The chart of accounts of Henry Company includes the following selected accounts.

112 Accounts Receivable

120 Inventory

126 Supplies

157 Equipment

201 Accounts Payable

401 Sales Revenue

412 Sales Returns and Allowances

505 Cost of Goods Sold

610 Advertising Expense

In May, the following selected transactions were completed. All purchases and sales were on account except as indicated. The cost of all merchandise sold was 60% of the sales price.

May 2 Purchased merchandise from Berkman Company $5,000.

3 Received freight bill from Fast Freight on Berkman purchase $250.

5 Sales were made to Persinger Company $1,300, Fehr Bros. $2,300, and Mount

Company $1,000.

8 Purchased merchandise from Kayser Company $5,400 and Neufeld Company $3,000.

10 Received credit on merchandise returned to Neufeld Company $350.

15 Purchased supplies from Rabel’s Supplies $600.

16 Purchased merchandise from Berkman Company $3,100, and Kayser Company $4,200.

17 Returned supplies to Rabel’s Supplies, receiving credit $70. (Hint: Credit Supplies.)

18 Received freight bills on May 16 purchases from Fast Freight $325.

20 Returned merchandise to Berkman Company receiving credit $200.

23 Made sales to Fehr Bros. $1,600 and to Mount Company $2,500.

25 Received bill for advertising from Mock Advertising $620.

26 Granted allowance to Mount Company for merchandise damaged in shipment $140.

28 Purchased equipment from Rabel’s Supplies $400.

Instructions

(a) Journalize the transactions above in a purchases journal, a sales journal, and a general journal. The purchases journal should have the following column headings: Date, Account Credited (Debited), Ref., Accounts Payable Cr., Inventory Dr., and Other Accounts Dr.

(b) Post to both the general and subsidiary ledger accounts. (Assume that all accounts have zero beginning balances.)

(c) Prove the agreement of the control and subsidiary accounts.