21 26 Purchases 501 2 2 4 0 00 21
22 Accounts Payable/Sanderson Company 202/ 2 2 4 0 00 22
24 24
25 31 Purchases 501 1 6 3 0 00 25
26 Account Payable/Wolfs Wholesaler 202/ 1 6 3 0 00 26
28 28
29 29
30 30
31 31
32 32
33 33
34 34
CHAPTER 11 427
Problem 11-9B (Continued)

2.
GENERAL LEDGER

POST. BALANCE
REF. DEBIT CREDIT
20--
Oct. 2 J16 1 9 5 0 00 1 9 5 0 00
7 J16 2 9 1 5 00 4 8 6 5 00
10 J16 3 5 6 5 00 8 4 3 0 00
16 J16 2 8 4 5 00 11 2 7 5 00
24 J16 3 3 7 0 00 14 6 4 5 00
26 J16 2 2 4 0 00 16 8 8 5 00
31 J16 1 6 3 0 00 18 5 1 5 00

POST. BALANCE
REF. DEBIT CREDIT
20--
Oct. 2 J16 1 9 5 0 00 1 9 5 0 00
7 J16 2 9 1 5 00 4 8 6 5 00
10 J16 3 5 6 5 00 8 4 3 0 00
16 J16 2 8 4 5 00 11 2 7 5 00
24 J16 3 3 7 0 00 14 6 4 5 00
26 J16 2 2 4 0 00 16 8 8 5 00
31 J16 1 6 3 0 00 18 5 1 5 00

NAME Boggs Distributors
ADDRESS
POST.
REF.
20--
Oct. 2 J16 1 9 5 0 00 1 9 5 0 00
24 J16 3 3 7 0 00 5 3 2 0 00
428 CHAPTER 11
Problem 11-9B (Concluded)
NAME Fritz & McCord, Inc.

ADDRESS
POST.
REF.
20--
Oct. 16 J16 2 8 4 5 00 2 8 4 5 00
NAME Komuro & Co.

ADDRESS
POST.
REF.
20--
Oct. 10 J16 3 5 6 5 00 3 5 6 5 00
NAME Sanderson Company

ADDRESS
POST.
REF.
20--
Oct. 26 J16 2 2 4 0 00 2 2 4 0 00
NAME Wolfs Wholesaler

ADDRESS
POST.
REF.
20--
Oct. 7 J16 2 9 1 5 00 2 9 1 5 00
31 J16 1 6 3 0 00 4 5 4 5 00
CHAPTER 11 429
Problem 11-10B
1.
POST.
REF.
20--
1 May 1 Rent Expense 521 2 6 0 0 00 1
2 Cash 101 2 6 0 0 00 2
3 Check No. 326 3
4 4
5 4 Accounts Payable/Cortez Distributors 202/ 4 2 0 0 00 5
6 Cash 101 4 0 7 4 00 6
8 Check No. 327 8
9 9
10 7 Accounts Payable/Indra & Velga 202/ 6 2 0 0 00 10
11 Cash 101 6 2 0 0 00 11
12 Check No. 328 12
13 13
14 11 Accounts Payable/Toy Corner 202/ 4 6 0 0 00 14
15 Cash 101 4 5 5 4 00 15
17 Check No. 329 17
18 18
19 15 Utilities Expense 533 1 5 0 0 00 19
20 Cash 101 1 5 0 0 00 20
21 Check No. 330 21
22 22
23 19 Purchases 501 3 5 0 0 00 23
24 Cash 101 3 5 0 0 00 24
25 Check No. 331 25
26 26
27 25 Accounts Payable/Troutman Outlet 202/ 4 4 0 0 00 27
28 Cash 101 4 3 1 2 00 28
30 Check No. 332 30
31 31
32 30 Freight-In 502 8 0 0 00 32
33 Cash 101 8 0 0 00 33
34 Check No. 333 34
430 CHAPTER 11

