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Chapter 11, End of Chapter, Self-Study Demonstration Problem, Exercise 1

# Jodi Rutman operates a retail pharmacy called Rutman Pharmacy. The books include a general journal, a general ledger, and an accounts payable ledger. The following transactions are related to purchases and cash payments for the month of June 20--: Enter the transactions in a general journal (start with page 7).

### Explanation

Image 1:

Entry 1:

Purchases are debited for \$234.20 with accounts payable/SC credited for \$234.20. This was done because a purchase was made and not paid for, but was paid on account.

Entry 2:

Rent expense is debited for \$1,000 and cash is credited for \$1,000. This was done because the monthly rent was paid for in cash.

Entry 3:

Purchases are debited for \$562.40 with accounts payable/ADS credited for \$562.40. This was done because a purchase was made and not paid for, but was paid on account.

Entry 4:

Purchases are debited for \$367.35 with accounts payable/UDC credited for \$367.35. This was done because a purchase was made and not paid for, but was paid on account.

Entry 5:

Accounts payable/SC is debited for \$234.20. Cash is credited for \$229.52 and purchases discounts is credited for \$4.68. This was done because the money owed on the account was paid off in cash and the company took advantage of the purchase discount offered.

Entry 6:

Accounts payable/ADS is debited for \$46.20. Purchases returns and allowances  is credited for \$46.20. This was done because merchandise was returned.

Entry 7:

Purchases are debited for \$479.40 with accounts payable/MDC credited for \$479.40. This was done because a purchase was made and not paid for, but was paid on account.

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Entry 8:

Accounts payable/UDC is debited for \$53.70. Purchases returns and allowances  is credited for \$53.70. This was done because merchandise was returned.

Entry 9:

Accounts payable/ADS is debited for \$516.20. Cash is credited for \$511.04 and purchases discounts is credited for \$5.16. This was done because the money owed on the account was paid off in cash and the company took advantage of the purchase discount offered.

Entry 10:

Accounts payable/MDC is debited for \$479.40. Cash is credited for \$469.81 and purchases discounts is credited for \$9.59. This was done because the money owed on the account was paid off in cash and the company took advantage of the purchase discount offered.

Entry 11:

Purchases are debited for \$638.47 with accounts payable/FP credited for \$638.47. This was done because a purchase was made and not paid for, but was paid on account.

Entry 12:

Purchases are debited for \$270.20 with cash credited for \$270.20. This was done because a purchase was made with cash.

Entry 13:

Accounts payable/MDC is debited for \$1,217.69. Cash is credited for \$1,217.69.. This was done because the money owed on the account was paid off in cash.

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