Question

Peachtree Company uses a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, and a general journal. The following transactions occur in the month of May.

May
01 Purchased $11,200 of merchandise on credit from Krause, Inc., terms n/30. Purchases journal May
08 Sold merchandise costing $2,000 to G. Seles for $3,300 on credit subject to a $52 sales discount if paid by the end of the month.
May
14 Purchased $350 of store supplies from Chang Company on credit, terms n/30.
May
17 Purchased $370 of office supplies on credit from Monder Company, terms n/30.
May
24 Sold merchandise costing $675 to D. Air for $1,010 cash.
May
28 Purchased store supplies from Porter’s for $112 cash.
May
29 Paid Krause, Inc., $11,200 cash for the merchandise purchased on May 1.

Required:
Journalize the May transactions that should be recorded in the purchases journal assuming the perpetual inventory system is used.

Answer 1

Answer:

May 01

Merchandise $11,200 (debit)

Account Payable: Krause, Inc. $11,200 (credit)

May 14

Store Supplies $350 (debit)

Accounts Payable :Chang Company $350 (credit)

May 17

Store Supplies $370 (debit)

Accounts Payable :Chang Company $370 (credit)

May 28

Account Payable: Krause, Inc. $11,200 (debit)

Cash $11,200 (credit)

Explanation:

The Purchase Journal Contains a list of Companies Creditors.

So, record only those transaction the Company had with Accounts Payable or Creditors.