POST.
REF.
20--
1 May 31 Purchases 501 2 3 5 0 00 1
2 Cash 101 2 3 5 0 00 2
3 Check No. 334 3
4 4
5 5
2.
GENERAL LEDGER

POST. BALANCE
REF. DEBIT CREDIT
20--
May 1 Balance  40 0 0 0 00
1 J9 2 6 0 0 00 37 4 0 0 00
4 J9 4 0 7 4 00 33 3 2 6 00
7 J9 6 2 0 0 00 27 1 2 6 00
11 J9 4 5 5 4 00 22 5 7 2 00
15 J9 1 5 0 0 00 21 0 7 2 00
19 J9 3 5 0 0 00 17 5 7 2 00
25 J9 4 3 1 2 00 13 2 6 0 00
30 J9 8 0 0 00 12 4 6 0 00
31 J10 2 3 5 0 00 10 1 1 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
May 1 Balance  20 0 0 0 00
4 J9 4 2 0 0 00 15 8 0 0 00
7 J9 6 2 0 0 00 9 6 0 0 00
11 J9 4 6 0 0 00 5 0 0 0 00
25 J9 4 4 0 0 00 6 0 0 00
CHAPTER 11 431

POST. BALANCE
REF. DEBIT CREDIT
20--
May 19 J9 3 5 0 0 00 3 5 0 0 00
31 J10 2 3 5 0 00 5 8 5 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
May 4 J9 1 2 6 00 1 2 6 00
11 J9 4 6 00 1 7 2 00
25 J9 8 8 00 2 6 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
May 30 J9 8 0 0 00 8 0 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
May 1 J9 2 6 0 0 00 2 6 0 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
May 15 J9 1 5 0 0 00 1 5 0 0 00
432 CHAPTER 11

NAME Cortez Distributors
ADDRESS
POST.
REF.
20--
May 1 Balance  4 2 0 0 00
4 J9 4 2 0 0 00
NAME Indra & Velga

ADDRESS
POST.
REF.
20--
May 1 Balance  6 8 0 0 00
7 J9 6 2 0 0 00 6 0 0 00
NAME Toy Corner

ADDRESS
POST.
REF.
20--
May 1 Balance  4 6 0 0 00
11 J9 4 6 0 0 00
NAME Troutman Outlet

ADDRESS
POST.
REF.
20--
May 1 Balance  4 4 0 0 00
25 J9 4 4 0 0 00
CHAPTER 11 433
Problem 11-11B
1.
POST.
REF.
20--
1 July 1 Rent Expense 521 1 4 0 0 00 1
2 Cash 101 1 4 0 0 00 2
3 Check No. 314 3
4 4
5 1 Purchases 501 2 5 0 0 00 5
6 Accounts Payable/Topper’s Toys 202/ 2 5 0 0 00 6
7 Invoice No. 211 7
8 8
9 3 Purchases 501 2 8 0 0 00 9
10 Accounts Payable/Jones & Company 202/ 2 8 0 0 00 10
12 12
13 5 Accounts Payable/Topper’s Toys 202/ 4 0 0 00 13
16 16
17 8 Purchases 501 1 6 0 0 00 17
18 Accounts Payable/Downtown Merchants 202/ 1 6 0 0 00 18
20 20
21 11 Accounts Payable/Topper’s Toys 202/ 2 1 0 0 00 21
22 Cash 101 2 0 5 8 00 22
24 Check No. 315 24
25 25
26 13 Accounts Payable/Jones & Company 202/ 2 8 0 0 00 26
27 Cash 101 2 7 7 2 00 27
29 Check No. 316 29
30 30
31 15 Accounts Payable/Downtown Merchants 202/ 6 0 0 00 31
34 34
434 CHAPTER 11
POST.
REF.
20--
1 July 18 Accounts Payable/Downtown Merchants 202/ 1 0 0 0 00 1
2 Cash 101 9 8 0 00 2
4 Check No. 317 4
5 5
6 25 Purchases 501 3 2 0 0 00 6
7 Accounts Payable/Columbia Products 202/ 3 2 0 0 00 7
8 Invoice No. 468 8
9 9
10 26 Purchases 501 1 4 3 0 00 10
11 Accounts Payable/Topper’s Toys 202/ 1 4 3 0 00 11
13 13
14 29 Purchases 501 2 9 7 0 00 14
15 Accounts Payable/Jones & Company 202/ 2 9 7 0 00 15
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
33 33
34 34
CHAPTER 11 435

