Question

1. Jane Doe is starting a new Software Services company, JaneSoft, Inc. She pays $20,000 to the company in return for 100 shares of common stock. Prepare the journal entry required to record this transaction in JaneSoft, Inc.’s General Journal.

  

  

2. Bob's Burgers, Inc. purchases $7,000 of kitchen equipment from Viking on account. Prepare the journal entry required to record this transaction in Bob's Burger's General Journal.   

  

  

3. On April 1st Sammys AutoBody, Inc. paid $2,700 for office supplies which they estimate should last them several months. A physical count of the supplies on April 30th shows the supplies still on hand equals $1,900.

a) Prepare the General Journal entry recording the purchase of the supplies       

b) Prepare the Adjusting Entry required as of April 30th

  

  

4. On May 29th TIMSOFT, INC. completed a contract with BobCo to provide them with software services to be performed over the next few months. At the time of signing, BobCo issued a check to TIMSOFT for $10,000. As of May 31st, TIMSOFT had not performed any services on the contract. During the month of June TIMSOFT performed 50% of the contracted services.

a) Prepare the journal entry recording the receipt of the cash from BobCo in May.          

b) Prepare the adjusting journal entry required as of June 30th

  

  

5. On June 1st Pat's Pets, Inc. purchased two full page ads from the local newspaper on account. Total cost of the ads is $3,600. The first ad ran on July 4th, the second ad ran on July 10th. The final ad will run on September 5th.       

a) Prepare the journal entry to record the purchase of the ads in June.                   

b) Prepare the adjusting entry required as of July 31st.  

   

           

Answer 1

1.

Account Titles	Debit	Credit
Cash	$         20,000
Common Stock		$         20,000

2.

Account Titles	Debit	Credit
Equipment	$           7,000
Accounts Payable		$           7,000

3. a. April 1

Account Titles	Debit	Credit
Office Supplies	$           2,700
Cash		$           2,700

b. April 30

Account Titles	Debit	Credit
Supplies Expense	$              800
Office Supplies		$              800

4.a. May 29

Account Titles	Debit	Credit
Cash	$         10,000
Unearned Service Revenue		$         10,000

b. June 30

Account Titles	Debit	Credit
Unearned Service Revenue	$           5,000
Service Revenue		$           5,000

5.a. June 1

Account Titles	Debit	Credit
Prepaid Advertising	$           3,600
Cash		$           3,600

b. July 31

Account Titles	Debit	Credit
Advertising Expense	$           2,400
Prepaid Advertising		$           2,400