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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

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.