Concept explainers
Problem 2-603 Journalizing and Posting Transactions
Findlay Testing Inc. provides water testing and maintenance services for owners of hot tubs and swimming pool. During September the following transactions occurred:
Sept. 1 Issued common stock for $20,000.
2 Purchased chemical supplies for $1,880 cash.
5 Paid office rent for October, November, and December; the rent is $800 per month.
8 Purchased $12.90 of advertising for September on account.
13 Billed the city of Bellefontaine $2,100 for testing the water in the city’s outdoor pools during September,
18 Received $3250 from Alexander Blanchard upon completion of overhaul of his swimming pool water circulation system. Since the job was completed and collected for on the same day, no bill was sent, to Blanchard.
Sept. 25 Received $835 from the city of Bellefontaine for water testing that was previously billed.
30 Recorded and paid September salaries of $3,970.
Required:
1. Prepare a
2.
Journal Entries:
Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.
Requirement: 1
Journalize the each transaction.
Answer to Problem 60BPSB
Journal entries in the books of Findlay Testing Inc. for the month of September
Date | Account and Explanation | Debit | Credit |
Sept. | |||
1 | Cash | $20,000 | |
Common Stock | $20,000 | ||
2 | Supplies | 1,880 | |
Cash | 1,880 | ||
5 | Prepaid Rent | 2,400 | |
Cash | 2,400 | ||
8 | Advertising Expense | 1,290 | |
Cash | 1,290 | ||
13 | Accounts Receivable | 2,100 | |
Service Revenue | 2,100 | ||
18 | Cash | 8,250 | |
Service Revenue | 8,250 | ||
25 | Cash | 835 | |
Accounts Receivable | 835 | ||
30 | Wages Expense | 3,970 | |
Cash | 3,970 | ||
Explanation of Solution
Date | Assets | Liabilities | Stockholders’ Equity |
Sept. | |||
1 | Increase (Cash) | Increase (Common Stock) | |
2 | Increase (Supplies) | ||
Decrease (Cash) | |||
5 | Increase (Prepaid Rent) | ||
Decrease (Cash) | |||
8 | Decrease (Cash) | Decrease (Advertising Expense) | |
13 | Increase (Accounts Receivable) | Increase (Service Revenue) | |
18 | Increase (Cash) | Increase (Service Revenue) | |
25 | Increase (Cash) | ||
Decrease (Accounts Receivable) | |||
30 | Decrease (Cash) | Decrease (Wages Expense) |
Introduction:
T-accounts as its name derived from shape of the account, is representation of business transaction in their respective account. It helps in organizing and analyzing the transaction according to their similar nature of account.
Requirement 2
Posting the journal entries into their concerned T-accounts
Answer to Problem 60BPSB
Accounts | Amount |
Cash | $20,835 |
Accounts Receivable | 1,265 |
Supplies | 1,880 |
Prepaid Rent | 2,400 |
Accounts Payable | 1,290 |
Common Stock | 20,000 |
Service Revenue | 10,350 |
Wages Expense | 3,970 |
Advertising Expense | 1,290 |
Explanation of Solution
Cash
Sept. 1 20,000 18 8,250 25 835 | Sept. 2 1,880 5 2,400 30 3,970 |
Bal. 20,835 |
Accounts Receivable
Sept. 13 2,100 | Sept. 25 835 |
Bal. 1,265 |
Supplies
Sept. 3 1,880 | |
Bal. 1,880 |
Prepaid Rent
Sept. 5 2,400 | |
Bal. 2,400 |
Accounts Payable
Sept. 8 1,290 | |
Bal. 1,290 |
Common Stock
Sept. 1 20,000 | |
Bal. 20,000 |
Service Revenue
Sept. 13 2,100 18 8,250 | |
Bal. 10,350 |
Wages Expense
Sept. 30 3,970 | |
Bal. 3,970 |
Advertising Expense
Sept. 8 1,290 | |
Bal. 1,290 |
Want to see more full solutions like this?
