4 9 11 1 Exercise #3 2 During the month of April, Rainbow Company had the following transactions related to 3 the purchase of merchandise inventory. Rainbow Company maintains an accounts payable subsidiary ledger. 5 Apr 3 Purchased $4.000 of merchandise on account from Blue Company, terms 6 2/10. n/30. FOB Shipping Point. 7 4 Rainbow paid $500 of shipping charges to Worldwide Shipping Company 8 for the merchandise purchased on April 3 from Blue Company 5 Blue Company agreed to reduce the purchase price of the merchandise purchased 10 on April 3 by $300 6 Purchased $6,000 of merchandise on account from Red Company, terms 1/15, 1/30, FOB Destination. Red Company paid $800 of shipping charges 13 to Worldwide Shipping Company 7 Returned $1,000 of merchandise to Red Company for credit 13 Paid Blue Company the amount due. 21 Paid Red Company the amount due. 17 Instructions 18 (a) Prepare the journal entries to record the April transactions for Rainbow Company 19 in the general journal below. 20 (6) Post your journal entries to the T-accounts in the next sheet. Schedule of Accounts Payable: Does the total of the balances of the Blue and Red Company Subsidiary accounts match the balance of the general ledger Account Payable account? 12 14 15 16 21 22 23 t A B (c) What is the cost of goods purchased April? Purchases less: Purchase Returns and Allowances less: Purchase Discounts equals: Net Purchases plus: Freight-In Cost of Goods Purchased Date Account Titles PR Debit Credit 5 5 7 8 9 0 1 12 13 14 45 46 47 48 49 Short Answer Fyercise CA 1 Exercise #3 2 (6) 3 4 5 GENERAL LEDGER OF ACCOUNTS MERCHANDISE INVENTORY CASH ACCOUNTS PAYABLE 6 7 8 9 10 11 12 13 14 ACCOUNTS PAYABLE SUBSIDIARY LEDGER BLUE COMPANY RED COMPANY 15 16 17 18 19 20 21 22 23 24