The Bike and Hike Outlet is a retail store. Transactions involving purchases and cash payments for the firm during June 2016 are listed below as are the general ledger accounts used to record these transactions.

INSTRUCTIONS

1. Open the general ledger accounts and enter the balances as of June 1, 2016.

2. Record the transactions in a purchases journal, a cash payments journal, and a general journal. Use 8 as the page number for each of the special journals and 20 as the page number for the general journal.

3. Post the entries from the general journal and from the Other Accounts Debit section of the cash payments journal to the proper general ledger accounts.

4. Total, prove, and rule the special journals as of June 30.

5. Post the column totals from the special journals to the general ledger.

6. Show how the firm's net cost of purchases would be reported on its income statement for the month ended June 30.

GENERAL LEDGER ACCOUNTS

101 Cash...................................... $21,900 Dr.

131 Equipment............................... 66,000 Dr.

201 Notes Payable

205 Accounts Payable...................... 4,980 Cr.

501 Purchases

503 Purchases Ret. and Allow.

504 Purchases Discounts

611 Rent Expense

614 Salaries Expense

617 Telephone Expense

DATE TRANSACTIONS

June 1 Issued Check 1101 for $3,400 to pay the monthly rent.

3 Purchased merchandise for $3,100 from Perfect Fit Shoe Shop, Invoice 746, dated June 1; the terms are 2/10, n/30.

5 Purchased new store equipment for $5,500 from Middleton Company, Invoice 9067 dated June

4, net payable in 30 days.

7 Issued Check 1102 for $1,570 to Leisure Wear Clothing Company, a creditor, in payment of Invoice 3342 of May 9.

8 Issued Check 1103 for $3,038 to Perfect Fit Shoe Shop, a creditor, in payment of Invoice 746 dated June 1 ($3,100), less a cash discount ($62).

12 Purchased merchandise for $2,300 from Juanda's Coat Shop, Invoice 9922, dated June 9, net due and payable in 30 days.

15 Issued Check 1104 for $238 to pay the monthly telephone bill.

18 Received Credit Memorandum 203 for $800 from Juanda's Coat Shop for defective goods that were returned; the original purchase was made on Invoice 9922 dated June 9.

21 Purchased new store equipment for $10,500 from Warren Company; issued a three-month promissory note with interest at 12 percent.

23 Purchased merchandise for $6,400 from The Motor Speedway, Invoice 1927, dated June 20; terms of 2/10, n/30.

25 Issued Check 1105 for $1,500 to Juanda's Coat Shop, a creditor, in payment of Invoice 7416 dated May 28.

28 Issued Check 1106 for $6,272 to The Motor Speedway, a creditor, in payment of Invoice 1927 of June 20 ($6,400), less a cash discount ($128).

30 Purchased merchandise for $2,080 from Jogging Shoes Store, Invoice 4713, dated June 26; the terms are 1/10, n/30.

30 Issued Check 1107 for $5,800 to pay the monthly salaries of the employees.

Analyze: Assuming that all relevant information is included in this problem, what total liabilities does the company have at month-end?