Requirement – 1 Explanation Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company in the course of regular business activities. Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company in the course of regular business activities. nventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company in the course of regular business activities. Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company in the course of regular business activities. Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company in the course of regular business activities. Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system. Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions: Debit , all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities. Credit , all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses. Journal entries of Company D are as follows: a. Issuance of common stock: Date Accounts title and explanation Ref. Debit ($) Credit ($) Cash 3,500 Common stock 3,500 (To record the issuance of common stock) Table (1) Cash is an assets account and it increased the value of asset by $3,500. Hence, debit the cash account for $3,500. Common stock is a component of stockholder’s equity and it increased the value of stockholder’s equity by $3,500. Hence, credit the common stock for $3,500. b. Service performed to a customer in cash: Date Accounts title and explanation Ref. Debit ($) Credit ($) Cash 6,500 Service revenue 6,500 (To record cash received from customer for service) Table (2) Cash is an assets account and it increased the value of asset by $6,500. Hence, debit the cash account for $6,500. Service revenue is a revenue account and it increased the value of stockholder’s equity by $6,500. Hence, credit the service revenue account for $6,500. c. Cash paid to creditors: Date Accounts title and explanation Ref. Debit ($) Credit ($) Accounts payable 4,400 Cash 4,400 (To record cash paid to creditors) Table (3) Accounts payable is a liability account and it decreased the value of liability by $4,400. Hence, debit the accounts payable account by $4,400. Cash is an assets account and it decreased the value of asset by $4,400. Hence, credit the cash account for $4,400. d. Supplies purchased on account: Date Accounts title and explanation Ref. Debit ($) Credit ($) Supplies 1,200 Accounts payable 1,200 (To record purchase of supplies on account) Table (4) Supplies are an assets account and it increased the value of asset by $1,200... Requirement – 2 To determine To prepare: T-accounts for given transaction. Requirement – 3 To determine The closing balance of each account

Financial Accounting Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)

12th Edition

ISBN: 9780134833132

Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

Publisher: PEARSON

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Chapter 2, Problem 2.65BP

Requirement – 1

To determine

To prepare: The journal entries of Company D.

Requirement – 2

To determine

To prepare: T-accounts for given transaction.

Requirement – 3

To determine

The closing balance of each account

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Chapter 2, Problem 2.64BP

Chapter 2, Problem 2.66BP

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E-F:8-14 Defining common receivables terms (Learning Objective 1) Match the terms with their correct definition. Terms 1. Accounts receivable 2. Other receivables 3. Debtor 4. Notes receivable 5. Maturity date 6. Creditor Definitions a. The party to a credit transaction who takes on an obligation/payable. b. The party who receives a receivable and will collect cash in the future.. c. A written promise to pay a specified amount of money at a particular future date. d. The date when the note receivable is due. e. A miscellaneous category that includes any other type of receivable where there is a right to receive cash in the future. f. The right to receive cash in the future from customers for goods sold or for services performed.

Chapter 2 Solutions

Financial Accounting Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)

Ch. 2 - All of the following events at a sandwich shop are...Ch. 2 - Identify the asset from the following list of...Ch. 2 - Amounts owed to a company by its customers would...Ch. 2 - Thorpe Corporation purchases a new delivery truck...Ch. 2 - Adam Corporation issues stock to Cara Riley in...Ch. 2 - Blake Company completed a consulting job and...Ch. 2 - Prob. 7QC Ch. 2 - Accounts Payable had a normal beginning balance of...Ch. 2 - Which of the following debit and credit rules is...Ch. 2 - A companys beginning Cash balance was 8,000. At...

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The journal entries of Company D.

Solution Summary: The author explains the journal entries of Company D. Inventory refers to the stock of goods purchased, utilized and maintained by the company.

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To prepare: The journal entries of Company D.

To prepare: T-accounts for given transaction.

The closing balance of each account

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Chapter 2 Solutions