Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 4, Problem 4.1E
Transaction Analysis. The following transactions are taken from the books of Miller Manufacturing.
- a. Bought office equipment with cash, $30,000.
- b. Bought supplies on credit from a vendor, $15,000.
- c. Sold goods for cash, $40,000 (ignore the inventory and cost of goods sold entry of this transaction).
- d. Bought raw materials from a supplier on account, $22,000.
- e. Sold goods to customers on account, $65,000 (ignore the inventory and cost of goods sold entry of this transaction).
- f. Purchased raw materials by issuing a note payable, $14,000.
- g. Paid cash toward note payable balance, $4,000.
- h. Received cash from customer to apply to credit account balance, $3,000.
- i. Paid for accounting and legal fees in cash, $5,000
- j. Paid salaries in cash, $12,000.
Show the effect of each transaction on assets, liabilities, and equity using the
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Suppose your company sells goods for $300, of which $200 is received in cash and $100 is on account. The goods cost your company $125 and were paid for in a previous period. Your company also recorded salaries and wages of $70, of which only $30 has been paid in cash.
prepare journal entries
a) Record the sales revenue of $200 for cash and $100 on account and record the cost of goods sold of $125 using one journal entry.
b) Record the salaries and wages expense of $70.
Delta Company sells goods and performs services for its customers. On May 1, 2021 "Accounts Receivable" had a debit balance of $150. During the month of May the following transactions occurred.
Date Transaction description
May 5 Sold goods to customer A on credit for $400, 2/10, n/30
May 8 Performed services for customer B for $200 cash
May 12 Customer A returned goods with a sales price for $100
May13 Received payment from customer A for the balance due
May 17 Performed services for customer C and billed the customer $100
May20 Received a partial payment of $80 from customer C
Required:
(a) Prepare the journal entries for the above transactions (Ignore COGS)
(b) What is the balance of Accounts Receivable on May 31
Solution
(a)
Date Account title $
May5 Dr.________ ___
Cr.______ ___
Date Account title $
May 8 Dr.________ ___
Cr.______ ___
Date Account title $…
Journalize entries for the following related transactions of Lilly Heating & Air Company. Refer to the Chart of Accounts for the exact wording of account titles.
A.
Purchased $36,000 of merchandise from Schell Co. on account, terms 1/10, n/30.
B.
Paid the amount owed on the invoice within the discount period.
C.
Discovered that $9,000 of the merchandise purchased in (A) was defective and returned items, receiving credit.
D.
Purchased $5,000 of merchandise from Schell Co. on account, terms n/30.
E.
Received a refund from Schell Co. for return in (C) less the purchase in (D).
CHART OF ACCOUNTS
Lilly Heating & Air Company
General Ledger
ASSETS
110
Cash
120
Accounts Receivable
125
Notes Receivable
130
Inventory
140
Office Supplies
141
Store Supplies
142
Prepaid Insurance
180
Land
192
Store Equipment
193
Accumulated Depreciation-Store Equipment
194
Office Equipment
195
Accumulated Depreciation-Office Equipment…
Chapter 4 Solutions
Intermediate Accounting (2nd Edition)
Ch. 4 - Prob. 4.1QCh. 4 - ShoeBuy uses reversing entries for events such as...Ch. 4 - What is equity? What are the three components of...Ch. 4 - Prob. 4.4QCh. 4 - Will all transactions have a dual effect on the...Ch. 4 - Prob. 4.6QCh. 4 - What is meant by the term normal balance? Provide...Ch. 4 - Why is the general journal referred to as the book...Ch. 4 - Are account balances found in the general ledger?...Ch. 4 - What is the purpose of an unadjusted trial...
