Acc225 FAP P7-4A Wise Company (Purchases and Cash Disbursement Journal - Periodic Inventory)

Acc225 Fundamental Accounting Principles
P7-4A Wise Company completes these transactions during April of the current year (the terms of all its credit sales are 2/10, n/30).
Apr. 2 Purchased $13,300 of merchandise on credit from Negi Company, invoice dated April 2, terms 2/10, n/60.
3 Sold merchandise on credit to Brooke Sledd, Invoice No. 760, for $3,000 (cost is $2,000).
3 Purchased $1,380 of office supplies on credit from Madison, Inc. Invoice dated April 2, terms n 10 EOM.
4 Issued Check No. 587 to U.S. View for advertising expense, $999.
5 Sold merchandise on credit to Paul Kohr, Invoice No. 761, for $8,000 (cost is $6,500).
6 Received an $85 credit memorandum from Madison, Inc., for the return of some of the office supplies received on April 3.
9 Purchased $11,125 of store equipment on credit from Ned’s Supply, invoice dated April 9, terms n 10 EOM.
11 Sold merchandise on credit to Amy Nilson, Invoice No. 762, for $9,500 (cost is $7,000).
12 Issued Check No. 588 to Negi Company in payment of its April 2 invoice, less the discount.
13 Received payment from Brooke Sledd for the April 3 sale, less the discount.
13 Sold $4,100 of merchandise on credit to Brooke Sledd (cost is $2,600), Invoice No. 763.
14 Received payment from Paul Kohr for the April 5 sale, less the discount.
16 Issued Check No. 589, payable to Payroll, in payment of sales salaries expense for the first half of the month, $9,750. Cashed the check and paid employees.
16 Cash sales for the first half of the month are $50,840 (cost is $33,880). (Cash sales are recorded daily from cash register data but are recorded only twice in this problem to reduce repetitive entries.)
17 Purchased $12,750 of merchandise on credit from Price Company, invoice dated April 17, terms 2 10, n 30.
18 Borrowed $50,000 cash from First State Bank by signing a long-term note payable. 20 Received payment from Amy Nilson for the April 11 sale, less the discount. 20 Purchased $730 of store supplies on credit from Ned’s Supply, invoice dated April 19, terms n 10 EOM.
23 Received a $400 credit memorandum from Price Company for the return of defective merchandise received on April 17.
23 Received payment from Brooke Sledd for the April 13 sale, less the discount. 25 Purchased $10,375 of merchandise on credit from Negi Company, invoice dated April 24, terms 2 10, n 60.
26 Issued Check No. 590 to Price Company in payment of its April 17 invoice, less the return and the discount.
27 Sold $3,070 of merchandise on credit to Paul Kohr, Invoice No. 764 (cost is $2,420).
27 Sold $5,700 of merchandise on credit to Amy Nilson, Invoice No. 765 (cost is $3,305).
30 Issued Check No. 591, payable to Payroll, in payment of the sales salaries expense for the last half of the month, $9,750.
30 Cash sales for the last half of the month are $70,975 (cost is $55,900) Assume that Wise Co. uses the periodic inventory system.

Required:
1. Prepare a general journal, a purchases journal like that in Exhibit 71.3, and a cash disbursements journal like that in Exhibit 7A.4. Number all journal pages as page 3. Review the April transactions of Wise Company (Problem 7-1A) and enter those transactions that should be journalized in the general journal, the purchases journal, or the cash disbursements journal. Ignore any transactions that should be journalized in the sales journal or cash receipts journal.
2. Open the following general ledger accounts: Cash, Inventory, Office Supplies, Store Supplies, Store Equipment, Accounts Payable, Long-term Notes Payable, B. Wise, Capital, Purchases, Purchases Returns and Allowances, Purchases Discounts, Sales Salaries Expense and Advertising Expense. Enter the March 31 balances of Cash ($85,000), Inventory ($125,000), Long-term Notes Payable ($110,000), and B. Wise, Capital ($100,000). Also open accounts payable subsidiary ledger accounts for Ned's Supply, Negi Company, Price Company and Madison Inc.
3. Complete parts 3, 4 and 5 of Problem 7-3A using the results of Parts 1 and 2 of this problem.
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