Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Accounting rules for Journal entries : To record increase balance of account : Debit assets, expenses, losses and credit liabilities, capital, revenue and gains. To record decrease balance of account : Credit assets, expenses, losses and debit liabilities, capital, revenue and gains. To Determine: The sales revenue for the month of December.

Question

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Answer 1

Question

Chapter 2, Problem 2.11P

(1) (a)

To determine

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

To Determine: The sales revenue for the month of December.

(1) (a)

Expert Solution

Explanation of Solution

Determine the sales revenue for the month of December.

Sales Revenue:

Cash receipts from Customers]=Sales revenue (+Decrease in Accounts Receivable OR − Increase in Accounts Receivable)⇒Sales revenue = [(Cash receipts from Customers) (−Decrease in Accounts Receivable OR + Increase in Accounts Receivable)]

Working Note:

Sales Revenue = Cash receipts from Customers −Decrease in Accounts Receivable=$80,000 −($10,000−$3,000)= $80,000−$7,000= $73,000

Conclusion

Thus, the amount of sales revenue is $73,000.

(1) (b)

To determine

The cost of goods sold for the month of December.

(1) (b)

Expert Solution

Explanation of Solution

Determine the cost of goods sold for the month of December.

Compute the amount of cost of goods sold:

Cash payment to suppliers]=Cost of Goods Sold (+ Decrease in Accounts Payable/ Increase in Inventory OR − Increase in Accounts Payable / Decrease in Inventory)

⇒Cost of goods sold =[ Cash Payments to Suppliers(− Decrease in Accounts Payable/ Increase in Inventory OR + Increase in Accounts Payable / Decrease in Inventory)]

Working Note:

⇒Cost of goods sold =[Cash Payments to Suppliers (+ Increase in Accounts Payable+Decrease in Inventory)]⇒Cost of goods sold = $60,000[+3,000($15,000−$12,000)+$1,000($7,000−$6,000)]⇒Cost of goods sold = $64,000

Conclusion

Thus, the amount of cost of goods sold is $64,000.

(1) (c)

To determine

The insurance expense for the month of December.

(1) (c)

Expert Solution

Explanation of Solution

Determine the insurance expense for the month of December.

Insurance Expense:

Cash payments for Insurance Expense] = Insurance Expenses{+ Increase in Prepaid Insurance OR− Decrease in Prepaid Insurance }⇒Insurance Expenses= [(Cash payments for Insurance Expense){− Increase in Prepaid Insurance OR+Decrease in Prepaid Insurance }]

Insurance Expenses= [(Cash payments for Insurance Expense)− Increase in Prepaid Insurance ]= $5,000−2,500($7,500−$5,000)= $2,500

Conclusion

Thus, the insurance expenses are $2,500.

(1) (d)

To determine

The salaries and wages expense for the month of December.

(1) (d)

Expert Solution

Explanation of Solution

Determine the salaries and wages expense for the month of December.

Calculate the cash payments for Salaries and wages expenses.

Cash payments for Salries and Wages]=[Salaries and Wages expense(+ Decrease in salaries and wages payable OR− Increase in salaries and wages payable)]⇒Salaries and Wages Expense ]=[ (Cash payments for Salries and Wages)(− Decrease in salaries and wages payable OR+Increase in salaries and wages payable)]

Salaries and Wages expense =[ (Cash payments for Salries and Wages)− Decrease in salaries and wages payable]= $10,000−$2,000($5,000−$2,000)= $8,000

Thus, the Salaries and wages expenses are $8,000.

2.

To determine

To Prepare: The summary journal entries to record the month’s sales, and cost of those sales.

2.

Expert Solution

Explanation of Solution

Sales Entry:

The following is the accounting equation for the entry:

Assets = Liabilities + Stockholder's Equity+73,000 (Accounts Receivable) = +$$73,000(Sales Revenue)

Record the following journal entry in the general journal:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accounts Receivable (A+)		73,000
	Sales Revenue (E+)			73,000
	(To record the revenues on account)

Table (1)

Accounts Receivable is an asset account, and increased by $73,000. Therefore, debit accounts receivable account with $73,000.
Sales revenue is revenue account, and increased by $73,000. Therefore, credit Sales revenue account with $73,000.

