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Journal entries in normal business cycle

1. ABC Co. started business on Jan 2010. On that day the company issued common stock in exchange for $50,000. Prepare the journal entry.

2. ABC CO. started business on Jan 2010. At the beginning of Jan, ABC paid $3,400 for supplies.

3. ABC sold watches costing the company a total of $63,000 to produce. Prepare the journal entry.

4. ABC customers paid $42,000 for services that will not be performed until February.

5. ABC sold watches to customers for $90,000 cash. Prepare the journal entry.

6. ABC purchased supplies for $5,000. At the end of the month, ABC takes inventory and finds out the remaining supplies are worth $2,400. Prepare an adjusting journal entry.

7. ABC had a balance of $12,000 in unearned revenue on February 1st. At the end of February, the unearned revenue balance was $5,000. Prepare the adjusting journal entry to reflect this information.

8. At the start of February, ABC had salaries payable outstanding of $6,000. On February 4th. ABC sent out paychecks to its employees valued at $10,000. Prepare the journal entry.

9. During January, ABC had earned revenues of $50,000. The customers paid 30% cash and the remaining amount on the account. Prepare the journal entry.

10. During January, ABC purchased supplies for
$7,000. ABC paid the supplier 40% in cash and the remaining balance on account.

Solution Preview

Cash 50,000
Common Stock 50,000
Inventory 3,400
Cash 3,400
Cost of goods sold 63,000
Inventory ...

Solution Summary

The solution discusses journal entries in normal business cycles.