Happy Trails Inc. has a September 1 accounts payable balance of $525, which consist of $340 due Labradore Inc. and $185 due Meow Mart Inc. Transactions related to purchases and cash payments completed by Happy Trails Inc. during the month of September 2012 are as follows:
Sept. 4. Purchased pet supplies from Best Friend Supplies Inc. on account, $230.
6. Issued check No. 345 to Labradore Inc. in payment of account, $340.
13. Purchased pet supplies from Poodle Pals Inc., $660
18. Issued check No 346 to Meow Mart Inc. in payment of account, $185
19. Purchased office equipment from Office Helper Inc. on account, $2,250
23. Issued Check No. 347 to Best Friends supplies Inc. in payment of account from purchase made on Sept 4.
27. Purchased pet supplies from Meow Mart Inc. on account, $350
30. Issued Check No. 348 to Sanders Inc. for cleaning expense, $50
A. Prepare a purchase journal and a cash payments journal to record these transactions. The forms of the journal are similar to those used in the text. Place a check mark in the Post Ref. column to indicate when the accounts payable subsidiary ledger should be postted. Happy Trials Inc. uses the following accounts:
- Cash 11
- Office Equipment 13
- Pet Supplies 14
- Accounts payable 21
- Cleaning Expense 54
B. Prepare a listing of accounts payable subsidiary ledger balances on September 30, 2012. Verify that the total of the accounts payable subsidiary ledger balances equals the balance of the accounts payable control acount on September 30, 2012.
C. Why does Happy Trials use a subsidiary ledger for accounts payable?