Question

In: Accounting

Assets Cash                                        &nb

Assets

Cash                                                                                          $500,000

Accounts Receivable                                                                  700,000                             

Inventory                                                                                     300,000

Property, Plant & Equipment                                                       900,000

Accumulated Depreciation                                                    (100,000)            

Total Assets                                                                           $2,300,000

Liabilities & Equity

Accounts Payable                                                                       $300,000

Notes Payable                                                                            1,000,000

Common Stock                                                                             500,000

Retained Earnings                                                                        500,000

Total Liabilities & Equity                                                      $2,300,000

Journal Entries for January 2013

Transaction 1: Sales Return

The buyer returns merchandise to the seller.

Journal Entry:                                                                                   Dr.                              Cr.

Sales Returns & Allowances                                                      22,000

Accounts Receivable                                                                                           22,000

Transaction 2: Sales Discounts

Description: Recorded collection within 2/10, n/30 period.

Journal Entry:                                                                                    Dr.                              Cr.

Cash                                                                                                24,500

  Sales Discounts                                                                                    500

                  Accounts Receivable                                                                                           25,000

Journal Entry:                                                                                       Dr.                             Cr.

Cash                                                                                                 155,000

Sales Revenue                                                                                                      155,000

Transaction 4: Cost Flow Assumption

Recorded cost of goods sold under one of the cost flow assumptions.

Journal Entry:                                                                                     Dr.                             Cr.

Cost of Goods Sold                                                                           45,000

                Inventory                                                                                                              45,000                                                                                              

Transaction 5: Recording Estimated Uncollectible

Description: The credit manager estimates that $16,000 of sales will be uncollectible.

Journal Entry:                                                                                      Dr.                             Cr.

Bad Debts Expense                                                                         16,000

                Allowance for Doubtful Accounts                                                                        16,000

Transaction 6: Write-off of an uncollectible account

Description: The credit manager authorizes a write-off of a $5,500 balance owed by a customer.

Journal Entry:                                                                                      Dr.                             Cr.

Allowance for Doubtful Accounts                                                   5,500

                Accounts Receivable                                                                                             5,500

Transaction 7: Depreciation Expense

Recorded depreciation expense under one of the depreciation methods.

Journal Entry:                                                                                    Dr.                               Cr.

Depreciation Expense                                                                    12,000

Accumulated Depreciation                                                                                  12,000

                  Transaction 8: Investment by Stockholders
                  Description: Invested $55,000 cash in the business in exchange for common stock.
                  Journal Entry:                                                                                      Dr.                               Cr.

                  Cash                                                                                                  55,000

                                    Common Stock                                                                                                     55,000

                  Transaction 9: Dividends

                  Description: The corporation pays a dividend of $4,700 in cash to the stockholders.

                  Journal Entry:                                                                                      Dr.                              Cr.

                  Dividends                                                                                            4,700

                                    Cash                                                                                                                      4,700

                  Transaction 10: Purchase of Equipment

                  Description: Purchases computer equipment for $7,800 cash.

                  Journal Entry:                                                                                     Dr.                             Cr.

                  Equipment                                                                                           7,800

                                    Cash                                                                                                                      7,800

                Transaction 11: Purchase of Supplies on Credit

                Description: Purchases $4,800 of inventory on credit.

                Journal Entry:                                                                                       Dr.                              Cr.

                Inventory                                                                                              4,800

                                     Accounts Payable                                                                                                 4,800

5. What is the ending accounts payable balance?

A. $304,800

B.   $314,000

C.   $316,800

D. $320,000

6. What is the ending retained earnings balance?

A. $500,000

B. $545,000

C.   $554,800

D.   $567,800

7. What is the net income?

A.   $48,500

B. $59,500

C.   $65,000

D.   $68,200

8. What is the amount of total expenses?

A.   $63,000

B. $75,000

C.   $73,000

D.   $81,000

9. What is the net increase in cash for the period?

A.   $222,000

B.   $225,000

C.   $300,000

D. $325,000

10. What is the net cash provided by operating activities?

A. $179,500

B.   $186,500

C.   $183,400

D.   $178,300

11. What is the net cash used by investing activities?

A. $(7,200)

B.   $(9,200)

C.   $(8,900)

D. $(7,800)

12. What is the net cash provided by financing activities?

A.   $40,300

B.   $50,500

C.   $50,300

D.   $40,200

Solutions

Expert Solution

Answer 5.

A. $304,800

Reason:

Beginning Balance: $ 300,000

Add: Purchases of inventory on credit: $4,800

$304,800

Answer 6.

C.   $554,800

Reason:

Beginning Balance: $ 500,000

Add: Net income: $59,500

Less: Dividend paid: $ 4,700

                             $554,800

Answer 7.

B. $59,500

Reason:

Revenue: $ 155,000

Less: Sales Returns & Allowances   : $ 22,000

Less: Cost of Goods Sold: $ 45,000

Less: Bad Debts Expense: $ 16,000     

Less: Sales Discount: $ 500              

Less: Depreciation Expense: $ 12,000

                                                     $59,500

Answer 8.

C.   $73,000

Reason:

Cost of goods sold: $ 45,000

Add: Bad debt expense: $ 16,000

Add: Depreciation expense: $ 12,000

                                            $ 73,000

Note: As per answering guidelines, I am submitting answers for first four parts, for rest of the answers post question separately.

Good luck.

ekkarill92 answered 1 year ago
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