Question

journalize

August 1	Lewis Hamilton began his business by contributing an iPad and Cash Register valued at $1,500 and video equipment valued at $6,200 and depositing $37567in a checking account in the name of the corporation in exchange for 6,000 shares, $2 par value shares of capital stock.
1	Received $15,000 proceeds from an unsecured, 9%, 5 year, interest only bank loan, due August 1, 2018. The proceeds will be used to pay daily operation costs of the company. Interest will be paid monthly on the fifth of each month; next payment day is September 5th.
1	Purchased 30 shares of Netflix, Inc. common stock as an investment. (Find stock price as of August 1, 2018). Paid a commission price of $20.00/ transation. Use the Short-term Investment (Available For Sale) account.
2	Purchased 2 Virtual Reality Chairs for $22,400, paying $2,400 cash and the balance with a zero interest bearing 36 month note.
3	Paid cash for an exclusive 4 year right to sell racing gear products from Sparcoal Racing Company, $8,000.
4	Purchased 20 helmets (Model T200), on account, for resale purposes only. Helmets cost $75 each, $1,500.00. HPR was charged shipping costs of $25.00, which was also included in the amount owed—use the Merchandise Inventory Account, terms, 2%, n/30.
4	Paid $5,500 for 3 display cases.
4	Purchased office supplies for $3,500 on account. These supplies will not be resold—use the Office Supplies Inventory account.
5	Paid $3,600 on a two-year insurance policy, effective August 1.
5	Signed a two year lease agreement. Paid 3 months of rent in advance, $4,500, plus security deposit of $1,000, total $5,500.
5	Returned 2 (Model T200) of the helmets purchased on August 4.
6	Purchased 2 helmets (Model #A20), on account, for resale purposes only. Helmets cost $80 each, $160. HPR was charged shipping costs of $25.00, which was also included in the amount owed—use the Merchandise Inventory Account, terms, 2%, n/30.
7	Hired 2 workers at $15.50 and 1 assistant at $25.00/hour.
8	Paid $8,000 in advance to Monmouth Speedway for 300 hours of track time and $15,000 for racing car rental. He rents a 2016 Mercedes C63 AMG DTM race car for $170/hr.
8	Drake paid HPR $4,000 in advance for six months of racing instructions. HPR charges $400 per hour for private instructions, which includes car and track rental.
10	Purchased 10 racing suits, on account, for resale purposes only, from Sparcoal. Each suit costs $1,000. HPR was charged shipping costs of $60.00, which was also included in the amount owed—use the Merchandise Inventory Account, terms n/30.
10	Migos and two friends paid Hamilton for 6 hours of instructional car racing training at $400 per hour, $2,400. (no taxes, for personal service)
10	Sold 3 racing suits to Migos for an upcoming video shoot, $2,000 each, and 3 helmets, $200 each, plus 7% sales tax. HPR uses first in, first out, perpetual inventory method.
12	Billed various customers $28,567for racing instructions.
13	Paid utilities for the month, $1,850.
18	Paid Sparcoal in full for August 4th purchase.
18	Purchased 5 racing suits from Sparcoal $5,300 ($1,060 each), terms 2/10, n/60, for resale purposes, on account, plus total shipping costs of $25.00.
18	HPR withholds taxes from its employees' wages and salaries, accrual and payment of a $6,000 (gross) payroll included the following:
	Social Security (FICA) Tax (Use 6.2% of gross wages)
	Federal Taxes	$1,200
	Medicare Taxes (Use 1.45% of gross wages)
	State Taxes (Use $2.7% of gross wages
	City Taxes   (Use 2% of gross wages)
	Combine the employee taxes withheld activities into one account, Employee Taxes Withheld Payable.
18	Accrue employer tax, $459 (related to August 18th payroll).   These taxes include employer portion of FICA and Medicare tax and state and Federal unemployment tax. Use Employer Tax Payable account for the total employer payroll taxes.
21	Paid Sparcoal for August 10 in full.
22	Sold 7 racing suits to Indy Mania Racing Team on account for $2,100 each. HPR uses a perpetual inventory system for its merchandise inventory sales and determines costs using first in-first out costing method. Include your supporting calculations in the "Supporting Assumptions and Calculations" schedule.
23	Collected and deposited $20,700 from customers billed on August 12.
24	Paid Monmouth Speedway for $8,000 for additional services paid in advance.
24	Using Mr. Hamilton's credit card, purchased a computer for office use $1,500.
25	Billed customers $16,200 for driving instructions.
31	Sold the video equipment acquired on August 1 for $4,800.
31	Bank returned a check for $3,000 from LeBron James for services paid on August 23. The bank charges HPR $8.00 service fee for NSF checks.
31	Paid withholding tax for August 18th payroll, including employer tax.
31	Declared and paid a $.77 per share cash dividend.

