Question

Assume you are interviewing for a part-time accounting job at Soda Pink Inc., and the interviewer gives you the following list of company transactions in September 2019.

Sep 1 Received $200,000 for capital stock issued.

2 Paid $23,000 cash to employee for wages earned in September 2019.

4 Purchased $75,000 of equipment on account.

5 Paid utilities of $1,800 for September 2019.

9 Paid $1,500 cash for September’s insurance premium.

11 Provided services for $70,000, with $20,000 received in cash and the remaining balance on credit.

  15 Purchased $5,000 of supplies on account.

21 Received $25,000 from customers as payments on their accounts.

25 Paid $77,500 of accounts payable.

Required:

1. Journalize each of the transactions for September.
2. Set up T-accounts, and post each of the journal entries made in (a).
3. If the business owners wanted to know at any given time how much cash the company had, where would you tell the owners to look? Why?

Answer 1

A	Journal entries
				Debit	Credit
1-Sep	Cash A/c   Dr		200,000.00
	To Common Stock		20,000.00
	Being stock issued for new capital now accounted for
2-Sep	Wages a/c dr		23,000.00
	To cash A/c			23,000.00
	Being Wages for september paid by cash
4-Sep	Equipment A/c DR		75,000.00
	TO Cash	Accounts payable		75,000.00
	Being Equipment purchased on account
5-Sep	Utilities Expense A/C Dr	1,800.00
	TO Cash A/C			1,800.00
	Being Utilities bill for september paid for
9-Sep	Insurance A/C dr		1,500.00
	TO Cash A/C			1,500.00
	Being insurancep remium for september paid for
11-Sep	Accounts receivables A/C DR	50,000.00
	Cash A/C Dr		20,000.00
	TO Sale		70,000.00
	Beibng services renders now accouted for
15-Sep	Supplies Expense A/C Dr	5,000.00
	To Accounts payable A/C		5,000.00
	Being Supplies issued from stock now accounted for
21-Sep	Cash A/C Dr		25,000.00
	To Accounts receivables		25,000.00
	Being payment received from customer accounted for
25-Sep	Accounts payable A/C dr	77,500.00
	To Cash A/C		77,500.00
	Being account payable due paid accounted for

B -T Accounts
Cash Account/Bank
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
1-Sep	Common stock	200,000.00	2-Sep	Wages expenses	23,000.00
11-Sep	To sale	20,000.00	5-Sep	Utilities Expense	1,800.00
21-Sep	Account receivable control A/c	25,000.00	9-Sep	Insurance	1,500.00
			25-Sep	Accounts Payable	77,500.00
				bal b/d	141,200.00
		245,000.00			245,000.00
Account receivable control A/c
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
11-Sep	Sales	50,000.00	21-Sep	Cash	25,000.00
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
		50,000.00			25,000.00
Wages
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
2-Sep	Cash	23,000.00
				By p&L A/C	23,000.00
		23,000.00			23,000.00
Equipment
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
4-Sep	Account payable	75000
				By Bal c/d	75,000.00
		75,000.00			75,000.00

Common stock
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
		-	1-Sep	Cash	200,000.00
	To Bal c/d	200,000.00
		200,000.00			200,000.00
Account payable control A/c
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
25-Sep	Cash	77500	4-Sep	Equipment	75000
			15-Sep	Supplies	5000
	To Bal c/d	80,000.00
		80,000.00			80,000.00
Insurance
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
9-Sep	Cash	1,500.00
				By Bal c/d	1,500.00
		1,500.00			1,500.00
Supplies
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
15-Sep	Accounts payable	5000
				By Bal c/d	5,000.00
		5,000.00			5,000.00
Utilities Expesne
				(Amount in $)
Date	Account	Debit	Date	Account	Credit
5-Sep	Cash	1,800.00
				By Bal c/d	1,800.00
		1,800.00			1,800.00

C) we tell the owner to look into cash ledger account for knowing how much cash balance the company has as cash ledger reflects all the transactions of  collection and payment  happened .