Chapter 3, Problem 10E

Recording Journal Entries and Determining Net Income

Sysco, formed in 1969, is America’s largest marketer and distributor of food service products, serving nearly 250,000 restaurants, hotels, schools, hospitals, and other institutions. The following transactions are typical of those that occurred in a recent year, but the amounts are simplified.

1. a. Borrowed $80,000 from a hank, signing a short-term note payable.
2. b. Provided $100,000 in service to customers, with $95,000 on account and the rest received in cash.
3. c. Purchased equipment for $130,000 in cash.
4. d. Paid employee wages of $1,000.
5. e. Received $410 on account from a customer.
6. f. Paid $4,000 cash for travel costs during the year.
7. g. Paid $8,200 cash on accounts payable.
8. h. Incurred $20,000 in utility expenses during the year, of which $15,000 was paid in cash and the rest owed on account.

Required:

For each of the transactions, prepare accrual basis journal entries and determine whether the accounting equation remains in balance and debits equal credits after each entry. Also, calculate the company’s preliminary net income.