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# Spilker: Journalize September Transactions

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Assume you are interviewing for a part-time accounting job at Spilker & Associates, Inc., and the interviewer gives you the following list of company transactions in September 2006.

Sept. 1 Received \$150,000 for capital stock issued.
Sept 2 Paid \$20,000 cash to employees for wages earned in September 2006.
Sept 4 Purchased \$75,000 of running shoes and clothing on account for resale.
Sept 5 Paid utilities of \$1,800 for September 2006.
Sept 9 Paid \$1,500 cash for September's insurance premium.
Sept 11 Sold inventory of running shoes and clothing costing \$35,000 for \$70,000, with \$20,000 received in cash and the remaining balance on credit.
Sept 15 Purchased \$2,500 of supplies on account.
Sept 21 Received \$25,000 from customers as payments on their accounts.
Sept 25 Paid \$75,000 of accounts payable.

Using this list, you have been asked to do the following in the interview:

Required:
1. Journalize each of the transactions for September. (Omit explanations.)

2. Interpretive Question: If the business owners wanted to know at any given time how much cash the company had, where would you tell the owners to look? Why?

#### Solution Preview

See Excel for clarity.

Date Description Debit Credit

1-Sep Cash 150,000
Capital Stock 150,000

2-Sep Wages 20,000
Cash 20,000

4-Sep Inventory 75,000
Accounts payable 75,000

5-Sep Utilities expense 1,800
Cash 1,800

9-Sep Prepaid insurance 1,500
Cash 1,500
Note: this could be insurance ...

#### Solution Summary

The solution presents the journal entries for September for Spilker & Associates in Excel. Following is a short discussion in response to the question about cash balances. There are six possible methods to determine the cash position of the company.

\$2.19