Chapter 2 Solutions
Cornerstones of Financial Accounting
- Monitoring of Receivables The Russ Fogler Company, a small manufacturer of cordless telephones, began operations on January 1. Its credit sales for the first 6 months of operations were as follows: Throughout this entire period, the firm’s credit customers maintained a constant payments pattern: 209b paid in the month of sale, 309b paid in the first month following the sale, and 509b paid in the second month following the sale. What was Fogler’s receivables balance at the end of March and at the end of June? Assume 90 days per calendar quarter. What were the average daily sales (ADS) and days sales outstanding (DSO) for the first quarter and for the second quarter? What were the cumulative ADS and DSO for the first half-year? Construct an aging schedule as of June 30. Use account ages of 0-30, 31-60, and 61-90 days. Construct the uncollected balances schedule for the second quarter as of June 30.arrow_forwardSALES AND CASH RECEIPTS TRANSACTIONS Paul Jackson owns a retail business. The following sales, returns, and cash receipts are for April 20--. There is a 7% sales tax. REQUIRED 1. Record the transactions starring on page 7 of a general journal. 2. Post from the journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.arrow_forwardJournal Entires for transaction June 20 Repaired a damaged steering mechanism for customer Darren O'Malley and also installed a new Hickster Pipe. Mr. O'Malley was billed for 3.25 hours of labor, accessories totaling $430.00, plus sales tax. He paid with a bank credit card. Merchandise listed on the sales invoice: Stock Number....................Item.................Quantity.............Net Cost Per Unit BM102 .......................HICKSTER PIPE............1...........................$215.00 Sales Tax 8% Labor cost $65/hourarrow_forward
- Problem Set A PROBLEM 9-11A Bell Florists sells flowers on a retail basis. Most of the sales are for cash however, a few steady customers have credit accounts. Bell's sales staff fills out a sales alip for each sale. There is a state retail sales tax of 5 percent, which is collected by the retailer and submitted to the state. The balances of the accounts as of March 1 have been recorded in the general ledger in your Working Papers or in CengageNow. The following represent Bell Florists' charge sales for March: Mar 4 Sold potted plant on account to C. Morales, sales slip no. 242, $27. plus sales tax of $1.35, total $28.35. 6 Sold floral arrangement on account to R. Dixon, sales slip no. 267, $54, plus sales tax of $2.70, total $56.70. 12 Sold corsage on account to B. Cox, sales slip no. 279, $16, plus sales tax of $0.80, total $16.80. 16 Sold wreath on account to All-Star Legion, sales slip no. 296, $104, plus sales tax of $5.20, total $109.20. 18 Sold floral arrangements on account to…arrow_forwardSearth Summer 19/201 Sport Direct, a sport stuff shop. At the beginning of the current season, the ledger of Sport Direct shop showed cash $2,200, Inventory $1,800, and Share capital - Ordinary $4,000. The following transactions were completed during April NOTE: Answer questions from 1 - 25 by using these information. April 1) Purchased Truck costing $9,600 by signing $9,600, 12%, 6-month notes payable. April 4) Purchased racquets and balls from Jay-Mac Co. for $760, FOB Shipping point, terms 2/10,n/30. April 5) Purchased Building for $48,000 cash, April 6) Paid Freight on purchase from Jay-Mac Co. for $40 cash. April 7) Purchased Supplies for $2,500 cash. April 8) Sold Merchandise to members for $1,150 on account terms n/30. The merchandise sold had a cost of $790 April 9) Paid office rent $1,500 cash. April 10) Returned merchandise for Jay-Mac Co. for $60, for a racquets that were defective, April 11) Purchased tennis shoes from u Sports for $420 cash. April 13) Paid Jay-Mac Co. in…arrow_forward**General Journal needed** Review uploaded images Rick Hall owns a card shop: Hall’s Cards. The following cash information is available for the month of August Year 1. As of August 31, the bank statement shows a balance of $13,250. The August 31 unadjusted balance in the Cash account of Hall’s Cards is $9,564. A review of the bank statement revealed the following information: A deposit of $1,250 on August 31, Year 1, does not appear on the August bank statement. It was discovered that a check to pay for baseball cards was correctly written and paid by the bank for $1,750 but was recorded on the books as $2,650. When checks written during the month were compared with those paid by the bank, three checks amounting to $4,095 were found to be outstanding. A debit memo for $59 was included in the bank statement for the purchase of a new supply of checks.arrow_forward