2.
GENERAL LEDGER

POST. BALANCE
REF. DEBIT CREDIT
20--
July 1 Balance  20 0 0 0 00
1 J16 1 4 0 0 00 18 6 0 0 00
11 J16 2 0 5 8 00 16 5 4 2 00
13 J16 2 7 7 2 00 13 7 7 0 00
18 J17 9 8 0 00 12 7 9 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
July 1 J16 2 5 0 0 00 2 5 0 0 00
3 J16 2 8 0 0 00 5 3 0 0 00
5 J16 4 0 0 00 4 9 0 0 00
8 J16 1 6 0 0 00 6 5 0 0 00
11 J16 2 1 0 0 00 4 4 0 0 00
13 J16 2 8 0 0 00 1 6 0 0 00
15 J16 6 0 0 00 1 0 0 0 00
18 J17 1 0 0 0 00
25 J17 3 2 0 0 00 3 2 0 0 00
26 J17 1 4 3 0 00 4 6 3 0 00
29 J17 2 9 7 0 00 7 6 0 0 00
436 CHAPTER 11

POST. BALANCE
REF. DEBIT CREDIT
20--
July 1 J16 2 5 0 0 00 2 5 0 0 00
3 J16 2 8 0 0 00 5 3 0 0 00
8 J16 1 6 0 0 00 6 9 0 0 00
25 J17 3 2 0 0 00 10 1 0 0 00
26 J17 1 4 3 0 00 11 5 3 0 00
29 J17 2 9 7 0 00 14 5 0 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
July 5 J16 4 0 0 00 4 0 0 00
15 J16 6 0 0 00 1 0 0 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
July 11 J16 4 2 00 4 2 00
13 J16 2 8 00 7 0 00
18 J17 2 0 00 9 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
July 1 J16 1 4 0 0 00 1 4 0 0 00
CHAPTER 11 437

NAME Columbia Products
ADDRESS
POST.
REF.
20--
July 25 J17 3 2 0 0 00 3 2 0 0 00
NAME Downtown Merchants

ADDRESS
POST.
REF.
20--
July 8 J16 1 6 0 0 00 1 6 0 0 00
15 J16 6 0 0 00 1 0 0 0 00
18 J17 1 0 0 0 00
NAME Jones & Company

ADDRESS
POST.
REF.
20--
July 3 J16 2 8 0 0 00 2 8 0 0 00
13 J16 2 8 0 0 00
29 J17 2 9 7 0 00 2 9 7 0 00
NAME Topper’s Toys

