Chapter 4, Problem 4.20E

Exercise 4.20

LO 6, 7

Transaction analysis using T-accounts This exercise provides practice in understanding the operation of T-accounts and transaction analysis. For each situation, you must solve for a missing amount. Use a T-account for the balance sheet account, show in a horizontal model, or prepare journal entries for the information provided. In each case, there is only one debit entry and one credit entry in the account during the month.

Example:

Accounts Payable had a balance of $6.000 at the beginning of the month and $5,400 at the end of the month. During the

month, payments to suppliers amounted to $16,000. Calculate the purchases on account during the month.

Solution:

Accounts Payable
	Beginning		Dr. Accounts	Dr. Inventory	15.400
	balance	6,000	Payable .... 16,000	Cr. Accounts
Payment 16,000	Purchase	?=15,400	Cr. Cash ....

16,000Payable15.400 Ending Payments to suppliers. Purchases on account. balance 5,400

1. Accounts Receivable had a balance of $8,100 at the beginning of the month and $3,300 at the end of the month. Credit sales totaled $45,000 during the month. Calculate the cash collected from customers during the month, assuming that all sales were made on account.
2. The Supplies account had a balance of $17,500 at the beginning of the month and $23,300 at the end of the month. The cost of supplies used during the month was $76,100. Calculate the cost of supplies purchased during the month.
3. Wages Payable had a balance of $15,200 at the beginning of the month. During the month, $62,000 of wages were paid to employees. Wages Expense accrued during the month totaled $78,000. Calculate the balance of Wages Payable at the end of the month.