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Journal Entry Practice. E3-3 Recording the Transactions.

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Presentation on theme: "Journal Entry Practice. E3-3 Recording the Transactions."— Presentation transcript:

1 Journal Entry Practice

2 E3-3 Recording the Transactions

3 A customer orders and receives 10 personal computers from Dell; the customer promises to pay $18,400 within three months. Answer from Dells standpoint. What about cost info? Account NameDebitCredit Accounts Receivable$18,400 Sales Revenue$18,400

4 Fucillo Hyundai, Inc, sells a truck with a list, or sticker, price of $20,050 for $18,050 cash. Account NameDebitCredit Cash$18,050 Sales Revenue$18,050

5 Bon-Ton Department Store orders 1,000 mens shirts from Arrow Shirt Company for $15 each for future delivery. The terms require full payment within 30 days of delivery. Answer from Arrows standpoint. Account NameDebitCredit No Entry

6 Arrow Shirt Company completes production of the shirts described in part c and delivers the order (answer from Arrow Shirt Company perspective) Account NameDebitCredit Accounts Receivable$15,000 Sales Revenue$15,000

7 Arrow receives payment from Bon-Ton for the order described in part c. Answer from the perspective of Arrow Shirt Company. Account NameDebitCredit Cash$15,000 Accounts Receivable$15,000

8 A customer purchases a ticket from American Airlines for $410 cash to travel the following January. Answer from American Airlines perspective. Account NameDebitCredit Cash$410 Unearned Airfare Revenue$410

9 General Motors issues $20 million in new common stock Account NameDebitCredit Cash$20,000,000 Contributed Capital$20,000,000

10 Pen State University receives $18,300,000 cash for 80,000 five-game season football tickets. Account NameDebitCredit Cash$18,300,000 Unearned Football Ticket Revenue$18,300,000

11 Penn State plays the first football game described in part h. Account NameDebitCredit Unearned Football Ticket Revenue$3,660,000 Football Ticket Revenue$3.660,000

12 Precision Construction Company signs a contract with a customer for the construction of a new $500,000 warehouse. At the signing, Precision receives a $50,000 deposit as a deposit on the future construction project. Answer from the perspective of Precision. Account NameDebitCredit Cash$50,000 Unearned Construction Revenue$50,000

13 On September 1, 2012, a bank lends $1,200 to a company; the note principal and $144 annual interest are due in one year (1,200 X 12%). Answer from the Banks perspective. NOW: In 1 year (assuming no other transactions are recorded? Account NameDebitCredit Note Receivable$1,200 Cash$1,200 Account NameDebitCredit Cash$1,344 Notes Receivable$1,200 Interest Revenue$144

14 A popular ski magazine company receives a total of $1,980 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the perspective of the magazine company: What do you do with each edition of the magazine that is sent out (assume 12 issues)? Account NameDebitCredit Cash$1,980 Unearned Subscription Revenue$1,980 Account NameDebitCredit Unearned Subscription Revenue$165 Subscription Revenue$165

15 Sears, a retail store, sells a $100 lamp to a customer who charges the sale on his store credit card. Answer from Sears perspective. Account NameDebitCredit Accounts Receivable$100 Sales Revenue$100

16 E 3-4 Recording the transactions

17 Dell pays its computer service technicians $79,500 in salaries for two weeks ended January 7. ASSUME: No Salaries Payable has been previously recorded. Account NameDebitCredit Salaries Expense$79,500 Cash$79,500

18 At the beginning of January, Turner Construction Company pays $4,410 in workers compensation insurance for the first three months of the year. Account NameDebitCredit Prepaid Insurance$4,410 Cash$4,410

19 McGraw-Hill Publishing Company uses $754 worth of electricity and natural gas in its headquarters building for which it has not yet been billed. Note: Expense is incurred when utilities are used and can be recorded when amount is known. Account NameDebitCredit Utilities Expense$754 Utilities Payable$754

20 Arrow Shirt Company completes production of 500 mens shirts ordered by Bon-Tons Department Store at a cost of $10 each and delivers the order. Note: No information was provided about sales information. Would have been Accounts Receivable and Sales Revenue. Account NameDebitCredit Cost of Goods Sold$5,000 Inventory$5,000

21 The campus bookstore receives 500 accounting texts at a cost of $43 each. The terms indicate that payment is due within 30 days of delivery. Account NameDebitCredit Inventory$21,500 Accounts payable$21,500

22 During the last week of January, the campus bookstore sold 450 accounting texts received in part e at a sales price of $92 each. Assume cost data from part e (cost of $43 per book) Account NameDebitCredit Cash$41,400 Sales Revenue$41,400 Account NameDebitCredit Cost of Goods Sold$19,350 Inventory$19,350

23 Fucillo Hyundai, Inc. pays its salespersons $3,200 in commissions related to December automobile sales. Assume: Company had previously recorded commissions payable. Account NameDebitCredit Commissions Payable$3,200 Cash$3,200

24 Fucillo Hyundai, Inc. determines that it will pay its salespersons $4,470 in commissions related to January sales. The payment will be made in early February. Account NameDebitCredit Commissions Expense$4,470 Commissions Payable$4,470

25 A new grill is purchased and installed at a Wendys restaurant at the end of the day on January 31; $8,750 cash payment was made on that day. Account NameDebitCredit Equipment$8,750 Cash$8,750

26 The University of Florida orders 60,000 season football tickets from its printer and pays $5,410 in advance for the custom printing. The first game will be paid in September. Account NameDebitCredit Tickets Receivable$5,410 Cash$5,410

27 Carousel Mall had janitorial supplies costing $4,000 in storage. An additional $2,600 worth of supplies was purchased during January. At the end of January, $410 worth of janitorial supplies remained in storage. Assume: Purchase of supplies was properly recorded, just recording the supplies used. Account NameDebitCredit Supplies Expense$6,190 Supplies$6,190

28 An Iowa State University employee works eight hours, at $13 per hour, on January 31; however, payday is not until February 3. Account NameDebitCredit Wages Expense$104 Wages Payable$104

29 Wang Company paid $3,600 for a fire insurance policy on January 1. The policy covers 12 months beginning January 1. Account NameDebitCredit Prepaid Insurance$3,600 Cash$3,600

30 Darrius Incorporated has its delivery van repaired for $300 and charges the amount on account. Account NameDebitCredit Repairs & Maintenance Expense$300 Accounts Payable (Maint. Payable)$300

31 Hass Company, a farm equipment company, receives its phone bill at the end of January for $202 for January calls. The bill has not been paid to date. Account NameDebitCredit Phone Expense$202 Accounts Payable$202

32 Martin Company receives and pays in January a $1,285 invoice (bill) from a consulting firm for services received in January. Account NameDebitCredit Consulting Expense$1,285 Cash$1,285

33 Parillos Taxi Company pays a $595 invoice from a consulting firm for services received and recorded in December. Account NameDebitCredit Accounts payable$595 Cash$595

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