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Financial Accounting - Journal Entries

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Dec. 1 Established petty cash account with $400
Dec. 1 Paid rent expense of $5000 for the month of December
Dec. 1 Issued $100,000 bonds at par with an interest rate of 6%
Dec. 3 Purchased $400,000 of inventory on account under the terms 2/10, net 30
Dec. 5 Sold land for cost, $25,000
Dec. 9 Sold equipment with an original cost of $30,000, accumulated depreciation of $15,000 for $12,000 cash.
Dec. 10 Sold inventory on account for $400,000 with a cost of $200,000.
Dec. 10 Allowance for doubtful accounts is 3% of net sales rounded to the nearest dollar. (see Dec. 10th sales.)
Dec. 11 Paid inventory purchased on December 3
Dec. 12 Replenished petty cash receipts. $100 postage expense; $200 Miscellaneous expense; $85 Entertainment expense. Cash in box $13
Dec. 18 Wrote off uncollectible account $15,000
Dec. 20 Received payment in full for sale on December 10.
Dec. 31 Paid salaries and wages expense of $5,000
Dec. 31 Accrued for interest expense on bonds issues on December 1.
Dec. 31 Prepaid insurance of $400 expired in December.
Dec. 31 Record depreciation expense of $1,500.

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Financial Accounting: journal entries; practice problems

1. The annual depreciation per thousand units is as follows:

Balance of
End of Unit Accumulated Asset
Year Output Depreciation Expense Depreciation Book Value

$100,000
2002 80,000
2003 120,000
2004 40,000

At the end of 2004 the equipment is damaged and you have to write it off
the books. Make the journal entry for the write off.

2. You pay $790,000 for a business and the list of accounts is as follows. Record the purchase.
1. Accounts Receivable.............................................. 180,000
Inventory................................................................... 75,000
Equipment................................................................ 84,000
Short-Term Loan Payable...................................... 160,000
Cash ........................................................ 790,000

3. Make a journal entry to record the $1,450,000 purchase of various franchise assets as follows: (The franchise itself has a cash value of $225,000 and you paid it to Ruby Tuesdayl)
The appraised values are Land $320,000; Patent 340,000, Building $620,000.

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