A Accounts Payable AA Losses due to fire B Accounts Receivable BB Merchandise Inventory E Accumulated Depreciation—Equip EE Notes Payable F Allowance for Doubtful Accounts FF Payroll Tax Expense G Bad Debt Expense GG Premium on Bonds Payable H Bonds Payable HH Prepaid Insurance I Building II Prepaid Rent J Capital Lease Payable JJ Rent Expense K Cash KK Rent Revenue L Cost of Goods Sold LL Retained Earnings M Depreciation Expense MM Salaries and Wages Expense N Discount on Bonds Payable NN Salaries and Wages Payable O Dividends OO Sales Commission Expense P Equipment PP Sales Commission Payable Q Fed Income Tax Payable QQ Sales Returns R Fed Unemployment Tax Payable RR Sales Revenues S FICA Taxes Payable SS Sales Taxes Payable T Income Summary TT Service Revenue U Insurance Expense UU State Income Tax Payable V Interest Expense VV State Unemployment Tax Payable W Interest Payable WW Supplies X Interest Receivable XX Supplies Expense Y Interest Revenue YY Unearned Rent Revenue Z Land ZZ Unearned Service Revenue Example of Journal Entry: K3000D,B2000D,TT5000C Where K denotes Cash account, 3000 is the amount, D stands for debit, B denotes Accounts Receivable, 2000 is the amount, D stands for debit, TT denotes Service Revenues, 5000 is the amount, and C stands for credit. The letters are in capital. Comma is used to separate the changes in each account. Don’t use dollar sign, decimal point, or space in any place. If in an entry requires more than one debit or credit accounts, first enter debit accounts in order of dollar amount – large amount to small amount, then the credit accounts in order of dollar amount – large amount to small amount. Question: Company paid cash for the following items related to the construction of a new shop. Make a composite journal entry to record the transaction.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter2: Asset And Liability Valuation And Income Recognition

Section: Chapter Questions

Problem 11PC: Costs to Be Included in Historical Cost Valuation. At a cost of 200,000, Assume In-N-Out Burger...

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Question

A	Accounts Payable	AA	Losses due to fire
B	Accounts Receivable	BB	Merchandise Inventory
E	Accumulated Depreciation—Equip	EE	Notes Payable
F	Allowance for Doubtful Accounts	FF	Payroll Tax Expense
G	Bad Debt Expense	GG	Premium on Bonds Payable
H	Bonds Payable	HH	Prepaid Insurance
I	Building	II	Prepaid Rent
J	Capital Lease Payable	JJ	Rent Expense
K	Cash	KK	Rent Revenue
L	Cost of Goods Sold	LL	Retained Earnings
M	Depreciation Expense	MM	Salaries and Wages Expense
N	Discount on Bonds Payable	NN	Salaries and Wages Payable
O	Dividends	OO	Sales Commission Expense
P	Equipment	PP	Sales Commission Payable
Q	Fed Income Tax Payable	QQ	Sales Returns
R	Fed Unemployment Tax Payable	RR	Sales Revenues
S	FICA Taxes Payable	SS	Sales Taxes Payable
T	Income Summary	TT	Service Revenue
U	Insurance Expense	UU	State Income Tax Payable
V	Interest Expense	VV	State Unemployment Tax Payable
W	Interest Payable	WW	Supplies
X	Interest Receivable	XX	Supplies Expense
Y	Interest Revenue	YY	Unearned Rent Revenue
Z	Land	ZZ	Unearned Service Revenue

Example of Journal Entry: K3000D,B2000D,TT5000C
Where K denotes Cash account, 3000 is the amount, D stands for debit, B denotes Accounts Receivable, 2000 is the amount, D stands for debit, TT denotes Service Revenues, 5000 is the amount, and C stands for credit. The letters are in capital. Comma is used to separate the changes in each account. Don’t use dollar sign, decimal point, or space in any place. If in an entry requires more than one debit or credit accounts, first enter debit accounts in order of dollar amount – large amount to small amount, then the credit accounts in order of dollar amount – large amount to small amount.

Question: Company paid cash for the following items related to the construction of a new shop. Make a composite journal entry to record the transaction.

1
Purchase of land
2
Contractor for construction of the shop building
3 Excavation costs for new building
Commission fee paid to real estate agency
4
5
6
00
8
Equipment for shop
Interest paid on borrowed money of which $5,000 was during
construction of new shop
Cost of filling and grading the land
$20,000
80,000
10,000
1,500
8,000
8,000
3,000

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