Answer 1

	Journalizing of Transactios
						(Amount$)
	Date	Particulars		Debit		Credit
August	1	Ipad & Cash Register a/c	Dr	1500
		Video Equipment a/c		6200
		Bank a/c		37567
		To Lewis Hamilton capital (6000*2)				12000
		To Securities Premium				33267
	1	Bank a/c		15000
		To Loan				15000
	1	Short term Investment a/c(338.38*30)		10151
		Commision a/c		20
		To cash				10171
	2	Virtual Reality Chairs a/c		22400
		To cash				2400
		To notes Payable				20000
	3	Intangible Assets a/c		8000
		To cash				8000
	4	Helments a/c		1500
		Shipping Cost a/c		25
		To Accounts Payable				1525
	4	Display cases a/c		5500
		To cash				5500
	4	Office Supplies Inventory a/c		3500
		To cash				3500
	5	Prepaid Insurance a/c		3600
		To bank				3600
	5	Advance Rent a/c		4500
		Security deposit a/c		1000
		To cash				5500
	5	Purchase returns a/c		150
		To Helments				150
	6	Helments a/c		160
		Shipping Cost a/c		25
		To Accounts Payable				185
	8	Monmouth Speedway a/c		8000
		To cash				8000
	8	Expenses a/c		4000
		To cash				4000
	10	Racing Suits a/c		10000
		Shipping Cost a/c		60
		To Sparcoa				10060
	10	Training exp a/c		2400
		To cash				2400
	10	Cash a/c		6600
		Sales Tax a/c		462
		To helments				642
		To Racing Suits				6420
	12	Accounts Receivable a/c		28567
		To sales				28567
	13	Utilities a/c		1850
		To cash				1850
	18	Sparcoa a/c		5194
		Discount a/c		106
		To cash				5300
	18	Social Security (FICA) Tax (6.2% *6000)		372
		Federal Taxes		1200
		Medicare Taxes (1.45% *6000)		87
		State Taxes (2.7%*6000)		162
		City Taxes   ( 2% *6000)		120
		To Employee Taxes with held payable				1941
	18	Employer portion of taxes a/c		459
		To Employer tax payable				459
	21	Sparcoa a/c		10000
		To cash				10000
	22	Indy Mania Racing Team a/c		2100
		To sales				2100
	23	Cash a/c		20700
		To Accounts Receivable				20700
	24	Monmouth Speedway a/c		8000
		To cash				8000
	24	Computer a/c		1500
		To Hamilton's				1500
	25	Accounts Receivable a/c		16200
		To sales				16200
	31	Cash a/c		4800
		Loss on Sale a/c		1400
		To Video equipment				6200
	31	Lebron james		3008
		Cheque return a/c				3000
		bank charges a/c				8
	31	Social Security (FICA) Tax (6.2% *6000)		372
		Federal Taxes		1200
		Medicare Taxes (1.45% *6000)		87
		State Taxes (2.7%*6000)		162
		City Taxes   ( 2% *6000)		120
		To cash				1941
	31	Dividend a/c (6000*77)		462000
		To cash				462000