Concept explainers
Exercise 4.10
LO 2. 6, 7
Record transactions and adjustments Prepare an answer sheet with the column headings shown after the following list of transactions. Record the effect, if any, of the transaction
(Note: As an alternative to using the columns, you may write the
- During the month, Supplies Expense was debited $5,200 for supplies purchased. The cost of supplies used during the month was $3,800. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month.
- During the month, the board of directors declared a cash dividend of $28,800, payable next month.
- Employees were paid $21,000 in wages for their work during the first three weeks of the month.
- Employee wages of $7,200 for the last week of the month have not been recorded.
- Revenues from services performed during the month totaled $44,400. Of this amount, $18,600 was received in cash, and the balance is expected to be received within 30 days.
- A contract was signed with a newspaper for a $2,400 advertisement; the ad ran during this month but will not be paid for until next month.
- Merchandise that cost $9,300 was sold for $17,600. Of this amount, $6,600 was received in cash, and the balance is expected to be received within 30 days.
- Independent of transaction a, assume that during the month, supplies were purchased at a cost of $2,460 and debited to the Supplies (asset) account. A total of $1,980 of supplies were used during the month. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month.
- Interest of $ 1,080 has been earned on a note receivable but has not yet been received.
- Issued 2,400 shares of $10 par value common stock for $52,800 in cash.
Transaction/ | Stockholders’ | Net |
Adjustment | Assets LiabilitiesEquity’ | Income |
a. | Supplies | Supplies Exp. |
+1,400 | +1,400 |
(Note: A decrease to Supplies Expense increases Net Income.)
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Chapter 4 Solutions
Accounting: What the Numbers Mean
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