Presentation on theme: "Journal Entries for Expense Transactions"— Presentation transcript:
1Journal Entries for Expense Transactions Chapter 3Journal Entries for Expense Transactions
2Homework E3-5 + NE - Transaction Assets Liab SE Revenues Expenses Net Incomea. Issued stock to organizers for cash+NEPurchased equipment on creditc. Declared and paid cash dividends-d. Earned revenue, collected cashe. Incurred expenses, on creditf. Earned revenue, on creditg. Paid cash on accounth. Incurred expenses, paid cash
3Homework E3-5 + NE +/- - Transaction Assets Liab SE Revenues Expenses Net Incomei. Earned revenue, collected 3/4ths in cash, balance on credit.+NEj. Borrowed cash from local bankCollected cash from customers on account+/-l. Experienced theft (a loss) of $100 cash-m. Incurred expenses, paid 4/5ths in cash, balance on creditn. Paid income tax expense for the period
5McGraw-Hill Publishing Company uses $2,754 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 NameDebitCreditUtilities Expense$2,754Utilities Payable
6At the beginning of January, Turner Construction Company pays $846 for magazine advertising to run in monthly publications of the first three months of the year.Account NameDebitCreditPrepaid Advertising$846Cash
7ASSUME: No Salaries Payable has been previously recorded. Dell pays its computer service technicians $379,500 in salaries for two weeks ended January 7.ASSUME: No Salaries Payable has been previously recorded.Account NameDebitCreditSalaries Expense$379,500Cash
8The University of Florida orders 60,000 season football tickets from its printer and pays $7,610 in advance for the custom printing. The first game will be paid in September. Answer from the University's standpoint.Account NameDebitCreditPrepaid Tickets$7,610Cash
9The campus bookstore receives 500 accounting texts at a cost of $89 each. The terms indicate that payment is due within 30 days of delivery.Account NameDebitCreditInventory$44,500Accounts payable
10During the last week of January, the campus bookstore sold 450 accounting texts received in part e at a sales price of $150 each.Assume cost data from part e (cost of $89 per book)Account NameDebitCreditCash$67,500Sales RevenueAccount NameDebitCreditCost of Goods Sold$40,050Inventory
11Fucillo Hyundai, Inc. pays its salespersons $13,200 in commissions related to December automobile sales.Assume: Company had previously recorded commissions payable.Account NameDebitCreditCommissions Payable$13,200Cash
12On January 31, Fucillo Hyundai, Inc On January 31, Fucillo Hyundai, Inc. determines that it will pay its salespersons $14,470 in commissions related to January sales. The payment will be made in early February. Answer from Fucillo’s perspective.Account NameDebitCreditCommissions Expense$14,470Commissions Payable
13A new grill is purchased and installed at a Wendy’s restaurant at the end of the day on January 31; a $12,750 cash payment was made on that day.Account NameDebitCreditEquipment$12,750Cash
14Carousel Center Mall had janitorial supplies costing $4,000 in storage Carousel Center 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, $1,410 worth of janitorial supplies remained in storage.Assume: Purchase of supplies was properly recorded, just recording the supplies used.Account NameDebitCreditSupplies Expense$5,190Supplies
15An Iowa State University employee works eight hours, at $13 per hour, on January 31; however, payday is not until February 3. Answer from the perspective of the university.Account NameDebitCreditWages Expense$104Wages Payable
16Wang Company paid $3,600 for a fire insurance policy on January 1 Wang Company paid $3,600 for a fire insurance policy on January 1. The policy covers 12 months beginning January 1.Account NameDebitCreditPrepaid Insurance$3,600Cash
17Darrius Incorporated has its delivery van repaired in January for $300 and charges the amount on account.Account NameDebitCreditRepairs & Maintenance Expense$300Accounts Payable (Maint. Payable)
18Hass 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 NameDebitCreditTelephone Expense$202Accounts Payable
19Martin Company receives and pays in January a $1,285 invoice (bill) from a consulting firm for services received in January.Account NameDebitCreditConsulting Expense$1,285Cash
20Parillo’s Taxi Company pays a $595 invoice from a consulting firm for services received and recorded in December.Account NameDebitCreditAccounts payable$595Cash
21Phillips-Van Heusen Corporation completes production of 500 men’s shirts ordered by Macy’s 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 NameDebitCreditCost of Goods Sold$5,000Inventory
22E3-13 Do in your Groups PREPARE JOURNAL ENTRIES Determine Cash Flow Category(Operating, Investing, Financing, Non-Cash Operating, Non-Cash Investing and Financing)
23a. Received $80,000 cash from each of the two shareholders to form the corporation, in addition to $2,000 in accounts receivable, $5,300 in equipment, a van (equipment) appraised at a fair market value of $13,000 and $1,200 in supplies.Account NameDebitCreditCash$160,000Accounts Receivable$ 2,000Equipment$ 18,300Supplies$ 1,200Contributed Capital$181,500Cash flow from FINANCING ACTIVITIES.
24b. Purchased a vacant store for sale in a good location for $360,000, making a $72,000 cash down payment and signing a 10-year mortgage from a local bank for the rest.Account NameDebitCreditBuilding$360,000Cash$ 72,000Notes Payable$288,000Cash flow from INVESTING ACTIVITIES ($72,000) and Non-Cash Investing and Financing Activity ($288,000).
25c. Borrowed $50,000 from the local bank on a 10%, one year note. Account NameDebitCreditCash$50,000Notes PayableCash flow from FINANCING ACTIVITIES.
26Purchased and used food and paper supplies costing 10,830 in March; paid cash. Purchase of Supplies:Use of Supplies:Account NameDebitCreditSupplies$10,830CashCash flow from OPERATING ACTIVITIES.Account NameDebitCreditSupplies Expense$10,830SuppliesNon-Cash OPERATING ACTIVITIES.
27e. Catered four parties in March for $4,200; $1,600 was billed and the rest was received in cash. Account NameDebitCreditCash$2,600Accounts Receivable$1,600Catering Revenue$4,200Cash flow from OPERATING ACTIVITIES ($2,600); Non-Cash Operating Activity ($1,600).
28f. Made and sold food at the retail store for $11,900 cash f. Made and sold food at the retail store for $11,900 cash. (assume the cost of these sales was already recorded as part of transaction d.)Account NameDebitCreditCash$11,900Food Sales RevenueCash flow from OPERATING ACTIVITIES.
29g. Received a telephone bill for March to be paid in April. Account NameDebitCreditTelephone Expense$420Telephone PayableNon-Cash OPERATING ACTIVITIES.
30h. Paid $363 in gas for the van in March. Account NameDebitCreditGas Expense$363CashCash flow from OPERATING ACTIVITIES.
31i. Paid $6,280 in wages to employees who worked in March. Account NameDebitCreditWages Expense$6,280CashCash flow from OPERATING ACTIVITIES.
32j. Paid a $300 dividend from the corporation to EACH owner. Account NameDebitCreditRetained Earnings$600CashCash flow from FINANCING ACTIVITIES.
33k. Purchased $50,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $20,000 (added to the cost of the building); paid cash.Account NameDebitCreditEquipment$50,000Building$20,000Cash$70,000Cash flow from INVESTING ACTIVITIES.