Question

The following transactions occurred during the month of June 2016 for the Stridewell Corporation. The company owns and operates a retail shoe store.

1.	Issued 100,000 shares of common stock in exchange for $500,000 cash.
2.	Purchased furniture and fixtures at a cost of $100,000. $40,000 was paid in cash and a note payable was signed for the balance owed.
3.	Purchased inventory on account at a cost of $200,000. The company uses the perpetual inventory system.
4.	Credit sales for the month totaled $280,000. The cost of the goods sold was $140,000.
5.	Paid $6,000 in rent on the store building for the month of June.
6.	Paid $3,000 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2016.
7.	Paid $120,000 on account for the merchandise purchased in 3.
8.	Collected $55,000 from customers on account.
9.	Paid shareholders a cash dividend of $5,000.
10.	Recorded depreciation expense of $2,000 for the month on the furniture and fixtures.
11.	Recorded the amount of prepaid insurance that expired for the month.

Answer 1

Journal Entries :-

S.No.	Particulars	Debit($)	Credit($)
1.	Cash A/c Dr.	500000
	To Common Stock A/c		500000
2.	Furniture and Fixture A/c Dr.	100000
	To Cash A/c		40000
	To Notes Payable A/c		60000
3.	Inventory A/c Dr.	200000
	To Accounts Payable A/c		200000
4.	Accounts Receivable A/c Dr.	280000
	Cost of Goods Sold A/c Dr.	140000
	To Sales A/c		280000
	To Inventory A/c		140000
5.	Rent Expenses A/c Dr.	6000
	To Cash A/c		6000
6.	Pre-Paid Insurece A/c Dr.	3000
	To Cash A/c		3000
7	Accounts Payable A/c Dr.	120000
	To Cash A/c		120000
8.	Cash A/c Dr.	55000
	To Accounts Receivable A/c		55000
9.	Dividend A/c Dr.	5000
	To Cash A/c		5000
10.	Depreciation A/c Dr.	2000
	To Furniture & Fixtures A/c		2000
11.	Insurance Expenses A/c Dr. ($3000/12)	250
	To Pre-Paid Insurance A/c		250