Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 16

Purchases and cash payments journals
Happy Tails Inc. has a June 1, 2016 accounts payable balance of $600, which consists of $360 due Labradore Inc. and $ 240 due Meow Mart Inc. Transactions related to purchases and cash payments completed by Happy Tails Inc. during the month of June 2016 are as follows:

a. Prepare a purchases journal and a cash payments journal to record these transactions. The forms of the journals 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 posted. Happy Tails Inc. uses the following accounts:

b. Prepare a listing of accounts payable creditor balances on June 30, 2016. Verify that the total of the accounts payable creditor balances equals the balance of the accounts payable controlling account on June 30, 2016.
c. Why does Happy Tails Inc. use a subsidiary ledger for accounts payable