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 4.2P
Transaction Analysis; Journal
- January 4: Owners invested $400,000 (the par value of the stock) in exchange for 40,000 shares of common stock.
- January 31: Branton purchased an office building for $320,000 and paid for the purchase with a note payable. Interest in the amount of $16,000 will be due annually on January 31 of each year, beginning in 2019.
- February 1: Branton rented out a portion of its office building to another company. The renter signed a rental lease for the period of February 1, 2018, to January 31, 2019, and paid the annual rent amount of $60,000 upfront in cash.
- March 1: Branton paid $12,000 cash for administrative expenses.
- March 28: Branton purchased supplies in the amount of $42,000 on account with the supplier.
- April 8: Branton purchased a one-year insurance policy that runs from May 1, 2018, to April 30, 2019, in the amount of $62,000 and paid for the policy in full in cash.
- May 1: Branton recorded sales revenue in the amount of $240,000 that was received in cash from customers. Ignore Cost of Goods Sold.
- July 6: Branton paid employees $34,000 in wages in cash.
- September 30: Branton recorded $320,000 in sales revenue. Of this amount, $200,000 was paid in cash and the remainder was on account. Ignore Cost of Goods Sold.
- October 31: Branton received a cash payment from a customer in the amount of $40,000 to be applied to its account balance related to the September 30 sale.
- November 15: Branton purchased supplies in the amount of $26,000 on account with the vendor.
- December 1: Branton recorded sales revenue in the amount of $222,000, all on credit. Ignore Cost of Goods Sold
- December 22: Branton received a legal bill for $14,000, which it will pay when due in February 2019.
Note: Branton records straight-line
Required
- a. Prepare the journal entries for the transactions. Omit explanations.
- b. Show the
accounting equation effect of each of these transactions. - c. Prepare any necessary year-end adjusting journal entries for these transactions.
- d. Show the accounting equation effect of each of the adjusting journal entries.
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WINTER WHOLESALE COMPANY BEGAN OPERATIONSON AUGUST, 2021.
THE FOLLOWING TRANSACTIONS TOOK PLACE DURING THE MONTH OF AUGUST
A. OWNERS INVESTED P 50,000 CASH IN THE CORPORATION IN EXCHANGE FOR 5,000
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B. EQUIPMENT WAS PURCHASED FOR P 20,000 CASH
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E. P 30,000 WAS BORROWED FROM A LOCAL BANK, AND A NOTE PAYABLE WAS SIGNED
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H. P 20,000 WAS PAID ON ACCOUNT TO SUPLIERS OF MERCHANDISE
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Chapter 4 Solutions
Intermediate Accounting (2nd Edition)
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