Ch. 4 - Explain the difference between the accrual basis...Ch. 4 - Under the accrual basis of accounting when do...Ch. 4 - Why are adjusting journal entries made? When do...Ch. 4 - What is a deferred revenue? When will the full...Ch. 4 - What is the purpose of the adjusted trial...Ch. 4 - Which statements can be prepared from the adjusted...Ch. 4 - Prob. 4.17QCh. 4 - Jefferson, CPAs provides accounting services for a...Ch. 4 - Gates Accounting Services (GAS), a sole...Ch. 4 - Prob. 4.3MCCh. 4 - State University sold all of its basketball...Ch. 4 - Prob. 4.5MCCh. 4 - Sampson Manufacturing Company (SMC) has an empty...Ch. 4 - On July 15, Year 1, Southeastern University hired...Ch. 4 - Embree Corp. purchased a four-year insurance...Ch. 4 - The Cougars football team sells season tickets in...Ch. 4 - Prob. 4.10MCCh. 4 - Prob. 4.1BECh. 4 - Transaction Analysis. Florences Floral...Ch. 4 - Journal Entries. Using the information provided in...Ch. 4 - Transaction Analysis; Journal Entries. Cals...Ch. 4 - Transaction Analysis; Journal Entries. Using the...Ch. 4 - Journal Entries; T-accounts. Using the information...Ch. 4 - Retained Earnings. In its first year of...Ch. 4 - Retained Earnings. Using the information provided...Ch. 4 - Prob. 4.9BECh. 4 - Prob. 4.10BECh. 4 - Adjusting Journal Entries. Barnard and Associates...Ch. 4 - Prob. 4.12BECh. 4 - Prob. 4.13BECh. 4 - Prob. 4.14BECh. 4 - Prob. 4.15BECh. 4 - Closing Entries. Using the information provided in...Ch. 4 - Closing Entries. At year-end Nelsons Nursery, Inc...Ch. 4 - Closing Entries. Readers, Inc., an online...Ch. 4 - Adjusting Journal Entries. Barnard and Associates...Ch. 4 - Prob. 4.20BECh. 4 - Adjusting Journal Entries. Gerhard News collects...Ch. 4 - Prob. 4.22BECh. 4 - Prob. 4.23BECh. 4 - Prob. 4.24BECh. 4 - Transaction Analysis. The following transactions...Ch. 4 - Prob. 4.2ECh. 4 - Transaction Analysis; Journal Entries. Master Mind...Ch. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Posting to the General Ledger. Using the...Ch. 4 - Preparing Journal Entries in the General Journal....Ch. 4 - Preparing the T-accounts. Using the information...Ch. 4 - Transaction Analysis: Journal Entries and Posting...Ch. 4 - Transaction Analysis: Journal Entries and Posting...Ch. 4 - Prob. 4.11ECh. 4 - Adjusting Journal Entries: T-accounts. Fanatical...Ch. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Adjusting Journal Entries; Adjusted Trial Balance....Ch. 4 - Preparing Financial Statements. Using the adjusted...Ch. 4 - Prob. 4.20ECh. 4 - Prob. 4.21ECh. 4 - Closing Entries. Diane s Dairy Sales Delivery...Ch. 4 - Prob. 4.23ECh. 4 - Prob. 4.24ECh. 4 - Transaction Analysis; Journal Entries; Adjusting...Ch. 4 - Transaction Analysis; Journal Entries; Adjusting...Ch. 4 - Journal Entries; Post to the General Ledger;...Ch. 4 - Prob. 4.4PCh. 4 - Prob. 4.5PCh. 4 - Journal Entries; Post to the General Ledger;...Ch. 4 - Preparing the Trial Balance; Adjusting Journal...Ch. 4 - Transaction Analysis; Journal Entries; Adjusting...Ch. 4 - Closing Process. Using the information in P4-6 and...Ch. 4 - Closing Process. Sherlock Locksmiths, Inc has the...Ch. 4 - Transaction Analysis; Journal Entries, Posting,...Ch. 4 - Transaction Analysis; Journal Entries, Posting,...
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- Jones Company, a customer, has been authorized to return $1,000 of goods purchased on account. The journal entry to record this transaction is a. Sales Returns and Allowances 1,000 Accounts Receivable 1,000 b. Sales 1,000 Sales Returns and Allowances 1,000 c. Accounts Receivable 1,000 Sales Returns and Allowances 1,000 d. Sales Returns and Allowances 1,000 Inventory 1,000arrow_forwardOn 1 May, the accounts receivable subsidiary ledger of Gerome Ltd had the following balances: Jackson Ltd $7,580 and PCW Ltd $7,860. The following transactions occurred during May: 2 May Sold goods on credit to PCW Ltd for $1,700. 4 May Sold goods on credit to Garden Supplies for $550. 10 May Received cash from Garden Supplies $550. 14 May Sold goods on credit to Jackson Ltd for $1,500. 22 May PCW Ltd paid in full and received $260 discount allowed. Required: (ignore GST and COGS for this question) Enter the opening balances and post the transactions to the control and subsidiary ledger accounts. Gerome Ltd Accounts Receivable Control Account Date Account Debit Credit Balance Accounts Receivable Subsidiary Ledger Jackson Ltd Date Account Debit Credit Balance Garden Supplies Date Account…arrow_forwardJournalize the entries for the following transactions. Refer to the Chart of Accounts for exact wording of account titles. (Note: The company uses a clearinghouse to take care of all bank as well as non-bank credit cards used by its customers. ) A. Sold merchandise for cash, $27,700. The cost of the goods sold was $14,681. B. Sold merchandise on account, $250,000. The cost of the merchandise sold was $132,500. C. Sold merchandise to customers who used MasterCard and VISA, $161,700. The cost of the merchandise sold was $85,701. D. Sold merchandise to customers who used American Express, $72,000. The cost of the merchandise sold was $38,160. E. Received an invoice from National Clearing House Credit Co. for $8,610, representing a service fee paid for processing MasterCard, VISA, and American Express sales. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Inventory 131 Estimated Returns…arrow_forward
