Question

Big Country Ski Shop is a retail store that sells ski equipment and clothing. Big Country Ski Shop commenced business on September 1, 2019. The firm purchases merchandise on open account. The firm’s purchases, purchase returns and allowances, and cash payments on account during September 2019 follow:

DATE		TRANSACTIONS
2019
Sept.	2	Purchased ski boots for $6,100 plus a freight charge of $260 from Colorado Ski Shop, Invoice 6672, terms n/30.
	3	Purchased skis for $11,700 from Alaska Supply Company, Invoice 5916; terms 2/10, n/30.
	7	Received Credit Memorandum 165 for $950 from Colorado Ski Shop for return of damaged ski boots; the boots were originally purchased September 2 on Invoice 6672.
	11	Purchased ski jackets for $4,500 from Cold Mountain Clothing Company, Invoice 4091, terms n/30.
	12	Issued Check 104 to Alaska Supply Company in payment of Invoice 5916, dated September 3, less the cash discount.
	22	Purchased ski poles for $4,260 plus a freight charge of $145 from Alaska Supply Company, Invoice 5950, terms 3/10, n/30.
	23	Purchased ski pants for $2,750 from Swenson Ski Goods, Invoice 528, terms n/30.
	25	Received Credit Memorandum 245 for $350 from Swenson Ski Goods for return of defective ski pants; the pants were originally purchased September 23 on Invoice 528.
	27	Purchased ski sweaters for $3,100 plus a freight charge of $125 from Colorado Ski Shop, Invoice 6722, terms n/30.
	30	Issued Check 110 to Colorado Ski Shop in payment of Invoice 6672, dated September 2, less the return of September 7.

Required:

Open the general ledger accounts and accounts payable ledger accounts indicated below. Enter the balance of Cash as of September 1, 2019.

Post the entries from the general journal to the appropriate accounts in the general ledger and in the accounts payable ledger.

Prepare a schedule of accounts payable.

GENERAL LEDGER ACCOUNTS

101	Cash, $26,000 Dr.
201	Accounts Payable
501	Purchases
502	Freight In
503	Purchases Returns and Allowances
504	Purchases Discounts

ACCOUNTS PAYABLE LEDGER ACCOUNTS

Alaska Supply Company
Cold Mountain Clothing Company
Colorado Ski Shop
Swenson Ski Goods

Analyze:
What portion of the purchases in September, before purchases returns and allowances and before purchases discounts, were for clothing items? Include ski boots as a clothing item.

Post the transactions to the appropriate accounts in the general ledger.

Cash		Account No: 101			Accounts Payable		Account No: 201
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Sept 1, 2019
Purchases		Account No: 501			Freight In		Account No: 502
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Purchases Returns and Allowances		Account No: 503			Purchases Discounts		Account No: 504
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance

AP Ledgers

Post the transactions to the appropriate accounts in the accounts payable ledger.

Alaska Supply Company		Terms: 3/10, n/30			Cold Mountain Clothing Company		Terms: n/30
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance
Colorado Ski Shop		Terms: n/30			Swenson Ski Goods		Terms: n/30
Date	Debit	Credit	Balance		Date	Debit	Credit	Balance

Prepare a schedule of accounts payable. Compare the balance of the Accounts Payable control account with the total of the schedule.

BIG COUNTRY SKI SHOP
Schedule of Accounts Payable
September 30, 2019
Alaska Supply Company
Cold Mountain Clothing Company
Colorado Ski Shop
Swenson Ski Goods
Total

What portion of the purchases in September, before purchases returns and allowances and before purchases discounts, were for clothing items? Include ski boots as a clothing item.

Portion of clothing items purchased

Answer 1