Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2.4E
• LO2–2
The following transactions occurred during the month of June 2018 for the Stridewell Corporation. The company owns and operates a retail shoe store.
1. Issued 100,000 shares of common stock in exchange for $500,000 cash.
2. Purchased office equipment at a cost of $100,000. $40,000 was paid in cash and a note payable was signed for the balance owed.
3. Purchased inventory on account at a cost of $200,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $280,000. The cost of the goods sold was $140,000.
5. Paid $6,000 in rent on the store building for the month of June.
6. Paid $3,000 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2018.
7. Paid $120,000 on account for the merchandise purchased in 3.
8. Collected $55,000 from customers on account.
9. Paid shareholders a cash dividend of $5,000.
10. Recorded depreciation expense of $2,000 for the month on the office equipment.
11. Recorded the amount of prepaid insurance that expired for the month.
Required:
Prepare journal entries to record each of the transactions and events listed above.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
10
Assume that Mr Ahmed purchased OMR 3000 goods from ABC LLC on credit. He paid the entire cash to the company on 28th day from the date of purchase. Write the journal entry in the books of company for the above cash receipt.
a.
Dr Accounts receivables A/C and Cr Sales A/C.
b.
Dr Cash A/C and Cr Accounts receivables A/C.
c.
Dr Accounts receivables A/C and Cr Cash A/C
d.
Dr Purchase A/C and Cr Accounts receivables A/C
Exercise 1
The following were selected from among the transactions completed by Greco Co. during the current
year. Greco Co. sells and installs home and business security systems. It uses the periodic inventory
system and the allowance method in accounting for its uncollectible accounts receivables.
Loaned P6,000 cash to Mark Tift, receiving a 90-day, 8% note.
Jan 08
Feb 12
Purchased merchandise on account from Gwyn Co., list price P25,000.
Trade discount 5%. Terms: 2/10, n/60.
Mar 20
Wrote off a P1,000 account from Rodel Co as uncollectible.
Apr 03
Sold merchandise on account to Messina and Son, P18,000. Terms: 3/5,
2/10, 1/15, n/45.
Apr 08
Mark Tift dishonored the note.
Apr 13
Issued a 60-day, 12% note for the Feb 12 transaction.
Accepted a 30-day, 12% note for the Apr 03 transaction.
May 18
Jun 07
Received from Mark Tift the amount owed on the dishonored note, plus
interest from the date the note was dishonored until the payment date at
10% on the maturity value of the note.
Settled…
Question 1:
Following amounts have been Extracted from the records of Monday Limited.
Description
2019
2018
- Rs. In 000-
Sales
32,875
31,390
Gross profit
16,880
14,310
Profit for the year
3,300
2,700
Account receivable
3,860
2,510
Account payable
4,660
2,890
Inventory
430
445
Cash at bank
12
37
Bank overdraft
280
40
Monday Limited secured a large new contract to supply goods to a large departmental store across a two year
period from 1st July 2019. Monday Limited normally offers wholesale customers 30 days’ credit, but department store would only agree to the contract with 90 days credit terms. The directors of Monday Limited agreed to this as they believed it was worth it to have their products placed with this department store. Monday Limited has an average 45 day credit from its suppliers. The bank overdraft is used to fund working capital and currently has a limit of Rs.300,000.…
Chapter 2 Solutions
Intermediate Accounting
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Problem 10-01A On January 1, 2022, the ledger of Cullumber Company contained these liability accounts. Accounts Payable $45,000 Sales Taxes Payable 9,100 Unearned Service Revenue 21,500 During January, the following selected transactions occurred. Jan. 1 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note. 5 Sold merchandise for cash totaling $5,936, which includes 6% sales taxes. 12 Performed services for customers who had made advance payments of $12,500. (Credit Service Revenue.) 14 Paid state treasurer’s department for sales taxes collected in December 2021, $9,100. 