- APRIL 15 LECTURE SEC 4.1-4.4 Trigonometry - Bb Coll Return to Blackboard IS Weygandt, Accounting Principles, 13th Edition, Custom WileyPLUS Course for Bronx Community College Help | System Announcements CALCULATOR PRI Exercise 8-07 Your answer is partially correct. Try again. Lily Company established a petty cash fund on May 1, cashing a check for $115. The company reimbursed the fund on June 1 and July 1 with the following results. June 1: Cash in fund $3.00. Receipts: delivery expense $28.15, postage expense $36.30, and miscellaneous expense $44.70. July 1: Cash in fund $4.05. Receipts: delivery expense $23.90, entertainment expense $50.70, and miscellaneous expense $36.35. On July 10, Lily increased the fund from $115 to $145.00. Prepare journal entries for Lily Company for May 1, June 1, July 1, and July 10. (Credit account titles are automatically indented when amount is entered. Do n answers to 2 decimal places, e.g. 52.75. Record journal entries in the order presented in the…arrow_forwardReturn to Blackboard Weygandt, Accounting Principles, 13th Edition, Custom WileyPLUS Course for Bronx Community College Help | System Announcements Exercise 133 a-b CALCULATOR PRINTER VERSION BACK NEXT On September 30, after all monthly postings had been completed, the Accounts Receivable control account in the general ledger had a debit balance of $245,000; the Accounts Payable control account had a credit balance of $109,000. The October transactions recorded in the special journals are presented below. Special Journals October Transactions Sales journal Total sales $183,000 Purchases journal Total purchases 75,000 Cash receipts journal Accounts receivable column total 128,000 Cash payments journal Accounts payable column total 49,000 Compute the balance of the accounts rsceivable control accounts after the monthly postings on October 31. Accounts Receivable Compute the balances of the accounts payable control accounts after the monthly postings on October 31. Accounts Payable SUBMIT…arrow_forwardneed help with full working and steps thanks answer in text Listed below are selected transactions of Solution Department Store for the current year ending December 31. a. On December 5, the store received $500 from the Jackson Players as a deposit to be returned after certain furniture to be used in stage production was returned on January 15. b. During December, cash sales totaled $798,000, which includes the 5% sales tax that must be remitted to the state by the fifteenth day of the following month. c. On December 10, the store purchased for cash three delivery trucks for $120,000. The trucks were purchased in a state that applies a 5% sales tax. d. The store determined it will cost $100,000 to restore the area (considered a land improvement) surrounding one of its store parking lots, when the store is closed in 2 years. Solution’s estimates the fair value of the obligation at December 31 is $84,000. Required: Prepare all the journal entries necessary to record the…arrow_forward
- edugen.wileyplus.com 山 + D Return to Blackboard Weygandt, Accounting Principles, 13th Edition, Custom WileyPLUS Course for Bronx Community College Help | System Announcements Problem 8-03A a-b (Part Level Submission) (Video) CALCULATOR PRINTER VERSION Waterway Company maintains a petty cash fund for small expenditures. These transactions occurred during the month of August. 1 BACK NEXT Aug. 1 Established the petty cash fund by writing a check payable to the petty cash custodian for $210. 15 Replenished the petty cash fund by writing a check for $206.50. On this date, the fund consisted of $3.50 in cash and these petty cash receipts: freight-out $94.00, entertainment expense $47.00, postage expense $43.90, and miscellaneous expense $20.40. 16 Increased the amount of the petty cash fund to $305 by writing a check for $95.00. 31 Replenished the petty cash fund by writing a check for $289.00. On this date, the fund consisted of $16.00 in cash and these petty cash receipts: postage expense…arrow_forwardBUSINESS STUDIES DEPARTMENT INTERMEDIATE ACCOUNTNG1 (TUTORIAL #1) 1. XYZ Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year). May 1 Prepared a company check for $250 to establish the petty cash fund. May 15 Prepared a company check to replenish the fund for the following expenditures made since May1: a. Paid $78 for janitorial services. b. Paid $63.68 for miscellaneous expenses. c. Paid postage expenses of $43.50. d. Paid $57.15 to a local newspaper for an advertisement. e. Counted $11.15 remaining in the petty cash box. May 16 Prepared a company check for $200 to increase the fund to $450. May 31 The petty cashier reports that $293.39 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15: a. Paid postage expenses of $48.36. b. Reimbursed the office manager for business mileage, $38.50. c. Paid…arrow_forwardCurrent Attempt in Progress Pharoah Pet Supply Company billed its customers a total of $777,000 for the month of November. The total includes a 5% state sales tax. (a) Determine the proper amount of revenue to report for the month. Total sales revenue $ eTextbook and Mediaarrow_forward
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengageFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning