On October 3, Sandberg Art Supplies did an inventory and determined that they were running low on
Question:
On October 3, Sandberg Art Supplies did an inventory and determined that they were running low on several Schutzen products that had been greatly in demand for the previous month. Their clerk then placed the following order with Schutzen Oils:
Cerulean Blue - 37 mL - 13 tubes @ $14.30 each
Chromium Oxide Green - 37 mL - 16 tubes @ $6.29 each
Dioxazine Purple - 37 mL - 9 tubes @ $16.13 each
Titanium White - 37 mL - 16 tubes @ $11.85 each
Titanium White - 150 mL - 11 tubes @ $30.39 each
Venetian Red - 37 mL - 14 tubes @ $5.29 each
Begin by analyzing this transaction from the perspective of the accounts payable department at Sandberg Art Supplies.
Enter the purchase into the Purchases journal and post the transaction to the accounts payable subsidiary ledger.
2. Schutzen Oils ships the order to Sandberg Art Supply on October 4. On October 15, one of its clerks found that three tubes of Dioxazine Purple had been punctured, and these tubes are promptly returned to Schutzen Oils. Instead of receiving replacement tubes, Sandberg decides that it would like a credit. Show how this sales allowance would be reflected in the Purchases journal and accounts payable subsidiary ledger.
3. On October 16, Sandberg Art Supply receives the following invoice from Schutzen Oils.
The invoice needs to be added to the schedule of accounts payable. In addition, there are several other invoices that Sandberg Art Supply needs to add.
- Invoice 3475 for Alamany Cleaning Supplies (October 15, $475.95, 30 days);
- Invoice 7743 for Spearhead Frames and Canvases (October 14, $1,250, 30 days);
- Invoice 40378 for Superior Personnel Services (October 16, $10,500, 60 days).
List the information that must be added to the schedule of accounts payable for this invoice.
4. Sandberg Art Supply issues a check for the full amount to Schutzen Oils the following day. Show how this payment would be reflected in the accounts payable subsidiary ledger.
Auditing and Assurance services an integrated approach
ISBN: 978-0134065823
16th edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan