Question

Record the Financial Transactions Listed Below in Ledger format: Provide detail about the accounts that increase and decrease in the notes. Ignore the beginning and ending balances. Record only the transactions on the date given.

A) Blanton Corporation begins operations on January 2, 2019. They sell 6 million shares with a par value of $1 per share at market price of $12 per share.

B) On January 15, 2019, Blanton buys inventory worth $3.8 million. They pay for 30% of this purchase in cash and the rest on account due in 30 days.

C) On January 25, 2019, Blanton sells items from its inventory for $1,050,000. The original cost of these items is $560,000. They collect 25% in cash and the rest will be collected in 60 days.

D) On February 8, 2019, Blanton receives $310,000 for items that they cannot deliver until February 20, 2019.

E) On February 22, 2019, Blanton sells items for $250,000 on account. They inventory value of these items is $178,000. Blanton believes there is 2.5% chance this sale will be uncollectable.

F) On March 15, 2019, Blanton buys back 90,000 shares of their own stock for a market price of $10 per share

Answer 1

Date	Accounts Title and Explanation	Debit	Credit
January 2, 2019	Cash (60,000,000 * $12)	$72,000,000
	Common Stock (60,000,000 * $1)		$6,000,000
	Paid-in-Capital in excess of par value common stock		$66,000,000
	(To Record the issue of common stock)
January 15, 2019	Inventory	$3,800,000
	Cash ($3,800,000 * 30%)		$1,140,000
	Accounts Payable ($3,800,000 - $1,140,0000)		$2,660,000
	(To record purchase of inventory)
January 25, 2019	Accounts Receivable ($1,050,000 - $262,500)	$787,500
	Cash ($1,050,000 * 25%)	$262,500
	Sales revenue		$1,050,000
	(To record sales revenue)
January 25, 2019	Cost Of Goods Sold	$560,000
	Inventory		$560,000
	(To record the cost of Goods Sold)
February 8, 2019	Cash	$310,000
	Unearned Sales Revnue		$310,000
	(To record the sales paid in advance)
February 22, 2019	Accounts Receivable	$250,000
	Sales Revenue		$250,000
	(To record Sales revenue)
February 22, 2019	Cost Of Goods Sold	$178,000
	Inventory		$178,000
	(To record the cost of Goods Sold)
March 15, 2019	Treasury Stock, Common	$900,000
	Cash		$900,000
	(To record the purchase of own share)