20 Sold 750 units of a new product on credit at $54 per unit, plus 6% sales tax. During January, the company’s employees earned wages of $52,000. Withholdings related to these wages were $3,978 for Social Security (FICA), $5,686 for federal income tax, and $1,706 for state income tax. The company owed no money related to these earnings for federal or state…arrow_forward18 Owen Company's unadjusted book balance at June 30 is $13,680. The company's bank statement reveals bank service charges of $110. Two credit memos are included in the bank statement: one for $1,410, which represents a collection that the bank made for Owen, and one for $180, which represents the amount of interest that Owen had earned on its interest-bearing account in June. What is the true cash balance? 200441 Multiple Choice O O $15,160 $14,910 $15,380 $13,680arrow_forwardTB 02-79 Your company buys a $2 million warehouse pay... Your company buys a $2 million warehouse paying $300,000 in cash and issuing $1.7 million in promissory notes. This will be posted as: Multiple Choice O $2 million credited and $300,000 debited to assets; $1.7 million debited to liabilities. $2 million debited and $300,000 credited to assets; $1.7 million credited to liabilities. O $2 million credited to assets and $2 million debited to liabilities. $2 million debited to assets and $2 million credited to liabilities.arrow_forward
- CHP#10_3 Journal Entries for Accounts and Notes PayableGeary Company had the following transactions: Apr. 15 Issued a $6,000, 60-day, 8 percent note payable in payment of an account with Marion Company. May 22 Borrowed $50,000 from Sinclair Bank, signing a 60-day note at nine percent. Jun. 14 Paid Marion Company the principal and interest due on the April 15 note payable. Jul. 13 Purchased $15,000 of merchandise from Sharp Company; signed a 90-day note with eight percent interest. Jul. 21 Paid the May 22 note due Sinclair Bank. Oct. 2 Borrowed $38,000 from Sinclair Bank, signing a 120-day note at 12 percent. Oct. 11 Defaulted on the note payable to Sharp Company. Requireda. Record these transactions in general journal form.b. Record any adjusting entries for interest in general journal form. Geary Company has a December 31 year-end. Round answers to nearest dollar. Use 360 days for interest calculations.arrow_forward37 The cash in bank of AA Company in BB (Bank) had a balance per book of P1,920,000 as of December 31, 2022. The details below are related to BB Bank account: A P66,800 customer’s check payable to the company, dated January 3, 2023, with O.R. no. 18932 was included in the December 31 balance. An P18,000 check payable to a supplier dated January 2, 2023 was released on December 28, 2022 and recorded on this date. A customer collection during December amounting to P345,000 was recorded by the accountant at P354,000. Outstanding checks as of December 31, 2022 amounted to P238,500 were recorded as disbursements from the cash in BB Bank account. What is the correct balance of cash in BB as of December 31, 2022?arrow_forward25 - On 12.12.20XX, the entity purchased goods worth $ 50,000 from entity B on credit. Exchange rate on the day of the transaction $ 1 = 2.5 TL (VAT is not taken into account)A) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 153 COMMERCIAL GOODS 50000 300 BANK CREDITS 50000 B) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 153 COMMERCIAL GOODS 125000 300 BANK CREDITS 125000C) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 153 COMMERCIAL GOODS 50000 320 SELLERS 50000 D) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 153 COMMERCIAL GOODS 125000 321 BORROWINGS 125000 E) CODE AND NAME OF THE ACCOUNT WILL RECEIVE DEBT 153 COMMERCIAL GOODS 125000 320 SELLERS 125000arrow_forward
- Q.1 The following transactions are for the Sun's Corporation, December, 2018. 1. 12 Jan. Sun's Corporation issued shares 100000 and value of one share is Rs. 56. 2. 14 Feb. Sun's Corporation purchased furniture 30000 for cash. 3. 17 Mar. Sold goods on credit for Rs. 90000. 4. 21 Apr. Account receivable collected for Rs 10000, made on 17 March. 5. 21 Apr Sun's Corporation purchased computer 30000 on account payable. 6. 23 Jun. Paid advertising expense for Rs. 9000. 7. 12 Sep. Paid salary for Rs. 17000 8. 30 Dec. Declared and paid dividend to shareholders 40000. Required: a. Pass Journal entries. b. Post each of the above transactions in the Ledger c. Prepare Trial Balance.arrow_forwardChapter 5 Exercises i Saved 49 Required information Part 4 of 7 (The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances: Accounts Debit Credit 1 $ 26,100 14,700 Cash points Accounts Receivable Allowance for Uncollectible Accounts $ 3,000 Supplies Notes Receivable (6, due in 2 years) Land Skipped 3,600 15,000 80,000 Accounts Payable Conmon Stock Retained Earnings 7,900 95,000 33,500 eBook Totals $139,400 $139,400 Print During January 2021, the following transactions occur: 2 Provide services to customers for cash, $46,100. 