Gatske Companys chart of accounts includes the following selected accounts. 101 .........Cash 120 .........Inventory 130 .........Prepaid Insurance

Question:

Gatske Company’s chart of accounts includes the following selected accounts.

101 .........Cash

120 .........Inventory

130 .........Prepaid Insurance

157 .........Equipment

201 .........Accounts Payable

332 .........Cash Dividends

505 .........Cost of Goods Sold

On October 1, the accounts payable ledger of Gatske Company showed the following balances: Deavers Company $2,700, Greer Co. $2,500, May Co. $2,100 and Snell Company $3,700. The October transactions involving the payment of cash were as follows.

Oct. 1 Purchased merchandise, check no. 63, $300.

3 Purchased equipment, check no. 64, $1,200.

5 Paid Deavers Company balance due of $2,700, less 2% discount, check no. 65, $2,646.

10 Purchased merchandise, check no. 66, $2,250.

15 Paid May Co. balance due of $2,100, check no. 67.

16 Paid cash dividend of $400, check no. 68.

19 Paid Greer Co. in full for invoice no. 610, $1,800 less 2% cash discount, check no. 69, $1,764.

29 Paid Snell Company in full for invoice no. 264, $2,500, check no. 70.


Instructions

(a) Journalize the transactions above in a four-column cash payments journal with columns for Other Accounts Dr., Accounts Payable Dr., Inventory Cr., and Cash Cr. Foot and crossfoot the journal.

(b) Insert the beginning balances in the Accounts Payable control and subsidiary accounts, and post the October transactions to these accounts.

(c) Prove the agreement of the control account and the subsidiary account balances.


Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For  answer-question

Financial and managerial accounting

ISBN: 978-1118016114

1st edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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