Question

Instructions: prepare any necessary journal entries for the above business activities.

The following information pertains to the business activities of the Hartman Company for the year ended on 12/31/2019

1.   Stockholders invested $140,000 cash in the company on 1/1/2019

2.   Purchased equipment costing $35,000 for $15,000 in cash and the remainder on credit on 1/15/2019.

3.   Purchased supplies for $1,800 on 1/17/2019.

4.   Paid $3,600 for a one-year insurance policy on 4/1/2019.

5. Singed a lease contract for the office building and paid $4,000 as a security deposit on 5/1/2019.

6.   Hired an administrative assistant at an annual salary of $48,000 on 6/1/2019.

7.   Purchased inventory costing $260,000 for $100,000 in cash and the remainder on credit on 6/2/2019

8. Paid off what Hartman owes for the purchase of inventory in transaction "7" on 6/12/2019.

9. Sold inventory costing $180,000 for $350,000 in 2019.

10. Total wage of $70,000 were paid in 2019.

11. Dividends of $4,000 were paid for 2019.

Answer 1

Date	Account Title	Debit	Credit
01/01/2019	Cash	140,000
	Common Stock		140,000
	(Capital Introduced)
15/01/2019	Equipment	35,000
	Cash		15,000
	Accounts Payable		20,000
	(Purchase of equipment on cash and credit)
17/01/2019	Supplies	1,800
	Cash		1,800
	(Purchase of Supplies)
01/04/2019	Pre Paid Insurance	3,600
	Cash		3,600
	(Payment of Insurance)
01/05/2019	Property Purchase Deposit	4,000
	Cash		4,000
	(payment of Security Deposit)
	Merely signing a contract does not by itself require a journal entry
	The property purchase deposit is a current asset account representing an amount recoverable
	in the event that the purchase does not proceed.
01/06/2019	Hiring staff doesn’t require journal entry
02/06/2019	Inventory	260,000
	Cash		100,000
	Accounts Payable		160,000
	(Purchase of inventory on cash and credit)
12/06/2019	Accounts Payable	160,000
	Cash		160,000
	(Payment to Party)
31/12/2019	cost of Goods Sold	180,000
	Inventory		180,000
	Accounts Receivable	350,000
	Sales		350,000
	(Sale of Goods)
31/12/2019	Salaries & wages	70,000
	Cash		70,000
	(Payment of salary)
31/12/2019	Dividends
	Cash
	(Payment of Dividend)