ADDRESS
POST.
REF.
20--
July 1 J16 2 5 0 0 00 2 5 0 0 00
5 J16 4 0 0 00 2 1 0 0 00
11 J16 2 1 0 0 00
26 J17 1 4 3 0 00 1 4 3 0 00
438 CHAPTER 11
Problem 11-12B
Debbie’s Doll House
July 31, 20--
Columbia Products $3 2 0 0 00
Jones & Company 2 9 7 0 00
Topper’s Toys 1 4 3 0 00
$7 6 0 0 00
Proof
Balance of Accounts Payable, July 31 $7 6 0 0 00
CHAPTER 11 439
MANAGING YOUR WRITING
Cash discounts of 1% or 2% seem small, but when converted to an annual rate, the discounts are
substantial. For example, a $1,000 purchase with terms of 2/10, n/30, would yield a discount of only $20
if paid within the discount period. But if the invoice is not paid until the 30-day due date, the $20 lost
discount is the expense the business incurs for having the use of $980 ($1,000 – $20) for only 20 days.
The approximate annual interest rate is 36% (360 days/20 days × 2%). This is an expensive way to
finance purchases.
The supplier invoices should be filed by due date within the discount period. This will provide a
reminder to make payments within the discount period and help the business to plan for its cash needs.
ETHICS CASE: SUGGESTED SOLUTIONS
1. Although it is a good cash management practice to pay invoices on the last day of the discount
period, Bob is taking more time than the seller is willing to extend him. Since the seller has contacted
him, Bob is behaving in an unethical manner by his attempts to avoid paying within the discount
period and still deducting the discount.
2. Answers will vary. Auto Warehouse can add on to the next invoice the discount Bob has taken or
send him a separate invoice for the balance owed. Auto Warehouse can change the credit terms to
net cash or refuse to extend Bob’s Discount Auto Parts credit.
3. Answers will vary. Students might point out that the purpose of cash discounts is to encourage
prompt payment by customers. In this case, the payment must be postmarked within 10 days of the
date of the invoice.
4. Answers will vary. Advantages: attracting and retaining customers, shortening your collection of
receivables time. Disadvantages: discrepancies involving cash discounts taken.
440 CHAPTER 11
Mastery Problem
1.
POST.
REF.
20--
1 June 1 Purchases 501 2 1 0 0 00 1
2 Accounts Payable/Irving Publishing Company 202/ 2 1 0 0 00 2
3 Invoice No. 101 3
4 4
5 2 Accounts Payable/Northeastern Publishing Co. 202/ 2 0 0 0 00 5
6 Cash 101 1 9 6 0 00 6
8 Check No. 300 8
9 9
10 3 Purchases 501 2 3 0 4 00 10
11 Accounts Payable/Broadway Publishing, Inc. 202/ 2 3 0 4 00 11
13 13
14 3 Freight-In 502 2 5 0 00 14
15 Cash 101 2 5 0 00 15
16 Check No. 301 16
17 17
18 4 Rent Expense 521 6 2 5 00 18
19 Cash 101 6 2 5 00 19
20 Check No. 302 20
21 21
22 8 Purchases 501 5 8 2 5 00 22
23 Accts. Payable/Northeastern Publishing Co. 202/ 5 8 2 5 00 23
25 25
26 10 Accounts Payable/Irving Publishing Company 202/ 5 5 0 00 26
29 29
30 13 Accounts Payable/Broadway Publishing, Inc. 202/ 2 3 0 4 00 30
31 Cash 101 2 2 3 4 88 31
33 Check No. 304 33
34 34
CHAPTER 11 441
Mastery Problem (Continued)
POST.
REF.
20--
1 June 28 Purchases 501 2 3 5 0 00 1
2 Accounts Payable/Broadway Publishing, Inc. 202/ 2 3 5 0 00 2
3 Invoice No. 579 3
4 4
5 28 Purchases 501 4 2 0 0 00 5
6 Accts. Payable/Northeastern Publishing Co. 202/ 4 2 0 0 00 6
7 Invoice No. 406 7
8 8
9 28 Purchases 501 3 4 5 0 00 9
10 Accounts Payable/Riley Publishing Co. 202/ 3 4 5 0 00 10
12 12
13 30 Utilities Expense 533 3 2 5 00 13
14 Cash 101 3 2 5 00 14
15 Check No. 305 15
16 16
17 30 M. French, Drawing 312 4 5 0 0 00 17
18 Cash 101 4 5 0 0 00 18
19 Check No. 306 19
20 20
21 30 Accounts Payable/Irving Publishing Company 202/ 1 5 5 0 00 21
22 Cash 101 1 5 5 0 00 22
23 Check No. 307 23
24 24
25 30 Accounts Payable/Northeastern Publishing Co. 202/ 5 8 2 5 00 25
26 Cash 101 5 7 0 8 50 26
28 Check No. 308 28
29 29
30 30 Purchases 501 1 3 2 8 00 30
31 Cash 101 1 3 2 8 00 31
32 Check No. 309 32
33 33
34 34
442 CHAPTER 11

