The chart of accounts of Dickinson Company includes the following selected accounts.

112 Accounts Receivable.......401 Sales

120 Merchandise Inventory...... 412 Sales Returns and Allowances

126 Supplies...........505 Cost of Goods Sold

157 Equipment..........610 Advertising Expense

201 Accounts Payable

In May the following selected transactions were completed. All purchases and sales were on account except as indicated. The cost of all merchandise sold was 60% of the sales price.

May 2 Purchased merchandise from Older Company $5,000.

3 Received freight bill from Fast Freight on Older purchase $250.

5 Sales were made to May Company $1,300, Coen Bros. $1,800, and Lucy Company $1,000.

8 Purchased merchandise from Wolfe Company $5,400 and Zig Company $3,000.

10 Received credit on merchandise returned to Zig Company $350.

15 Purchased supplies from Michelle’s Supplies $600.

16 Purchased merchandise from Older Company $3,100, and Wolfe Company $4,800.

17 Returned supplies to Michelle’s Supplies, receiving credit $70. (Hint: Credit Supplies.)

18 Received freight bills on May 16 purchases from Fast Freight $325.

20 Returned merchandise to Older Company receiving credit $200.

23 Made sales to Coen Bros. $1,600 and to Lucy Company $2,500.

25 Received bill for advertising from Ole Advertising $620.

26 Granted allowance to Lucy Company for merchandise damaged in shipment $140.

28 Purchased equipment from Michelle’s Supplies $400.

Instructions

(a) Journalize the transactions above in a purchases journal, a sales journal, and a general journal. The purchases journal should have the following column headings: Date, Account Credited (Debited), Ref., Accounts Payable Cr., Merchandise Inventory Dr., and Other Accounts Dr.

(b) Post to both the general and subsidiary ledger accounts. (Assume that all accounts have zero beginning balances.)

(c) Prove the agreement of the control and subsidiary accounts.