- Sales-related transactions, including the use of credit cards Journalize the entries for the following transactions: A. Sold merchandise for cash, $25,000. The cost of the goods sold was $17,500. B. Sold merchandise on account. $98,000. The cost of the goods sold was $58,800. C. Sold merchandise to customers who used MasterCard and VISA, $475,000. The cost of the goods sold was $280,000. D. Sold merchandise to customers who used American Express, $63,000. The cost of the goods sold was $39,000. E. Received an invoice from National Clearing House Credit Co. for $13,450 representing a service fee paid for processing MasterCard , VISA, and American Express Sales.arrow_forwardThe following transactions pertain to Maram Merchandising Company: 1. The company invested $50,000 cash in Reef branch. 2. The company shipped merchandise to Reef branch costs $80,000. 3. Furniture was acquired by Reef Branch for $30,000 to be carried in home office accounting records. 4. Reef branch purchases $20,000 of merchandise from a supplier on the account. 5. Reef branch sold merchandise by $100,000, and the COGS was $70,000 6. Reef branch paid $10,000 from Maram account payable balance. 7. Maram Company paid the total balance of branch accounts payable to the supplier. 8. Reef branch collects $60.000 from the totol balance of its account receivables. 9. Reef paid $5,000 of operating expenses. 10. Maram paid $3.000 of branch operating expenses. 11. Reef transfer $25.000 to Maram. Instructions: Prepare the journal entries for both companies.arrow_forwardThe following journal entry was included in the accounting records of Ostrosky Corporation on March 20: Debit Accounts payable $4,000, Credit Merchandise Inventory $40, Credit Cash $3,960 Based on this journal entry, it is likely that the company: A. Sold inventory for cash B. Collected cash for the inventory sold on credit and recorded a 1% sales discount C. Purchased inventory for cash D. Paid for the inventory purchased on credit and took advantage of the 1% purchase discountarrow_forward
- am. 16.arrow_forwardLi Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Journalize the following transactions that should be recorded in the cash receipts journal. May 1 C. Li, the owner, contributed $9,400 cash to the company. May 7 The company purchased $5,400 of merchandise on credit from Gomez, terms n/30. May 9 The company sold merchandise costing $500 to E. James for $600 on credit, terms n/10.. May 15 The company borrowed $2,000 cash by signing a note payable to the bank. May 18 The company received $600 cash from E. James in payment of the May 9 purchase. May 24 The company sold merchandise costing $250 to B. Cox for $300 cash. CASH RECEIPTS JOURNAL Date Account Credited Cash Debit Sales Discount Debit Accounts Receivable Credit Other Accounts Sales Credit Credit Cost of Goods Sold Debit Inventory Credit 13arrow_forwardLi Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, andgeneral journal. Prepare a cash receipts journal . Journalize the following transactionsthat should be recorded in the cash receipts journal.May 1 C. Li, the owner, contributed $9,000 cash to the company.7 The company purchased $5,000 of merchandise on credit from Gomez, terms n/30.9 The company sold merchandise costing $400 to E. James for $500 on credit, terms n/10.15 The company borrowed $1,000 cash by signing a note payable to the bank.18 The company received $500 cash from E. James in payment of the May 9 purchase.24 The company sold merchandise costing $150 to B. Cox for $200 cash.arrow_forward
- Li Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal and general journal. Prepare a cash receipts journal like the one in Exhibit 7.7. Journalize the following transactions that should be recorded in the cash receipts journal. May 1. C. Li the owner, contributed $9000 cash to the company. May 7. The company purchased $5000 of merchandise on credit from Gomez, n/30 May 9. The company sold merchandise costing $400 to E. James for $500 on credit, terms n/10 May 15. The company borrowed $1000 cash by signing a note payable to the bank. May 18. The company received $500 cash from E. James in payment of the May 9 purchase. May 24. The company sold merchandise costing $150 to B. Cox for $200 casharrow_forwardPLEASE calculated the Net Salesarrow_forwardLi Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Journalize the following transactions that should be recorded in the cash receipts journal. May 1 C. Li, the owner, contributed $10,000 cash to the company. May 7 The company purchased $6,000 of merchandise on credit from Gomez, terms n/30. May 9 The company sold merchandise costing $650 to E. James for $750 on credit, terms n/10. May 15 The company borrowed $3,500 cash by signing a note payable to the bank. May 18 The company received $750 cash from E. James in payment of the May 9 purchase. May 24 The company sold merchandise costing $400 to B. Cox for $450 cash.arrow_forward
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