Question

The following purchase transactions occurred during August for Backcountry Kayak Excursions. Aug 1 Purchased Kevlar kayaks (equipment) for $471 on account from Gear Inc. Aug 6 Purchased kayak paddles (supplies) for $701 on account from Southland Co. Aug 14 Purchased life vests (supplies) for $3,588 on account from Gear Inc. Record these transactions in a purchases journal. If no entry is required, select "no entry" from the dropdown box. If an amount box does not require an entry, leave it blank.Purchases Journal Page 1Date Account Post Ref Accounts Supplies Other Accounts Post. Amount Credited Payable Dr. Dr. Ref Cr. Aug 1 6 14

Answer 1

Answer:

              Backcountry Kayak Excursions - Purchases Journal

          Supplier's                            Payment          Accounts      

Date   account         Item               terms              payable        Inventory

Aug 1  Gear Inc.       Equipment*   On account      $471             $471

Aug 6  Southland    Supplies*       On account      $701             $701

Aug 14 Gear Inc.      Supplies*       On account      $3,558         $3,558

Total                                                                         $4,730          $4,730

Because there is not enough room here, i just recorded the purchases as either equipment or supplies, but you can also record them in a more detailed manner.

• Equipment: Kevlar kayaks
• Supplies: paddles
• Supplies: life vests

The payment terms are either on account or cash purchases. If the purchases are made on cash, they will not increase accounts payable.

Since this is a retailer, the items purchased are allocated to inventory, but in other cases they could be allocated to different departments, e.g. sales, manufacturing, etc.