Proving Cash a. When does a business that uses special journals update the Cash in Bank

Recording Transactions in the Purchases Journal The Design Den, a retail merchandising business, uses special journals. On page 3 of the purchases journal in the working papers, record the following purchases:

Preparing a Cash Proof Apple Tree Boutique uses special journals. On September 30 the total of the Cash in Bank Debit column of the cash receipts journal is $18,750.12. The total of the Cash in Bank Credit column of the cash payments journal is $16,890.43. The checkbook balance on September 30 is $5,610.59. Instructions Prepare a cash proof for September in your working papers. The balance of Cash in Bank on September 1 is $3,750.90.

Analyzing aSource Document The Country Peddler, which is a retail merchandising business, had the following transaction that occurred on November 2. Instructions Analyze Check Stub 104 that is shown here. In your working papers, make the necessary entry to record the transaction on page 11 of the cash payments journal.

Purchases and Cash Payments Journals a. What are the source documents for the purchases journal? b. What are the source documents for the cash payments journal?

Recording Transactions a. List the steps to record transactions in the purchases journal. b. Bank service charges are automatically deducted from the bank account. Why are these charges recorded in the cash payments journal?

Recording Payroll Payments a. Where do you find the information for recording payroll transactions in the cash payments journal? b. In recording payroll, what four liabilities are entered in the General Credit column of the cash payments journal?

Posting from Special Journals a. When are purchases transactions posted to the accounts payable subsidiary ledger? Why? b. When are cash payments transactions posted to the accounts payable subsidiary ledger? Why?

Totaling, Proving, and Ruling a. When totaling, proving, and ruling the purchases journal, where are the double rules placed? b. What does the check mark (?) in the first Posting Reference column indicate?

Schedule of Accounts Payable a. What information does the schedule of accounts payable include? b. With what account in the general ledger must the total of the schedule of accounts payable agree when proving the accounts payable subsidiary ledger?

Proving Cash a. When does a business that uses special journals update the Cash in Bank account in the general ledger? b. How does an accountant prove cash?

Recording Payment of the Payroll Denardo’s Country Store pays its employees on a biweekly basis. This week the payroll is $2,000. You issued Check 949 for $1,487 in payment of the payroll less the following amounts: Employees’ Federal Income Tax, $320; Employees’ State Income Tax, $40; Social Security Tax, $124; and Medicare Tax, $29. Instructions In your working papers, record the July 15 payroll on page 4 of the cash payments journal. Calculate the total deductions from employees’ wages for federal, state, social security, and Medicare taxes. What percentage of gross payroll is this amount?

Recording Transactions in the Purchases Journal Sunset Surfwear had the following purchases transactions for the month of July. Instructions Use the purchases journal in your working papers. 1. Record each of the following transactions on page 4 of the purchases journal. 2. Foot, prove, total, and rule the purchases journal. Calculate the total purchases on account for the month.

Recording and Posting Purchases Shutterbug Cameras, a retail merchandising business, had the following purchases on account for the month of July. In the working papers, the beginning balances in the accounts are opened for you. Instructions In your working papers: 1. Record July’s transactions on page 18 of the purchases journal. 2. Post to the accounts payable subsidiary ledger accounts daily. 3. Post amounts entered in the General Debit column daily. 4. Foot, prove, total, and rule the purchases journal at the end of the month. 5. Post the column totals at the end of the month to the account named in the column heading. 6. Prepare a schedule of accounts payable. Explain what problems would occur if the transaction of July 23 (Photo Emporium) was posted to the accounts payable subsidiary ledger as $60.

Recording and Posting Cash Payments River’s Edge Canoe & Kayak is a retail merchandising business located in Jackson Hole, Wyoming. The beginning balances of the accounts needed to complete this problem are opened in your working papers. Instructions In your working papers: 1. Record the transactions on page 19 of the cash payments journal. 2. Post the individual amounts in the Accounts Payable Credit column on a daily basis to the creditors’ accounts. 3. Post the individual amounts in the General Debit and Credit columns on the date the transaction occurred. 4. Foot, prove, total, and rule the cash payments journal. 5. Post the column totals at the end of the month. 6. Prepare a schedule of accounts payable. 7. Prove cash at the end of the month. The beginning Cash in Bank balance was $8,000; cash receipts were $7,000; and the ending check stub balance is $8,402. Identify the amount that River’s Edge owes its creditors at month end.

Recording and Posting Purchases and Cash Payments Buzz Newsstand had the following purchases and cash payment transactions for July. The balance in the accounts payable subsidiary ledger and general ledger accounts are opened in the working papers. Instructions In your working papers: 1. Record the purchases and cash payment transactions on page 12 of the purchases journal and page 12 of the cash payments journal. 2. Post to the creditors’ accounts in the accounts payable subsidiary ledger daily. 3. Post from the General Debit and Credit columns of the journals on the date the transaction occurred. 4. Foot, prove, total, and rule both journals. 5. Post the column totals of the purchases journal to the general ledger accounts named in the column headings. 6. Post the column totals of the cash payments journal to the general ledger accounts named in the column headings. 7. Prepare a schedule of accounts payable. 8. Prepare a cash proof at the end of the month. The beginning Cash in Bank balance was $9,000. Cash receipts were $10,500. The check stub balance on July 31 is $10,178. Examine the purchases made during July and determine the dollar amount by which merchandise inventory increased.