How to finish this question? Exercise 5.3: The following cash payments relate to

Question

How to finish this question? Exercise 5.3: The following cash payments relate to Botta's Bike Repairs: 2005 Apr 1 2 3 4 5 Purchased stock for cash $120 (Chq. 6101) The owner withdrew $200 (Cha 6102) and an advertising bill of $250 was paid (Chq, 6103) Paid assistant's wages $100 (Chq 6104) Stock items bought for cash (Chq. 6105) $80 Paid Creditor- B. Spoke $300 on account (Chq 6106) and cashed a cheque for the owner's personal use $100 (Chq. 6107) Stock bought for cash $220 (Chq, 6108) 6 Enter the above transactions in a cash payments journal (simple version). a b Post the journal to the general ledger of Botta's Bike Repairs.

Explanation / Answer

a. Cah Payments Journal (Simple version)

b. General Ledger

c. Yes. A multi-column cash payments journal would help Botta's Bike Repair in organizing its cash payment transactions. Separate columns for various accounts debited such as stock, advertising expenses, wages expense, accounts payable, etc. can be maintained. The transaction totals for each account debited can then be posted to the general ledger accounts at a defined periodicity such as weekly or monthly thereby reducing the effort involved in maintaining its accounts. and also providing ease in tracing transactions from journal to ledger.

BOTTA'S BIKE REPAIR CASH PAYMENTS JOURNAL DATE Check No. Account Debited Post. Ref. Amount Paid 2005 Apr. 1 6101 Stock 120 Apr. 2 6102 Owner's Drawings 200 Apr. 2 6103 Advertising expense 250 Apr. 3 6104 Wages expense 100 Apr. 4 6105 Stock 80 Apr. 5 6106 B. Spoke 300 Apr. 5 6107 Owner's Drawings 100 Apr. 6 6108 Stock 220 Total payments $ 1370

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