Following are the transactions for Valdez Services. The company paid $500 cash for payment on a 3-month-old account payable for office supplies. The company paid $2,200 cash for the just-completed two-week salary of the receptionist. The company paid $42,000 cash for equipment purchased. The company paid $200 cash for this month’s utilities. The company paid a $10,500 cash dividend to the owner (sole shareholder). 1. Prepare general journal entries for the above transactions of Valdez Services. 2. Listed below are three reasons why a transaction would not result in an expense. Match each of the reasons to the transaction it properly describes.
Following are the transactions for Valdez Services. The company paid $500 cash for payment on a 3-month-old account payable for office supplies. The company paid $2,200 cash for the just-completed two-week salary of the receptionist. The company paid $42,000 cash for equipment purchased. The company paid $200 cash for this month’s utilities. The company paid a $10,500 cash dividend to the owner (sole shareholder). 1. Prepare general journal entries for the above transactions of Valdez Services. 2. Listed below are three reasons why a transaction would not result in an expense. Match each of the reasons to the transaction it properly describes.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Following are the transactions for Valdez Services.
- The company paid $500 cash for payment on a 3-month-old account payable for office supplies.
- The company paid $2,200 cash for the just-completed two-week salary of the receptionist.
- The company paid $42,000 cash for equipment purchased.
- The company paid $200 cash for this month’s utilities.
- The company paid a $10,500 cash dividend to the owner (sole shareholder).
1. Prepare general
2. Listed below are three reasons why a transaction would not result in an expense. Match each of the reasons to the transaction it properly describes.

Transcribed Image Text:Listed below are three reasons why a transaction would not result in an expense. Match each of the reasons to the transaction it properly
describes.
Reason
This transaction is a distribution of cash to the owner. Even though equity decreased, that decrease did not occur in the process of
providing goods or services to customers.
This transaction decreased cash in settlement of a previously existing liability (equity did not change). Supplies expense is recorded when
assets are used, not necessarily when cash is paid.
This transaction involves the purchase of an asset. The form of the company's assets changed, but total assets did not (and neither did
equity).
Transaction
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education