Cost of goods sold Entry:

The following is the accounting equation for the entry.

Assets = Liabilities + Stockholders' Equity−$64,000(Inventory) = − $64,000(Cost of Goods Sold)

The following is the accounting entry:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Cost of Goods Sold (E–)		64,000
	Inventory (A–)			64,000
	(To record the cost of goods sold)

Table (2)

Cost of goods sold is an expense account, and increased which has decreased the equity by $64,000. Therefore, debit cost of goods sold account with $64,000.
Inventory is an asset and decreased by $64,000. Therefore, credit the inventory account with $64,000.

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Answer 2

Question

Chapter 2, Problem 2.11P

(1) (a)

To determine

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

To Determine: The sales revenue for the month of December.

(1) (a)

Expert Solution

Explanation of Solution

Determine the sales revenue for the month of December.

Sales Revenue:

Cash receipts from Customers]=Sales revenue (+Decrease in Accounts Receivable OR − Increase in Accounts Receivable)⇒Sales revenue = [(Cash receipts from Customers) (−Decrease in Accounts Receivable OR + Increase in Accounts Receivable)]

Working Note:

Sales Revenue = Cash receipts from Customers −Decrease in Accounts Receivable=$80,000 −($10,000−$3,000)= $80,000−$7,000= $73,000

Conclusion

Thus, the amount of sales revenue is $73,000.

(1) (b)

To determine

The cost of goods sold for the month of December.

(1) (b)

Expert Solution

Explanation of Solution

Determine the cost of goods sold for the month of December.

Compute the amount of cost of goods sold:

Cash payment to suppliers]=Cost of Goods Sold (+ Decrease in Accounts Payable/ Increase in Inventory OR − Increase in Accounts Payable / Decrease in Inventory)

⇒Cost of goods sold =[ Cash Payments to Suppliers(− Decrease in Accounts Payable/ Increase in Inventory OR + Increase in Accounts Payable / Decrease in Inventory)]

Working Note:

⇒Cost of goods sold =[Cash Payments to Suppliers (+ Increase in Accounts Payable+Decrease in Inventory)]⇒Cost of goods sold = $60,000[+3,000($15,000−$12,000)+$1,000($7,000−$6,000)]⇒Cost of goods sold = $64,000

Conclusion

Thus, the amount of cost of goods sold is $64,000.

(1) (c)

To determine

The insurance expense for the month of December.

(1) (c)

Expert Solution

Explanation of Solution

Determine the insurance expense for the month of December.

Insurance Expense:

Cash payments for Insurance Expense] = Insurance Expenses{+ Increase in Prepaid Insurance OR− Decrease in Prepaid Insurance }⇒Insurance Expenses= [(Cash payments for Insurance Expense){− Increase in Prepaid Insurance OR+Decrease in Prepaid Insurance }]

Insurance Expenses= [(Cash payments for Insurance Expense)− Increase in Prepaid Insurance ]= $5,000−2,500($7,500−$5,000)= $2,500

Conclusion

Thus, the insurance expenses are $2,500.

(1) (d)

To determine

The salaries and wages expense for the month of December.

(1) (d)

Expert Solution

Explanation of Solution

Determine the salaries and wages expense for the month of December.

Calculate the cash payments for Salaries and wages expenses.

Cash payments for Salries and Wages]=[Salaries and Wages expense(+ Decrease in salaries and wages payable OR− Increase in salaries and wages payable)]⇒Salaries and Wages Expense ]=[ (Cash payments for Salries and Wages)(− Decrease in salaries and wages payable OR+Increase in salaries and wages payable)]

Salaries and Wages expense =[ (Cash payments for Salries and Wages)− Decrease in salaries and wages payable]= $10,000−$2,000($5,000−$2,000)= $8,000

Thus, the Salaries and wages expenses are $8,000.

2.

To determine

To Prepare: The summary journal entries to record the month’s sales, and cost of those sales.

2.

