ABC Company purchased office equipment on credit from XYZ Suppliers on March 15, 2024. The total cost of the equipment was $12,000, including a $2,000 delivery and installation fee. ABC Company made an initial down payment of $3,000 using their business checking account. The remaining balance is to be paid in 30 days. ABC Company uses the perpetual inventory system and follows GAAP (Generally Accepted Accounting Principles). The office equipment is expected to have a useful life of 5 years with no salvage value. ABC Company uses the straight-line depreciation method for all its fixed assets. The company's accounting period ends on December 31st each year. Record the journal entry for the purchase of the office equipment on March 15, 2024. On April 1, 2024, XYZ Corporation paid its quarterly insurance premium of $6,000 for the period from April 1 to June 30. The company uses the accrual basis of accounting. XYZ Corporation's accounting year ends on December 31. The insurance covers general liability and property damage. The premium was paid using the company's business checking account. XYZ Corporation wants to ensure proper expense recognition throughout the coverage period. At the end of April, the accounting department needs to make an adjusting entry. What would be the journal entries for the initial payment on April 1 and the adjusting entry on April 30? On May 15, 2024, ABC Manufacturing Company purchased raw materials on account from Supplier XYZ. The invoice totalled $75,000 for the materials, with terms of 2/10, n/30. ABC Manufacturing uses the perpetual inventory system. On May 23, ABC Manufacturing paid the full amount owed to Supplier XYZ, taking advantage of the discount. Record the journal entries for both the purchase of raw materials on May 15 and the payment on May 23.
ABC Company purchased office equipment on credit from XYZ Suppliers on March 15, 2024. The total cost of the equipment was $12,000, including a $2,000 delivery and installation fee. ABC Company made an initial down payment of $3,000 using their business checking account. The remaining balance is to be paid in 30 days. ABC Company uses the perpetual inventory system and follows GAAP (Generally Accepted Accounting Principles). The office equipment is expected to have a useful life of 5 years with no salvage value. ABC Company uses the straight-line depreciation method for all its fixed assets. The company's accounting period ends on December 31st each year. Record the journal entry for the purchase of the office equipment on March 15, 2024. On April 1, 2024, XYZ Corporation paid its quarterly insurance premium of $6,000 for the period from April 1 to June 30. The company uses the accrual basis of accounting. XYZ Corporation's accounting year ends on December 31. The insurance covers general liability and property damage. The premium was paid using the company's business checking account. XYZ Corporation wants to ensure proper expense recognition throughout the coverage period. At the end of April, the accounting department needs to make an adjusting entry. What would be the journal entries for the initial payment on April 1 and the adjusting entry on April 30? On May 15, 2024, ABC Manufacturing Company purchased raw materials on account from Supplier XYZ. The invoice totalled $75,000 for the materials, with terms of 2/10, n/30. ABC Manufacturing uses the perpetual inventory system. On May 23, ABC Manufacturing paid the full amount owed to Supplier XYZ, taking advantage of the discount. Record the journal entries for both the purchase of raw materials on May 15 and the payment on May 23.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:ABC Company purchased office equipment on credit from XYZ Suppliers on March 15, 2024.
The total cost of the equipment was $12,000, including a $2,000 delivery and installation fee.
ABC Company made an initial down payment of $3,000 using their business checking account.
The remaining balance is to be paid in 30 days. ABC Company uses the perpetual inventory
system and follows GAAP (Generally Accepted Accounting Principles). The office equipment
is expected to have a useful life of 5 years with no salvage value. ABC Company uses the
straight-line depreciation method for all its fixed assets. The company's accounting period
ends on December 31st each year. Record the journal entry for the purchase of the office
equipment on March 15, 2024. On April 1, 2024, XYZ Corporation paid its quarterly insurance
premium of $6,000 for the period from April 1 to June 30. The company uses the accrual basis
of accounting. XYZ Corporation's accounting year ends on December 31. The insurance covers
general liability and property damage. The premium was paid using the company's business
checking account. XYZ Corporation wants to ensure proper expense recognition throughout
the coverage period. At the end of April, the accounting department needs to make an
adjusting entry. What would be the journal entries for the initial payment on April 1 and the
adjusting entry on April 30? On May 15, 2024, ABC Manufacturing Company purchased raw
materials on account from Supplier XYZ. The invoice totalled $75,000 for the materials, with
terms of 2/10, n/30. ABC Manufacturing uses the perpetual inventory system. On May 23,
ABC Manufacturing paid the full amount owed to Supplier XYZ, taking advantage of the
discount. Record the journal entries for both the purchase of raw materials on May 15 and
the payment on May 23.
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