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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?

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    https://brainmass.com/business/finance/spilker-journalize-september-transactions-166154

    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

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