Concept explainers
Introduction:
To prepare: Trail balance of YM.
Introduction: Journal entry is a technique of booking and recording financial transactions on any company. Ledger is used to record all economic transactions of the account by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account.
To prepare: Cash T account, and compute the ending cash balance.
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Loose Leaf for Financial Accounting: Information for Decisions
- The following are the transactions of Spotlighter, Incorporated, for the month of January. a. Borrowed $4,390 from a local bank on a note due in six months. b. Received $5,080 cash from investors and issued common stock to them. c. Purchased $1,900 in equipment, paying $650 cash and promising the rest on a note due in one year. d. Paid $750 cash for supplies. e. Bought and received $1,150 of supplies on account. Required: Post the effects to the appropriate T-accounts and determine ending account balances. Show a beginni Debit Beginning Balance Ending Balance Debit F Cash Equipment Credit Credit Debit Beginning Balance Ending Balance Debit Supplies Accounts Payablearrow_forwardThe following are the transactions of Spotlighter, Incorporated, for the month of January. a. Borrowed $3.990 from a local bank on a note due in six months. b. Received $4,680 cash from investors and issued common stock to them. C. Purchased $1,100 in equipment, paying $250 cash and promising the rest on a note due in one year. d. Paid $350 cash for supplies. e. Bought and received $750 of supplies on account. Required: Post the effects to the appropriate T-accounts and determine ending account balances. Show a beginning balance of zero.arrow_forwardJournalize the following: 1. On the books & records of Company A: On May 2nd, Company A received $100 of interest income from the bank earned in April. If the books are on an accrual basis, record the entry in April and in May when cash was received April May 2. On the books & records of Company A: In January, Company A purchased Investment in XYZ for $100. Payment was made in cash. In March, Company A sold Investment in XYZ for $150. Payment was received in cash. 3. On the books & records of Company A: On April 1st, Company A paid $1,200 for insurance expense that covers the year 4/1/17-3/31/18. Record 4/1/17 entry for payment of $1,200 Record 4/30/17 journal entry 4. There are 2 parallel funds, Fund A and Fund B. Together, the funds will make an investment of $100k, with a 65/35 split. The investment will be paid in cash, however, Fund B does not currently have any cash so Fund…arrow_forward
- Capital Financial Advisors Limited had the following transactions during January, its first month of operations: a Issued to Marvin Tycoon 9,000 shares of share capital in exchange for his investment of $45,000 cash. b Borrowed $30,000 from a bank and signed a note payable due in three months. c Purchased office furniture costing $19,750; paid $6,000 cash and charged the balance on account. d Paid $6,000 of the amount owed for office furniture. e Issued an additional 2,000 shares to an individual who invests $10,000 in the business. INSTRUCTIONS: Record the above transactions directly in the T accounts below. Identify each entry in a T account with the letter shown for the transaction.arrow_forwardTanwir commenced his business on 1 October 20X9, with capital in the bank of $20,000. During his first month of trading, his transactions were as follows. 1 October Purchase inventories for $3,500 on credit from A Jones 3 October Paid $1,200 rental of premises, by cheque 5 October Paid $5,000 for office equipment, by cheque 10 October Sold goods costing $1,000 for $1,750, on credit to P Duncan 15 October Returned inventories costing $500 to A Jones 18 October Purchased inventories for $2,400 on credit from A Jones 25 October Paid A Jones for the net purchases of 1 October, by cheque 28 October P Duncan paid $500 on account, by cheque The balance on the account of A Jones at 31 October 20X9 was $ ........................................arrow_forwardGreen Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company had the following transactions. 1. Issue 10,000 shares of common stock in exchange for $32,000 in cash. 2. Purchase land for $19,000. A note payable is signed for the full amount. 3. Purchase storage container equipment for $8,000 cash. 4. Hire three employees for $2,000 per month. 5. Receive cash of $12,000 in rental fees for the current month. 6. Purchase office supplies for $2,000 on account. 7. Pay employees $6,000 for the first month’s salaries. Required: For each transaction, describe the dual effect on the accounting equation. For example, in the first transaction, (1) assets increase and (2) stockholders’ equity increases.arrow_forward
- The following are the transactions of Spotlighter, Incorporated, for the month of January. Borrowed $3,940 from a local bank on a note due in six months. Received $4,630 cash from investors and issued common stock to them. Purchased $1,000 in equipment, paying $200 cash and promising the rest on a note due in one year. Paid $300 cash for supplies. Bought and received $700 of supplies on account. Required:Prepare journal entries for each transaction.arrow_forwardThe following transactions occurred at the Blueberry Company. 1. Started business by issuing 10,000 shares of common stock for $26.000. 2. Leased a building for three years at $560 per month and paid six months' rent in advance. 3. Purchased equipment by signing a note with the bank for $6,000. 4. Purchased $2,400 of supplies on account. 5. Recorded cash sales of $1,400 for the first week. 6. Paid weekly salaries, $620. 7. Paid for supplies purchased in item (4). 8. Recorded depreciation on equipment, $80. Required: Prepare journal entries to record each of the transactions listed above. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first accountarrow_forwardDiscuss how each of the following transactions for Watson, International, will affect assets, liabilities, and stockholders’ equity, and prove the company’s accounts will still be in balance. An investor invests an additional $25,000 into a company receiving stock in exchange. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed. An electric bill was received for $35. Payment is due in thirty days Part-time workers earned $750 and were paid. The electric bill in “C” is paid.arrow_forward
- Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions. 1. January 1 Issue 10,000 shares of common stock in exchange for $42,000 in cash. 2. January 5 Purchase land for $24,000. A note payable is signed for the full amount. 3. January 9 Purchase storage container equipment for $9,000 cash. 4. January 12 Hire three employees for $3,000 per month. 5. January 18 Receive cash of $13,000 in rental fees for the current month. 6. January 23 Purchase office supplies for $3,000 on account. 7. January 31 Pay employees $9,000 for the first month’s salaries. Required: 1. Record each transaction. Green Wave uses the following accounts: Cash, Supplies, Land, Equipment, Common Stock, Accounts Payable, Notes Payable, Service Revenue, and Salaries Expense. 2. Post each transaction to T-accounts and compute the ending balance of each account. Since this is the first month of operations, all T-accounts have a…arrow_forwardRequired: The following are the transactions of Spotlighter, Incorporated, for the month of January. For each transaction, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. (Enter any decreases to account balances with a minus sign.) a. (Sample) Borrowed $5,040 from a local bank on a note due in six months. b. Received $5,730 cash from investors and issued common stock to them. c. Purchased $2,100 in equipment, paying $750 cash and promising the rest on a note due in one year. d. Paid $850 cash for supplies. e. Bought and received $1,250 of supplies on account. a. b. C. C. d. d. e. Cash Assets 5,040 Notes Payable (short-term) = = Liabilities = + 5,040 + + + + + + + Stockholders' Equityarrow_forwardRequired: The following are the transactions of Spotlighter, Incorporated, for the month of January. For each transaction, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. (Enter any decreases to account balances with a minus sign.) a. (Sample) Borrowed $5,040 from a local bank on a note due in six months. b. Received $5,730 cash from investors and issued common stock to them. c. Purchased $2,100 in equipment, paying $750 cash and promising the rest on a note due in one year. d. Paid $850 cash for supplies. e. Bought and received $1,250 of supplies on account. PARAPEP Seved Cash Assets Liabilities 5,040 Notes Payable (short-term) 5,040 . Help Save & Exit Submit Check my work Stockholders' Equityarrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College