Expert Solution

Explanation of Solution

Sales Entry:

The following is the accounting equation for the entry:

Assets = Liabilities + Stockholder's Equity+73,000 (Accounts Receivable) = +$$73,000(Sales Revenue)

Record the following journal entry in the general journal:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accounts Receivable (A+)		73,000
	Sales Revenue (E+)			73,000
	(To record the revenues on account)

Table (1)

Accounts Receivable is an asset account, and increased by $73,000. Therefore, debit accounts receivable account with $73,000.
Sales revenue is revenue account, and increased by $73,000. Therefore, credit Sales revenue account with $73,000.

Cost of goods sold Entry:

The following is the accounting equation for the entry.

Assets = Liabilities + Stockholders' Equity−$64,000(Inventory) = − $64,000(Cost of Goods Sold)

The following is the accounting entry:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Cost of Goods Sold (E–)		64,000
	Inventory (A–)			64,000
	(To record the cost of goods sold)

Table (2)

Cost of goods sold is an expense account, and increased which has decreased the equity by $64,000. Therefore, debit cost of goods sold account with $64,000.
Inventory is an asset and decreased by $64,000. Therefore, credit the inventory account with $64,000.

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Answer 3

Question

Chapter 2, Problem 2.11P

(1) (a)

To determine

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

To Determine: The sales revenue for the month of December.

(1) (a)

Expert Solution

Explanation of Solution

Determine the sales revenue for the month of December.

Sales Revenue:

Cash receipts from Customers]=Sales revenue (+Decrease in Accounts Receivable OR − Increase in Accounts Receivable)⇒Sales revenue = [(Cash receipts from Customers) (−Decrease in Accounts Receivable OR + Increase in Accounts Receivable)]

Working Note:

Sales Revenue = Cash receipts from Customers −Decrease in Accounts Receivable=$80,000 −($10,000−$3,000)= $80,000−$7,000= $73,000

Conclusion

Thus, the amount of sales revenue is $73,000.

(1) (b)

To determine

The cost of goods sold for the month of December.

(1) (b)

Expert Solution

Explanation of Solution

Determine the cost of goods sold for the month of December.

Compute the amount of cost of goods sold:

Cash payment to suppliers]=Cost of Goods Sold (+ Decrease in Accounts Payable/ Increase in Inventory OR − Increase in Accounts Payable / Decrease in Inventory)

⇒Cost of goods sold =[ Cash Payments to Suppliers(− Decrease in Accounts Payable/ Increase in Inventory OR + Increase in Accounts Payable / Decrease in Inventory)]

Working Note:

⇒Cost of goods sold =[Cash Payments to Suppliers (+ Increase in Accounts Payable+Decrease in Inventory)]⇒Cost of goods sold = $60,000[+3,000($15,000−$12,000)+$1,000($7,000−$6,000)]⇒Cost of goods sold = $64,000

Conclusion

Thus, the amount of cost of goods sold is $64,000.

(1) (c)

To determine

The insurance expense for the month of December.

(1) (c)

Expert Solution

Explanation of Solution

Determine the insurance expense for the month of December.

Insurance Expense:

Cash payments for Insurance Expense] = Insurance Expenses{+ Increase in Prepaid Insurance OR− Decrease in Prepaid Insurance }⇒Insurance Expenses= [(Cash payments for Insurance Expense){− Increase in Prepaid Insurance OR+Decrease in Prepaid Insurance }]

Insurance Expenses= [(Cash payments for Insurance Expense)− Increase in Prepaid Insurance ]= $5,000−2,500($7,500−$5,000)= $2,500

Conclusion

Thus, the insurance expenses are $2,500.

(1) (d)

To determine

The salaries and wages expense for the month of December.

(1) (d)

Expert Solution

Explanation of Solution

Determine the salaries and wages expense for the month of December.

Calculate the cash payments for Salaries and wages expenses.

Cash payments for Salries and Wages]=[Salaries and Wages expense(+ Decrease in salaries and wages payable OR− Increase in salaries and wages payable)]⇒Salaries and Wages Expense ]=[ (Cash payments for Salries and Wages)(− Decrease in salaries and wages payable OR+Increase in salaries and wages payable)]

Salaries and Wages expense =[ (Cash payments for Salries and Wages)− Decrease in salaries and wages payable]= $10,000−$2,000($5,000−$2,000)= $8,000

Thus, the Salaries and wages expenses are $8,000.

