Journal Entries for July for Woodbury
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During July 2006, Woodbury, Inc., completed the following transactions. Prepare the journal entry for each transaction.
July 2 Received $400,000 for 8,000 shares of capital stock.
4 Purchased $80,000 of equipment, with 75% down and 25% on a note payable.
5 Paid utilities of $3,500 in cash.
9 Sold equipment for $12,500 cash (no gain or loss).
13 Purchased $300,000 of inventory, paying 40% down and 60% on credit.
14 Paid $7,500 cash insurance premium for July.
18 Sold inventory costing $45,000 for $62,000 to customers on account to be paid at a later date.
20 Collected $4,000 from accounts receivable.
24 Sold inventory costing $36,000 for $55,000 to customers for cash.
27 Paid property taxes of $1,400.
30 Paid $180,000 of accounts payable for inventory purchased on July 13.
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Solution Summary
The solution presents the journal entries complete with explanations for the entries. Also included are four notes which may either explain or affect the entries made.
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Notes to the solution
1. No distinction is made between capital stock and additional paid in capital. Normally we would know the breakdown.
2. In the sale of equipment ...
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