Question

Three former college classmates have decided to pool a variety of work experiences by opening a store near campus to sell wireless equipment to students. The business has been incorporated as University Wireless.

Required: Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts that are affected, whether they increase or decrease, and the amount of the increase or decrease.

YOU MUST FOLLOW THE INSTRUCTIONS BELOW. IF YOU DON'T, YOU MAY KNOW THE CORRECT ENTRY BUT THE COMPUTER WILL NOT RECOGNIZE IT AND YOU WILL NOT RECEIVE CREDIT.

1. After each transaction description, there are several "Account" submission boxes and corresponding "Amount" submission boxes. To indicate the accounts that you think are affected, choose them from the drop-down menu. But you MUST select them in the order that they are listed in the menu. FOR EXAMPLE, if you think that Cash and Inventory are affected by a particular transaction, you must record the Cash impact first and the Inventory impact second because that is the order in which they are listed in the drop-down menu. If you record the Inventory impact first and the Cash impact second, even if they are the correct accounts and even if you have the correct dollar amounts, your answer will be considered incorrect.
2. When you record the dollar amounts, be sure to use a minus sign to indicate a decrease in the account. You don't need to use a plus sign to indicate an increase.
3. There are always more "Account" and "Amount" submission boxes available than are necessary. When you have indicated all the accounts that are affected by the transaction, you MUST select "Leave Blank" from the drop-down menu for EACH of the remaining "Account" submission boxes (you can leave the "Amount" boxes blank).
4. For transactions 3, 4, 5, and 8, you are given additional instructions. Read them carefully.
5. You get 5 tries for each transaction (8 tries for transaction #8).
6. The entries for each transaction are worth 2 points (4 points for transaction #8).

Question #1 On March 1, the three classmates opened a checking account for The Wire at a local bank. They each deposited $23,000 in exchange for shares of stock. A few of their friends also purchased stock for $12,000 that was deposited in The Wire account.

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar amount:

account dollar amount:

Question #2 The company quickly acquired $41,000 in inventory, 60% of which was paid for in cash. The rest was acquired on open accounts that were payable after 30 days.

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar amount:

account dollar amount:

Question #3 A one-year store rental lease was signed on March 1 for $1,200 per month, and rent for the first 4 months was paid in advance. [Note: Record the complete entry for the March 1 transaction first and the complete adjusting entry on March 31 second.]

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar amount:

account dollar amount:

Question #4 The owners paid $2,500 for website advertising. They were able to get a good deal because one of the company's owners also owns stock in the website company. The owners also paid $6,000 for some advertising in local newspapers. [Note: Combine both transactions into one entry].

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar amount:

account dollar amount:

Question #5 Sales were $68,000. Cost of merchandise sold was 50% of sales. 40% of sales were for cash. [Note: Record the complete entry for the sales first and the complete entry for the expenses second]

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar amount:

account dollar amount:

account: dollar amount:

Question #6 Wages and salaries in March were $11,500, of which $8,800 was actually paid to employees.

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar amount:

account dollar amount:

question #7Miscellaneous expenses were $1,800, all paid for with cash.

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar ammount:

question #8 On March 1, fixtures and equipment were purchased for $5,000 with a downpayment of $1,000 and a $4,000 note, payable in one year. Interest of 6% per year was due when the note was repaid. The estimated life of the fixtures and equipment is 9 years with no expected salvage value. [Note: Record the complete entry for the March 1 equipment purchase first, the March 31 depreciation adjusting entry second, and the March 31 interest adjusting entry third.  Also, round all answers to the nearest cent.]

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar ammount:

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar ammount:

question #9Cash dividends totaling $4,400 were paid to stockholders on March 31.

account: dollar ammount:

Account: dollar amount:

account: dollar ammount:

account: dollar ammount

account: dollar ammount:

Answer 1

1
Account	Dollar amount
Cash	81000	=(23000*3)+12000
Paid in capital	81000
Select leave blank for other columns
2
Account	Dollar amount
Cash	-24600
Inventory	41000
Accounts Payable	16400
Select leave blank for other columns
3
Account	Dollar amount
Cash	-4800
Prepaid rent	4800
Prepaid rent	-1200
Retained earnings	-1200
Leave Blank
4
Account	Dollar amount
Cash	-8500
Retained earnings	-8500
Select leave blank for other columns
5
Account	Dollar amount
Cash	27200	=68000*40%
Accounts Receivable	40800
Retained earnings	68000
Inventory	-34000	=68000*50%
Retained earnings	-34000
Leave Blank
6
Account	Dollar amount
Cash	-8800
Wages payable	2700
Retained earnings	-11500
Leave Blank
Leave Blank
7
Account	Dollar amount
Cash	-1800
Retained earnings	-1800
Leave Blank
Leave Blank
8
Account	Dollar amount
Cash	-1000
Fixtures and Equipment	5000
Notes Payable	4000
Fixtures and Equipment	-46.30	=5000/9/12
Retained earnings	-46.30
Interest Payable	20.00	=4000*6%/12
Retained earnings	-20.00
Leave Blank
9
Account	Dollar amount
Cash	-4400
Retained earnings	-4400
Select leave blank for other columns