Refer to Problem 7-1A and assume that Wise Co. uses the periodic inventory system.

Required

1. Prepare a general journal, a purchases journal like that in Exhibit 7A.3, and a cash disbursements journal like that in Exhibit 7A.4. Number all journal pages as page 3. Review the April transactions of Wise Company (Problem 7-1A) and enter those transactions that should be journalized in the general journal, the purchases journal, or the cash disbursements journal. Ignore any transaction that should be journalized in a sales journal or cash receipts journal.

2. Open the following general ledger accounts: Cash, Inventory, Office Supplies, Store Supplies, Store Equipment, Accounts Payable, Long-Term Notes Payable, B. Wise, Capital, Purchases, Purchases Returns and Allowances, Purchases Discounts, Sales Salaries Expense, and Advertising Expense. Enter the March 31 balances of Cash ($85,000), Inventory ($125,000), Long-Term Notes Payable ($110,000), and B. Wise, Capital ($100,000). Also open accounts payable subsidiary ledger accounts for Ned’s Supply, Negi Company, Price Company, and Madison, Inc.

3. Complete parts 3 and 4 of Problem 7-3A using the results of parts 1 and 2 of this problem.