2.
GENERAL LEDGER

POST. BALANCE
REF. DEBIT CREDIT
20--
June 1 Balance  32 2 0 0 00
2 J16 1 9 6 0 00 30 2 4 0 00
3 J16 2 5 0 00 29 9 9 0 00
4 J16 6 2 5 00 29 3 6 5 00
13 J16 2 2 3 4 88 27 1 3 0 12
30 J17 3 2 5 00 26 8 0 5 12
30 J17 4 5 0 0 00 22 3 0 5 12
30 J17 1 5 5 0 00 20 7 5 5 12
30 J17 5 7 0 8 50 15 0 4 6 62
30 J17 1 3 2 8 00 13 7 1 8 62

POST. BALANCE
REF. DEBIT CREDIT
20--
June 1 Balance  2 0 0 0 00
1 J16 2 1 0 0 00 4 1 0 0 00
2 J16 2 0 0 0 00 2 1 0 0 00
3 J16 2 3 0 4 00 4 4 0 4 00
8 J16 5 8 2 5 00 10 2 2 9 00
10 J16 5 5 0 00 9 6 7 9 00
13 J16 2 3 0 4 00 7 3 7 5 00
28 J17 2 3 5 0 00 9 7 2 5 00
28 J17 4 2 0 0 00 13 9 2 5 00
28 J17 3 4 5 0 00 17 3 7 5 00
30 J17 1 5 5 0 00 15 8 2 5 00
30 J17 5 8 2 5 00 10 0 0 0 00
CHAPTER 11 443
ACCOUNT M. French, Drawing ACCOUNT NO. 312

POST. BALANCE
REF. DEBIT CREDIT
20--
June 1 Balance  18 0 0 0 00
30 J17 4 5 0 0 00 22 5 0 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
June 1 Balance  67 0 2 1 66
1 J16 2 1 0 0 00 69 1 2 1 66
3 J16 2 3 0 4 00 71 4 2 5 66
8 J16 5 8 2 5 00 77 2 5 0 66
28 J17 2 3 5 0 00 79 6 0 0 66
28 J17 4 2 0 0 00 83 8 0 0 66
28 J17 3 4 5 0 00 87 2 5 0 66
30 J17 1 3 2 8 00 88 5 7 8 66

POST. BALANCE
REF. DEBIT CREDIT
20--
10 J16 5 5 0 00 2 8 6 5 23

POST. BALANCE
REF. DEBIT CREDIT
20--
June 1 Balance  9 0 5 00
2 J16 4 0 00 9 4 5 00
13 J16 6 9 12 1 0 1 4 12
30 J17 1 1 6 50 1 1 3 0 62
444 CHAPTER 11

POST. BALANCE
REF. DEBIT CREDIT
20--
June 1 Balance  5 2 2 60
3 J16 2 5 0 00 7 7 2 60

POST. BALANCE
REF. DEBIT CREDIT
20--
4 J16 6 2 5 00 3 7 5 0 00

POST. BALANCE
REF. DEBIT CREDIT
20--
30 J17 3 2 5 00 1 8 4 7 87
NAME Broadway Publishing, Inc.

ADDRESS 2300 Goodman, Cincinnati, OH 45219-2901
POST.
REF.
20--
June 3 J16 2 3 0 4 00 2 3 0 4 00
13 J16 2 3 0 4 00
28 J17 2 3 5 0 00 2 3 5 0 00
CHAPTER 11 445
NAME Irving Publishing Company

ADDRESS 5200 N. Keystone Ave., Indianapolis, IN 46220-1986
POST.
REF.
20--
June 1 J16 2 1 0 0 00 2 1 0 0 00
10 J16 5 5 0 00 1 5 5 0 00
30 J17 1 5 5 0 00
NAME Northeastern Publishing Co.

ADDRESS 874 Crescent Drive, Flint, MI 48503-7564
POST.
REF.
20--
2 J16 2 0 0 0 00
8 J16 5 8 2 5 00 5 8 2 5 00
28 J17 4 2 0 0 00 10 0 2 5 00
30 J17 5 8 2 5 00 4 2 0 0 00
NAME Riley Publishing Co.

