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)              800,000

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: Services Provided for Cash

Description: Receives $155,000 cash from customers for programming services it has provided.

Journal Entry:                                                                                                          Dr.                              Cr.

Cash                                                                                                                      155,000

            Sales                                                                                                                                              155,000  

Transaction 2: Receipt of Cash on Account

Description: Receives $28,000 in cash from customers who had been billed for services.

Journal Entry:                                                                                                           Dr.                              Cr.

Cash                                                                                                                          28,000                           

          Accounts Receivable                                                                                                                            28,000
          

Transaction 3: Cost Flow Assumption: LIFO

Description: Recorded $45,000 in cost of goods sold under the LIFO cost flow assumption.

Journal Entry:                                                                                                         Dr.                               Cr.

Cost of Goods Sold                                                                                                   45,000

                  Inventory                                                                                                                                    45,000

Transaction 4: Recording Depreciation Expense

Description: Recorded depreciation expense under the straight-line method.

Journal Entry:                                                                                                          Dr.                               Cr.

Depreciation Expense                                                                                               9,000

                  Accumulated Depreciation                                                                                                           9,000

Transaction 5: Sale of Plant Asset

Description: Sale of plant asset for cash. The cash received was equal to the book value.

Journal Entry:                                                                                                    Dr.                                    Cr.

Cash                                                                                                                      3,000

Accumulated Depreciation                                                                                  16,000

                  Equipment                                                                                                                                    19,000

Transaction 6: Gain on Sale of Plant Asset

Description: Sale of plant asset for cash. The cash received was $2,000 more than the book value resulting in a gain.

Journal Entry:                                                                                                        Dr.                                   Cr.

Cash                                                                                                                      5,000

Accumulated Depreciation                                                                                  16,000

                  Gain                                                                                                                                               2,000

                  Equipment                                                                                                                                      19,000

Transaction 7: Loss on Sale of Plant Asset

Description: Sale of plant asset for cash. The cash received was $500 less than the book value resulting in a loss.

Journal Entry:                                                                                                        Dr.                                   Cr.

Cash                                                                                                                         2,500

Loss                                                                                                                            500

Accumulated Depreciation                                                                                   13,000

                  Equipment                                                                                                                                     16,000

Transaction 8: Note Given to Borrow from Bank

Description: Borrowed $2,000 cash with a 60-day, 12%, $2,000 note.

Journal Entry:                                                                                                        Dr.                                    Cr.

Cash                                                                                                                      2,000

                  Notes Payable                                                                                                                                  2,000

Transaction 9: Payment of Note

Description: Paid the principal and interest on the note in Transaction 8.

Journal Entry:                                                                                                        Dr.                                      Cr.

Notes Payable                                                                                                      2,000

Interest Expense                                                                                                        40

                  Cash                                                                                                                                                2,040

Transaction 10: Bond Issue

Description: Issued a $100,000 Par Value Bond at a Discount

Journal Entry:                                                                                                         Dr.                                     Cr.

Cash                                                                                                                     96,454

                  Bonds Payable                                                                                                                                   96,454

Transaction 11: Effective Interest Amortization

Description: Recorded bond interest expense under the effective interest method.

Journal Entry:                                                                                                           Dr.                                      Cr.

Bond Interest Expense                                                                                           4,823

                  Bonds Payable                                                                                                                                     823

                  Cash                                                                                                                                                    4,000

Transaction 12: Issuing Par Value Stock at a Premium

Description: Issued common stock and received cash of $50,000 in excess of par value.

Journal Entry:                                                                                                            Dr.                         Cr.

Cash                                                                                                                       350,000

                  Common Stock , $10 Par Value                                                                                           300,000

                  Paid-in Capital in Excess of Par Value, Common Stock                                                       50,000

Transaction 13: Dividend

Description: The corporation pays a dividend of $3,800 in cash to the stockholders of Softbyte.

Journal Entry:                                                                                                             Dr.                            Cr.

Dividends                                                                                                                    3,800

            Cash                                                                                                                                                  3,800

1. What is the ending cash balance?

A.   $1,132,114

B.   $1,235,553

C.   $1,339,885

D.   $1,433,559

2. What is the ending accounts receivable balance?

$675,000

B.     $672,000

C.      $680,000

D.     $685,000

3. What is the ending inventory balance?

A.   $250,000

B.   $255,000

C. $260,000

D.   $264,000

4. What is the ending equipment balance net of accumulated depreciation?

A.   $755,000

B.   $768,000

C.   $775,000

D.   $782,000

Solutions

Expert Solution

Answer 1-A. $1,132,114
Cash
Beg. Bal.        500,000.00        2,040.00 Trans 9
Trans 1        155,000.00        4,000.00 Trans 11
Trans 2          28,000.00        3,800.00 Trans 13
Trans 5            3,000.00
Trans 6            5,000.00
Trans 7            2,500.00
Trans 8            2,000.00
Trans 10          96,454.00
Trans 12        350,000.00
End. Bal.    1,132,114.00
Answer 2-B. $672,000
Accounts Receivable
Beg. Bal.        700,000.00      28,000.00 Trans 2
End. Bal.        672,000.00
Answer 3-B. $255,000
Inventory
Beg. Bal.        300,000.00      45,000.00 Trans 3
End. Bal.        255,000.00
Answer 4-D. $782,000
Property, Plant & Equipment
Beg. Bal.        900,000.00      19,000.00 Trans 5
     19,000.00 Trans 6
     16,000.00 Trans 7
End. Bal.        846,000.00
Accumulated Depreciation
Beg. Bal.    100,000.00
Trans 5          16,000.00        9,000.00 Trans 4
Trans 6          16,000.00
Trans 7          13,000.00
End. Bal.      64,000.00
Ending Equipment Balance (Net) = $846,000 - $64,000
Ending Equipment Balance (Net) = $782,000

ekkarill92 answered 1 year ago
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