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Journal entries in normal business cycle

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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.

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Solution Preview

1.
Cash 50,000
Common Stock 50,000
2.
Inventory 3,400
Cash 3,400
3.
Cost of goods sold 63,000
Inventory ...

Solution Summary

The solution discusses journal entries in normal business cycles.

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See Also This Related BrainMass Solution

P-2-2A Judi Dench transactions: Journalize, post and prepare a trial balance

The (SO ARE IN THE ATTACHMENTS)
P2-2A Judi Dench is a licensed architect. During the first month of the operation of her company,
Judi Dench, Inc., the following events and transactions occurred.

April 1 Stockholders invested $25,000 cash in exchange for common stock.
1 Hired a secretary-receptionist at a salary of $300 per week payable monthly.
2 Paid office rent for the month $800.
3 Purchased architectural supplies on account from Halo Company $1,500.

Journalize a series of transactions.
(SO 2, 4) SEE ATTACHMENT

Journalize transactions, post, and prepare a trial balance.
(SO 2, 4, 6, 7) SEE ATTACHMENT

Accounts Receivable $10,642 Prepaid Insurance $ 1,968
Accounts Payable 8,396 Repair Expense 961
Cash ? Service Revenue 10,610
Delivery Equipment 49,360 Dividends 700
Gas and Oil Expense 758 Common Stock 40,000
Insurance Expense 523 Salaries Expense 4,428
Notes Payable 26,450 Salaries Payable 815
Retained Earnings 4,636

Instructions

Prepare a trial balance with the accounts arranged as illustrated in the chapter and fill in the
missing amount for Cash.

10 Completed blueprints on a carport and billed client $900 for services.
11 Received $500 cash advance from R.Welk for the design of a new home.
20 Received $1,500 cash for services completed and delivered to P. Donahue.
30 Paid secretary-receptionist for the month $1,500.
30 Paid $600 to Halo Company for accounts payable due.
Judi uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126
Supplies, No. 201 Accounts Payable, No. 205 Unearned Revenue, No. 311 Common Stock,
No. 400 Service Revenue, No. 726 Salaries Expense, and No. 729 Rent Expense.

Instructions
(a) Journalize the transactions.
(b) Post to the ledger accounts.
(c) Prepare a trial balance on April 30, 2006.

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