ADDRESS 5675 Pulaski Road, Chicago, IL 60629-6705
POST.
REF.
20--
June 28 J17 3 4 5 0 00 3 4 5 0 00
446 CHAPTER 11
Mastery Problem (Concluded)

3.
Books and More
June 30, 20--
Broadway Publishing, Inc. $ 2 3 5 0 00

Northeastern Publishing Co. 4 2 0 0 00
Riley Publishing Co. 3 4 5 0 00
$10 0 0 0 00
4.
Cost of goods sold

Merchandise inventory, January 1 $ 35,523.00
Purchases $88,578.66
Less: Purchases returns and allowances $2,865.23
Purchases discounts 1,130.62 3,995.85
Net purchases $84,582.81
Add freight-in 772.60
Cost of goods purchased 85,355.41
Goods available for sale $120,878.41
Less merchandise inventory, June 30 42,100.00
Cost of goods sold $ 78,778.41
CHAPTER 11 447
Challenge Problem
POST.
REF.
20--
1 May 4 Purchases 2 6 1 0 00 1
2 Accounts Payable 2 6 1 0 00 2
3 Made purchases on account 3
4 4
5 8 Accounts Payable 4 6 8 00 5
6 Purchases Returns and Allowances 4 6 8 00 6
8 8
9 14 Accounts Payable 9 0 0 00 9
10 Cash 8 9 1 00 10
11 Purchases Discounts 9 00 11
12 Made payment on account 12
13 13
14 June 3 Accounts Payable 1 2 4 2 00 14
15 Cash 1 2 4 2 00 15
16 Made payment on account 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
33 33
34 34
448 CHAPTER 11
APPENDIX: THE NET-PRICE METHOD OF RECORDING PURCHASES
REVIEW QUESTIONS
1. Under the net-price method, purchases should be recorded at the net amount, after deducting the
cash discount.
2. If payment for merchandise is not made within the discount period, debits are made to Accounts
Payable and Purchases Discounts Lost.
3. (a) Purchases Discounts Lost is a temporary owner’s equity account.

(b) Purchases Discounts Lost is reported as an expense on the income statement.
CHAPTER 11 449
Exercise 11Apx-1A
1.
POST.
REF.
20--
1 Apr. 2 Purchases 1 0 0 0 00 1
2 Accounts Payable/Alanon Valve 1 0 0 0 00 2
4 4
5 5 Purchases 1 4 0 0 00 5
6 Accounts Payable/Leon’s Garage 1 4 0 0 00 6
8 8
9 11 Accounts Payable/Alanon Valve 1 0 0 0 00 9
10 Cash 9 8 0 00 10
13 13
14 25 Accounts Payable/Leon’s Garage 1 4 0 0 00 14
15 Cash 1 4 0 0 00 15
16 Paid invoice 16
2.
20--
1 Apr. 2 Purchases 9 8 0 00 1
2 Accounts Payable/Alanon Valve 9 8 0 00 2
4 4
5 5 Purchases 1 3 8 6 00 5
6 Accounts Payable/Leon’s Garage 1 3 8 6 00 6
8 8
9 11 Accounts Payable/Alanon Valve 9 8 0 00 9
10 Cash 9 8 0 00 10
12 12
13 25 Accounts Payable/Leon’s Garage 1 3 8 6 00 13
14 Purchases Discounts Lost 1 4 00 14
15 Cash 1 4 0 0 00 15
16 Paid invoice 16
Solution Manual for College Accounting, Chapters 1-27, 23th by Heintz
450 CHAPTER 11
Exercise 11Apx-1B
1.
POST.
REF.
20--
1 May 2 Purchases 9 0 0 00 1
2 Accounts Payable/Delgado’s Supply 9 0 0 00 2
4 4
5 6 Purchases 1 2 0 0 00 5
6 Accounts Payable/Goro’s Auto Care 1 2 0 0 00 6
8 8
9 11 Accounts Payable/Delgado’s Supply 9 0 0 00 9
10 Cash 8 8 2 00 10
13 13
14 27 Accounts Payable/Goro’s Auto Care 1 2 0 0 00 14
15 Cash 1 2 0 0 00 15
16 Paid invoice 16
2.
20--
1 May 2 Purchases 8 8 2 00 1
2 Accounts Payable/Delgado’s Supply 8 8 2 00 2
4 4
5 6 Purchases 1 1 8 8 00 5
6 Accounts Payable/Goro’s Auto Care 1 1 8 8 00 6
8 8
9 11 Accounts Payable/Delgado’s Supply 8 8 2 00 9
10 Cash 8 8 2 00 10
12 12
13 27 Accounts Payable/Goro’s Auto Care 1 1 8 8 00 13
14 Purchases Discounts Lost 1 2 00 14
15 Cash 1 2 0 0 00 15
16 Paid invoice 16
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ACCOUNTING FOR PURCHASES AND CASH PAYMENTS

