Purchase Journal and Accounts Payable Subsidiary Ledger

MJC Revised 5/2012 Page 1

Purchases Journal Page Number: 9

Date

Account

Credited

Purchase

Order

No. Terms Post

Ref.

Accounts

Payable

Cr.

Merchandise

Inventory

Dr.

Other Accounts Dr.

Accounts Post

Ref. Amounts

1

Dec 3 Johnson Dog

Foods

1125 2/10,n/30 √

2,000 2,000

1

2 5

Fox’s Motors

and Trucks √ 20,000

Vehicles-

Delivery

Truck 1021 20,000 2

3 9

Bill Reed Cat

Foods & Toys 1126 2/10,n/30 √ 1,500 1,500 3

4 12

Office

Maximum √ 400

Office

Supplies 1011 400 4

5 15

Green Food

Natural Pet

Foods 1127 n/30 √ 400 400 5

6 20

Big Dog Toy

Suppliers 1128 1/10,n/30 √ 1,100 1,100 6

7 26

Fredrick’s

Animals

Suppliers 1129

1/10,n/30

√ 300 300 7

8 27

Office

Maximum √ 2,500

Equipment

Computer 1022 2,500 8

9 28

Green Food

Natural Pet

Foods 1130 2/10,n/30 √ 1,800 1,800 9

10 30

Johnson Dog

Foods 1131 2/10,n/30 √ 1,200 1,200 10

11 31

Bill Reed Cat

Foods & Toys 1132 2/10,n/30 √ 2,500 2,500 11

12 33,700 10,800 12

13 (2002) (1003) 13

General Ledger Accounts

Office Supplies

1011 Date Ref Debit Credit Bal.

12/12 Purchases PJ 9 400 400

Vehicles-Delivery Trucks

1021 Date Ref Debit Credit Bal.

12/02 Purchases PJ 9 20,000 20,000

Equipment--Computer

1022 Date Ref Debit Credit Bal.

12/27 Purchases PJ 9 2,500 2,500

Merchandise Inventory

1003 Date Ref Debit Credit Bal.

12/31 Purchases PJ 9 10,800 10,800

12/31 Sales SJ 7 6,060 4,740

12/31 Returns GJ 5 180 4,920

Purchase Journal and Accounts Payable Subsidiary Ledger

MJC Revised 5/2012 Page 2

Accounts Payable

2002 Date Ref Debit Credit Bal.

12/31 Purchases PJ 9 33,700 33,700

Accounts Payable Subsidiary Ledger Accounts

Johnson Dog Foods

Date Ref PO Debit Credit Bal.

12/01 2/10,n/30 PJ 9 1125 2,000 2,000

12/30 2/10,n/30 PJ 9 1131 1,200 3,200

Bill Reed Cat Foods & Toys

Date Ref PO Debit Credit Bal.

12/09 2/10,n/30 PJ 9 1126 1,500 1,500

12/31 1132 2,500 4,000

Fredrick’s Animals Supplies

Date Ref PO Debit Credit Bal.

12/26 1/10,n/30 PJ 9 1129 300 300

Big Dog Toy Suppliers

Date Ref PO Debit Credit Bal.

12/20 1/10,n/30 PJ 9 1128 1,100 1,100

Green Food Natural Pet Foods

Date Ref PO Debit Credit Bal.

12/15 n/30 PJ 9 1127 400 400

12/28 2/10,n/30 PJ 9 1130 1,800 2,200

Fox’s Motor’s and Trucks

Date Ref PO Debit Credit Bal.

12/02 PJ 9 20,000 20,000

Office Maximum

Date Ref PO Debit Credit Bal.

12/12 PJ 9 400 400

12/27 PJ 9 2,500 2,900

Purchase Journal and Accounts Payable Subsidiary Ledger

MJC Revised 5/2012 Page 3

Systematic Instructions

Step 1. Start with the basic descriptions of the financial events and journalize those into the purchase journal.

12/3 Morrison Pet Supply Company purchased dog food from its supplier Johnson Dog Foods in the

amount of $2,000 using purchase order 1125. Terms of the sale are 2% discount if the invoice is paid

within the first ten days or the net (whole) amount must be paid within 30 days if the company does not

take advantage of the discount (Terms: 2/10, n/30).

