Sept. 1 The Corporation issued 20,000 shares of capital stock to Elizabeth Carver in exchange for her investment of Birr 50,000 cash which she had saved over a period of years. Sept. 10 purchased a small office building located on a large lot for a total price of Birr 182,000, of which Birr 106,000 was applicable to the land and Birr76, 000 to the building. A cash payment of Birr 36,500 was made and a note payable was issued for the balance of the purchase price. Sept. 15 purchased a microcomputer system from Computer Stores Inc., for Birr 1,680 cash. Sept. 19 Purchased office furniture, filing cabinets and a typewriter from Davidson Office Supply Company at a cost of Birr 3,960. A cash down payment of Birr 720 was made, the balance to be paid in three equal installments due September 28, October 28, and November 28. The purchase was on open account and did not require signing of a promissory note. Sept. 26 A Birr 140 monitor in the microcomputer system purchased on September 15 stopped working. The monitor was returned to Computer Stores Inc., which promised to refund the Birr140 within five days. Sept. 28 Paid Davidson Office Supply Company Birr 1,080 cash as the first installment due on the accounts payable for office equipment Sept. 30 Received Birr 140 cash form computer Stores Inc., in full settlement of the account receivable created on September 26. REQUIRED: Prepare journal entries to record the above transactions in the firm’s General Journal. Select the appropriate account, post the above transactions to accounts in the ledger and show there balance by using T-account.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sept. 1 The Corporation issued 20,000 shares of capital stock to Elizabeth Carver in exchange for her investment of Birr 50,000 cash which she had saved over a period of years. Sept. 10 purchased a small office building located on a large lot for a total price of Birr 182,000, of which Birr 106,000 was applicable to the land and Birr76, 000 to the building. A cash payment of Birr 36,500 was made and a note payable was issued for the balance of the purchase price. Sept. 15 purchased a microcomputer system from Computer Stores Inc., for Birr 1,680 cash. Sept. 19 Purchased office furniture, filing cabinets and a typewriter from Davidson Office Supply Company at a cost of Birr 3,960. A cash down payment of Birr 720 was made, the balance to be paid in three equal installments due September 28, October 28, and November 28. The purchase was on open account and did not require signing of a promissory note. Sept. 26 A Birr 140 monitor in the microcomputer system purchased on September 15 stopped working. The monitor was returned to Computer Stores Inc., which promised to refund the Birr140 within five days. Sept. 28 Paid Davidson Office Supply Company Birr 1,080 cash as the first installment due on the accounts payable for office equipment Sept. 30 Received Birr 140 cash form computer Stores Inc., in full settlement of the account receivable created on September 26. REQUIRED: Prepare journal entries to record the above transactions in the firm’s General Journal. Select the appropriate account, post the above transactions to accounts in the ledger and show there balance by using T-account.

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