Generally Accepted Accounting Principles and Cash

1319 WordsFeb 5, 20136 Pages
financial accountingBBUS 2210 CHAPTER 3 JOURNAL ENTRIES AND ADJUSTING JOURNAL ENTRIES EXTRA PROBLEMS DAILY JOURNAL ENTRIES Model trains for sale to toy stores are produced by Whistle Stop Incorporated, a small manufacturing company. Whistle Stop also has a small service department that repairs customers’ model trains for a fee. The company has been in business for five years. At the end of the most recent fiscal year, November 30, 2011, the accounting records reflected total assets of $500,000 and total liabilities of $200,000. During the current fiscal year ending November 30, 2012, the following summarized events occurred: a. Issued additional common shares for $200,000. b. Borrowed $120,000 cash from the bank…show more content…
The interest will be paid when the loan is repaid on September 30, 2013. f. In December, the 2012 property tax bill for $1,600 was received from the city. The taxes, which have not been recorded, will be paid on February 15, 2013. g. On December 31, 2012, the company completed the work on a contract for an out-of-province company for $7,900 payable by the customer within 30 days. No cash has been collected and no journal entry has been made for this transaction. h. On July 1, 2012, the company purchased a new hauling van. Depreciation for July to December 2012 estimated to total $2,750, has not been recorded. i. At December 31, 2012, wages of $9,000 were earned by employees but not yet paid. The employees will be paid on the next payroll date, which is January 13, 2013. j. On December 1, 2012, the company collected two months’ contract revenue of $4,500. At that date, Brokeback debited Cash and credited Unearned Contract Revenue for $4,500. One-half of it has now been earned but not yet recorded. a. Brokeback Towing Company | General Journal | Page 1 | a. | Insurance expense | 100 | | | Prepaid insurance | | 100 | | $600 x 6/36 = $100 | | | b. | Office supplies expense | 700 | | | Office supplies | | 700 | | $1,000 - $300 = $700 | | | c. | Repairs expense | 800 | | | Accounts payable | | 800 | d. | Unearned contract revenue | 700
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