12/5 Morrison Pet Supply Company purchased a truck for delivery services to its customers from Fox’s

Motors and Trucks for the price of $20,000 on account.

12/9 Morrison Pet Supply Company purchased cat food and cat toys from its supplier Bill Reed Cat Foods

& Toys in the amount of $1,500 using purchase order 1126. Terms of the sale are 2/10, n/30.

12/12 Morrison Pet Supply Company purchased office supplies on account to be used in the

administrative offices from Office Maximum in the amount of $400. Terms of the sale are n/30.

12/15 Morrison Pet Supply Company purchased basic cat and dog food from its supplier Green Food

Natural Pet Foods in the amount of $400 using purchase order 1127. Terms of the sale are n/30.

12/20 Morrison Pet Supply Company purchased toys for large dogs from its supplier Big Dog Toy

Suppliers in the amount of $1,100 using purchase order 1128. Terms of the sale are 1/10, n/30.

12/26 Morrison Pet Supply Company purchased collars and leashes from its supplier Fredrich’s Animals

Suppliers in the amount of $300 using purchase order 1129. Terms of the sale are 1/10, n/30.

12/27 Morrison Pet Supply Company purchased a new computer for the office from its supplier Office

Maximum with a cost of $2,500. The computer will be used for the next 5 years and be depreciated

using the straight line method of depreciation. At the end of its useful life it is projected to have a

salvage value of $500. Morrison Pet Supply Company plans on putting this asset into use at the first of

January.

12/28 Morrison Pet Supply Company purchased cat and dog food from its supplier Green Food Natural

Pet Foods in the amount of $1,800 using purchase order 1130. Terms of the sale are 2/10, n/30.

12/30 Morrison Pet Supply Company purchased dog food from its supplier Johnson Dog Foods in the

amount of $1,200 using purchase order 1131. Terms of the sale are 2/10, n/30.

12/31 Morrison Pet Supply Company purchased cat food and cat toys from its supplier Bill Reed Cat

Foods & Toys in the amount of $2,500 using purchase order 1132. Terms of the sale are 2/10, n/30.

Purchase Journal and Accounts Payable Subsidiary Ledger

MJC Revised 5/2012 Page 4

Step 2. You will journalize all of the purchases of inventory by placing the amounts in the columns of “Accounts

Payable Cr. and Merchandise Inventory Dr.” You should record the date in the date column, the

purchase order number in the purchase order no. column, and the suppliers name in the account

credited column for each individual purchase in the order the purchases are made. After each entry is

journalized post the amount in the Accounts Payable Subsidiary Ledger account and place a check mark

in the Posting references column of the purchase journal. At the end of the month total the columns for

Accounts payable and Merchandise Inventory and then post the totals to the general ledger accounts.

Do not post individual line item to the general ledger accounts.

Step 3. For the purchase of office supplies and office equipment you will place the amounts in the columns of

Accounts payable cr. and debit in the other accounts with the name of the office supply company going

into the accounts credited column and the title of the asset account going into the other accounts dr.

column accounts. Each one of these purchases will be posted individual to the general ledger account

with an account number being used for the posting reference column under the other accounts dr. and

a check mark for the posting of the amount to the accounts payable subsidiary ledger account. Post

these items to the general ledger at the time of the purchase.

Step 4. For the purchase of the truck you will record it in the column for accounts payable cr. column and the

other accounts dr. column amounts column. Place the date in the date column, the name of the auto

seller in the account credited column and the title of the asset in the other account dr. accounts column.

Post this item to the general ledger at the time of the purchase.

Step 5. At the end of the financial period (month, biannual, year or fiscal period) total down the columns for

“Accounts Payable Cr.” and “Merchandise Inventory Dr.” then post those totals to the general Ledger.

Place the account numbers under the double underlines in brackets for those two account columns to

denote that those balances were posted to the general ledger.

Note: Posting is the act of copying an amount from the journal to the ledger account. Postings (Ref or F) are

account numbers or the abbreviation for the journal and the page number for the journal. Totaling all of the

amounts in a journal column is called footing a column. General journal columns are not footed.