7. To post purchases from the general journal to the general ledger:

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In the accounts payable ledger account:

12. To find the error, use the following steps:

2 Accounts Payable/Jacob’s Distributors 1 8 0 0 00 2

5 27 Accounts Payable/Jacob’s Distributors 1 8 0 0 00 5

8 Paid invoice within discount period 8

Cash Accounts Payable

Purchases Purchases Returns and Allowances

Purchases Discounts Freight-In

Cash Accounts Payable

Purchases Purchases Returns and Allowances

Purchases Discounts Freight-In

Exercise 11-3A (Concluded)

Cash Accounts Payable

Purchases Purchases Returns and Allowances

Purchases Discounts Freight-In

Cash Accounts Payable

Purchases Purchases Returns and Allowances

Purchases Discounts Freight-In

GENERAL JOURNAL PAGE

3 Invoice No. 321 3

7 Invoice No. 614 7

10 Accounts Payable/Yao Distributors 2 2 0 0 00 10

11 Invoice No. 180 11

15 Invoice No. 913 15

GENERAL JOURNAL PAGE 3

2 Purchases Returns and Allowances 501.1 7 0 0 00 2

5 15 Accounts Payable/XYZ, Inc. 202/ 4 5 0 00 5

6 Purchases Returns and Allowances 501.1 4 5 0 00 6

9 27 Accounts Payable/Datamagic 202/ 9 0 0 00 9

10 Purchases Returns and Allowances 501.1 9 0 0 00 10

ACCOUNT Accounts Payable ACCOUNT NO. 202

ACCOUNT Purchases Returns and Allowances ACCOUNT NO. 501.1

Exercise 11-6A (Concluded)

ACCOUNTS PAYABLE LEDGER

NAME Starcraft Industries

NAME XYZ, Inc.

4 Check No. 318 4

6 12 Accounts Payable/Martin Company 8 1 0 0 00 6

9 Check No. 319 9

11 19 Accounts Payable/Cloud Systems 6 1 0 0 00 11

13 Check No. 320 13

15 27 Account Payable/Dynamic Data 7 0 0 0 00 15

18 Check No. 321 18

2 Accounts Payable/Smith Distributors 202/ 2 6 5 0 00 2

3 Invoice No. 415 3

6 Accounts Payable/Michaels Wholesaler 202/ 3 8 3 0 00 6

7 Invoice No. 132 7

10 Accounts Payable/J. B. Sanders & Co. 202/ 3 1 4 0 00 10

11 Invoice No. 614 11

14 Accounts Payable/Bateman & Jones, Inc. 202/ 2 2 5 0 00 14

15 Invoice No. 329 15

18 Accounts Payable/Smith Distributors 202/ 4 1 6 0 00 18

19 Invoice No. 767 19

22 Accounts Payable/Anderson Company 202/ 1 9 8 0 00 22

23 Invoice No. 744 23

26 Accounts Payable/Michaels Wholesaler 202/ 2 7 8 0 00 26

27 Invoice No. 652 27