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Chapter 9

Chapter 9. Journalizing Purchases and Cash Payments. Merchandising Business. Retail and Wholesale Merchandising Businesses. Special Journal. Because things are more confusing to a corporation we have to spread things out to make it easier to understand.

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Chapter 9

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  1. Chapter 9 Journalizing Purchases and Cash Payments

  2. Merchandising Business • Retail and Wholesale Merchandising Businesses

  3. Special Journal • Because things are more confusing to a corporation we have to spread things out to make it easier to understand. • We use 5 separate journals to help record • Purchases • Cash Payments • Sales • Cash Receipts

  4. How do they get that price 60.00 • Cost of Merchandise • Plus Markup 60% • Cost to you……… 24.00 84.00

  5. Special amount columns

  6. Purchased merchandise on account from Pro golf company $7254.00. Purchase Invoice No. 179

  7. Please work on Aplia “On your Own”

  8. Journalizing Cash Payments Using Cash Payments Journal Section 9-2

  9. Terms you need to know • Cash Payment Journal • Whenever cash is paid • Cash Discount • A deduction from the original amount when cash is paid also called Purchase Discount

  10. Paid Cash for Advertising $150.00 Check 292

  11. Paid Cash for office supplies $94.00 Check No. 293

  12. Purchasing Merchandise • WHENEVER YOU SEE THE WORD MERCHANDISE!!!!!! You will use the Purchase account in some fashion.

  13. What happens when we get a discount? • A discount is a reduction in price because of a agreement in contract. • Trade discount • Used when we purchase different amounts • 10 for $20 • 20 for $10 • Trade discounts • $1500 x 60% = $900.00 • 1500 – 900 = $600

  14. Nov. 7. Purchased merchandise for cash, $600.00. Check No. 301

  15. Purchase Discount • Purchase discount is a contra- account • An account that reduces a related account on a financial statement. • Can you name any others

  16. Nov 8. Paid cash on account to Gulf Craft Supply $488.04, covering Purchase invoice No. 82 for $498.00, less 2% discount, $9.96 Check No. 302

  17. Paid cash on account NO DISCOUNTPaid cash on account to American Paint $2,650 covering Purchase No. 77 Check No. 303

  18. Performing Additional Cash Payments Journal Operations 9-3

  19. PETTY CASH FUND REPORT

  20. JOURNALIZING THE PETTY CASH REPORT November 18 Paid cash to replenish the petty cash fund$208: office supplies #32.33, advertising , $50.00; miscellaneous, $128.50, cash short 1.59 check no 310

  21. Section 4Journalizing other transaction s using a general journal • When a transaction does not fit • i.e. When we buy supplies on account or when we buy something don’t like it and return it. It doesn’t fit the criteria of the last two journals • Purchases and cash payments so it must go into the General Journal.

  22. November 6. Bought supplies on account from Gulf Craft Supply, $210.00. Memorandum No. 52.

  23. Purchase Return and Allowance – Contra Account to Purchases

  24. Purchase Return and allowanceNovember 28. Returned merchandise to Crown Distributing, $252.0, covering Purchase Invoice No. 80

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