6 Provide services to customers on account, $83,400. January January January 15 write off accounts receivable as uncollectible, $2,500. January 20 Pay cash for salaries, $32, 500. January 22 Receive cash on accounts receivable, $81,000. January 25 Pay cash on accounts payable, $6,600. January 30 Pay cash for utilities during January, $14,800. References…arrow_forwardQuestion 6On January 1, 2017, Carla Vista Co.'s accounting records contained these liability accounts. Accounts Payable $43,400Sales Taxes Payable 7,050Unearned Service Revenue 19,900 During January, the following selected transactions occurred. Jan. 1 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note.5 Sold merchandise for cash totaling $6,360, which includes 6% sales taxes.12 Performed services for customers who had made advance payments of $11,200. (Record Service Revenue.)14 Paid state treasurer’s department for sales taxes collected in December 2016, $7,050.20 Sold 590 units of a new product on credit at $50 per unit, plus 6% sales tax. During January, the company’s employees earned wages of $73,800. Withholdings related to these wages were $5,646 for Social Security (FICA), $5,271 for federal income tax, and $1,581 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during…arrow_forward
- 10:12 M A O N ll 86%i Following are the transactions of PQR Company in year 2019 and 2020: 2019 July 1 October 1 Borrowed $25,000 cash from POL Bank by signing a 7%, 6-month, $25,000 note. Purchased Land from GHI Itd. by signing a 9%, 2-month, $40,000 note. Purchased $60,000 of merchandise on credit from XYZ Itd, terms are n/30. PQR uses the perpetual November 1 inventory system. December 1 Paid the amount due on the note to GHI Itd. at the maturity date. Replaced the account payable of XYZ Itd. with a 10%, 3-month, $60,000 note. December 1 December 31 Accrued interest on the notes payable.. 2020 January 1 March 1 Paid the amount due on the note to POL Bank at the maturity date. Paid the amount due on the note to XYZ Itd. at the maturity date. Question No. 8 Journalize the transactions of year 2019. Question No. 9 Prepare the current liabilities section at December 31, 2019. Also, journalize the transactions of year 2020. IIarrow_forwardFinancial Accounting I QUESTION TWO The John trading company has undertaken the following transactions during the month of May 2016. May 01: Cash balance $2,200, bank overdraft $365. May 03: Paid J & Co. by check $1,200, discount received from him $15. May 05: Received from A & Co. a check for $980, discount allowed to them $20. May 07: Deposited into bank the check received from A & Co. on May 05. May 10: Purchased stationary for cash, $150. May 15: Purchased merchandise for cash, $1,300. May 15: Cash sales for the first half of the month, 2,350. May 16: Deposited into bank $1,600. May 18: Cash withdrawn from bank for personal expenses $150. May 19: Issued a check for merchandise purchased, $1,650. May 21: Drew from bank for office use, $650. May 24: Received a check from S & Sons and deposited the same into bank, $1,560. May 25: Paid a check to Ali Inc. for $400 and received a discount of $15. May 27: Bought furniture for cash for office use, $390. May 29: Paid…arrow_forwardWeek 7 Discussion question Accounting for Assets: Receivables Johnson company’s financial year ended on December 31, 2010. All the transactions related to the company’s uncollectible accounts are can be found below: January 15 Wrote of $440 account of Miller Company as uncollectible April 2nd Re-establish the account of Louisa Teller and record the collection of $1,050 as payment in full for her account which had been written off earlier July 31 Received 40% of the $700 balance owed by William John and wrote off the remainder as uncollectible August 15 Wrote off as uncollectible the accounts of Sherwin Company, $1,700 and V. Vasell $2,200 September 26 Received 25% of the $1,140 owed by Grant Company and wrote off the remainder as uncollectible October 16 Received $741 from M. Fuller in full payment of his account which had been written off earlier as uncollectible December 31 Estimated uncollectible…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Accounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Accounting (Text Only)
Accounting
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY