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Concept explainers
. Boris Gardner started a CD distribution business, by investing part of his Heineken
Startime earnings. On September 1, 2009 he had the following items
Fixtures and Fittings 30,000
Equipment 25,000
Motor Van 120,000
Stock of Goods 100,000
Bank 5,000
The business was financed at 40% by a loan from an investment bank. Use a
general journal to illustrate the opening entries of the business.
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Every organization conducts a large number of financial transactions in its business. Organizations should record all transactions in their books. The first step in recording transactions is a general journal. Some transactions are recorded in specific journals, but not all such specific journals are sales journals, purchase journals, and cash payment journals.
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- The transactions relating to the formation of Blue Company Stores Incorporated, and its first month of operations follow. a. The firm was organized and the stockholders invested cash of $7,600. b. The firm borrowed $5,400 from the bank; a short-term note was signed. c. Display cases and other store equipment costing $1,700 were purchased for cash. The original list price of the equipment was $1,900, but a discount was received because the seller was having a sale. d. A store location was rented, and $1,400 was paid for the first month's rent. e. Inventory of $15,200 was purchased; $9,000 cash was paid to the suppliers, and the balance will be paid within 45 days. f. During the first week of operations, merchandise that had cost $3,300 was sold for $7,000 cash. g. A newspaper ad costing $150 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month. h. Additional inventory costing $4,100 was purchased; cash of $1,250 was paid,…arrow_forwardPlease help me. Thankyou.arrow_forwardHaresharrow_forward
- Park & Company was recently formed with a $6,400 investment in the company by stockholders in exchange for common stock. The company then borrowed $3,400 from a local bank, purchased $1,140 of supplies on account, and also purchased $6,400 of equipment by paying $2,140 in cash and signing a promissory note for the balance. Based on these transactions, the company's total assets are: Multiple Choice $9,800. $15,200. $12,800. $11,940.arrow_forwardthanks for helparrow_forwardMusic Flow is a streaming music service specializing in podcasts. Music Flow generates revenue through subscriptions that requires customers to pay using a credit card. Consider the following events for Music Flow in Year 1: Music Flow earned $528,000 of subscription revenue during Year 1. Music Flow submitted the credit card receipts to the credit card company immediately. The credit card company paid Music Flow cash in the amount of face value less a 4 percent service charge. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- Hello, I need help pleasearrow_forwardOf the following transactions, which should be recorded as income? Of the following transactions, which should be recorded as income? Harry's Hats sold inventory on credit for $ 3000. Chandler & Co Plumbing's owner contributes $10 000 of personal funds to the business. M. Witham borrowed $80 000 from the bank. T. O'Toole pays $5500 for goods sold to her on credit last month.arrow_forward
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