Question

PRACTICE EXERCISE 11

1. Set up a Purchase Journal for the Bell Athletics Co. of Belleville, ON, using the headings shown in Figure 6.7.

2. Record the following transactions in the Purchase Journal. Add 13% HST to all purchases.

20—
May 2 Bought merchandise from Northland Co., $500; Invoice #78 dated May 1; terms net 10 days.
3 Received invoice for $290 from Panda Suppliers for the purchase of office supplies, $120, and warehouse supplies, $170; Invoice #67 dated May 2; terms net 30 days.
5 Bought furniture for office, $1,450, from Ringer Furniture Co., Invoice #63 dated May 3; terms net 90 days.
6 Received Invoice #98 dated May 5 from Brandon Co. for $783 for purchase of merchandise; terms net 10 days.
10 Bought desktop printer from Ringer Furniture Co. for $750; Invoice #72 dated May 8; terms net 90 days.
14 Received Invoice #33 dated May 13 from Green Tree Printers for $90 for advertising material; terms net 10 days.
14 Bought merchandise, $623, from Northland Co.; Invoice #93 dated May 13; terms net 10 days.
16 Bought one-year insurance policy from Yeung Insurance Co. The premium was $175. Invoice #48 was dated yesterday and showed terms of net 10 days. Assume this insurance policy is tax exempt.
19 Bought new file cabinet, $525, from Ringer Furniture Co.; Invoice #88 dated May 17; terms net 90 days.
20 Received Invoice #174 dated May 18 from Nielson Ltd. for mer­chandise purchased, $916; terms net 30 days.
24 Bought wrapping paper and paper cartons for the warehouse, $230, from Panda Suppliers; terms net 30 days; Invoice #81 dated May 23
29 Bought second-hand truck for the delivery of goods to customers. Harris Trucks Ltd. has sent Invoice #21 for $9,000; terms net 90 days.

3. Total the columns and prove equal debits and credits. See Practice Exercise 12 for posting instructions

Answer 1

Total Columns:

Purchases: $15,187

HST: $1,972.42

Total: $17,159.42

Equal Debits and Credits: The total of debits (purchases) equals the total of credits (HST and purchases with HST), ensuring equality in the journal.

Purchase Journal for Bell Athletics Co.

Date Account Credited Invoice Number Purchases HST Total

Recorded Transactions:

Date Transaction Details Invoice Number Purchases HST Total

May 2 Northland Co. - Merchandise #78 $500 $65 $565

May 3 Panda Suppliers - Office Supplies #67 $120 $15.60 $135.60

May 3 Panda Suppliers - Warehouse Supplies #67 $170 $22.10 $192.10

May 5 Ringer Furniture Co. - Furniture #63 $1,450 $188.50 $1,638.50

May 5 Brandon Co. - Merchandise #98 $783 $101.79 $884.79

May 8 Ringer Furniture Co. - Desktop Printer #72 $750 $97.50 $847.50

May 13 Green Tree Printers - Advertising Material #33 $90 $11.70 $101.70

May 13 Northland Co. - Merchandise #93 $623 $81 $704

May 16 Yeung Insurance Co. - Insurance Premium #48 $175 $0 $175

May 17 Ringer Furniture Co. - File Cabinet #88 $525 $68.25 $593.25

May 18 Nielson Ltd. - Merchandise #174 $916 $119.08 $1,035.08

May 23 Panda Suppliers - Wrapping Paper & Cartons #81 $230 $29.90 $259.90

May 29 Harris Trucks Ltd. - Second-hand Truck #21 $9,000 $1,170 $10,170

Total Columns:

Purchases: $15,187

HST: $1,972.42

Total: $17,159.42

Equal Debits and Credits: The total of debits (purchases) equals the total of credits (HST and purchases with HST), ensuring equality in the journal.