2.

To determine

To Prepare: The summary journal entries to record the month’s sales, and cost of those sales.

2.

Expert Solution

Explanation of Solution

Sales Entry:

The following is the accounting equation for the entry:

Assets = Liabilities + Stockholder's Equity+73,000 (Accounts Receivable) = +$$73,000(Sales Revenue)

Record the following journal entry in the general journal:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accounts Receivable (A+)		73,000
	Sales Revenue (E+)			73,000
	(To record the revenues on account)

Table (1)

Accounts Receivable is an asset account, and increased by $73,000. Therefore, debit accounts receivable account with $73,000.
Sales revenue is revenue account, and increased by $73,000. Therefore, credit Sales revenue account with $73,000.

Cost of goods sold Entry:

The following is the accounting equation for the entry.

Assets = Liabilities + Stockholders' Equity−$64,000(Inventory) = − $64,000(Cost of Goods Sold)

The following is the accounting entry:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Cost of Goods Sold (E–)		64,000
	Inventory (A–)			64,000
	(To record the cost of goods sold)

Table (2)

Cost of goods sold is an expense account, and increased which has decreased the equity by $64,000. Therefore, debit cost of goods sold account with $64,000.
Inventory is an asset and decreased by $64,000. Therefore, credit the inventory account with $64,000.

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Answer 4

Question

Chapter 2, Problem 2.11P

(1) (a)

To determine

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

To Determine: The sales revenue for the month of December.

(1) (a)

Expert Solution

Explanation of Solution

Determine the sales revenue for the month of December.

Sales Revenue:

Cash receipts from Customers]=Sales revenue (+Decrease in Accounts Receivable OR − Increase in Accounts Receivable)⇒Sales revenue = [(Cash receipts from Customers) (−Decrease in Accounts Receivable OR + Increase in Accounts Receivable)]

Working Note:

Sales Revenue = Cash receipts from Customers −Decrease in Accounts Receivable=$80,000 −($10,000−$3,000)= $80,000−$7,000= $73,000

Conclusion

Thus, the amount of sales revenue is $73,000.

(1) (b)

To determine

The cost of goods sold for the month of December.

(1) (b)

Expert Solution

Explanation of Solution

Determine the cost of goods sold for the month of December.

Compute the amount of cost of goods sold:

Cash payment to suppliers]=Cost of Goods Sold (+ Decrease in Accounts Payable/ Increase in Inventory OR − Increase in Accounts Payable / Decrease in Inventory)

⇒Cost of goods sold =[ Cash Payments to Suppliers(− Decrease in Accounts Payable/ Increase in Inventory OR + Increase in Accounts Payable / Decrease in Inventory)]

Working Note:

⇒Cost of goods sold =[Cash Payments to Suppliers (+ Increase in Accounts Payable+Decrease in Inventory)]⇒Cost of goods sold = $60,000[+3,000($15,000−$12,000)+$1,000($7,000−$6,000)]⇒Cost of goods sold = $64,000

Conclusion

Thus, the amount of cost of goods sold is $64,000.

(1) (c)

To determine

The insurance expense for the month of December.

(1) (c)

Expert Solution

Explanation of Solution

Determine the insurance expense for the month of December.

Insurance Expense:

Cash payments for Insurance Expense] = Insurance Expenses{+ Increase in Prepaid Insurance OR− Decrease in Prepaid Insurance }⇒Insurance Expenses= [(Cash payments for Insurance Expense){− Increase in Prepaid Insurance OR+Decrease in Prepaid Insurance }]

Insurance Expenses= [(Cash payments for Insurance Expense)− Increase in Prepaid Insurance ]= $5,000−2,500($7,500−$5,000)= $2,500

Conclusion

Thus, the insurance expenses are $2,500.

(1) (d)

To determine

The salaries and wages expense for the month of December.

(1) (d)

Expert Solution

Explanation of Solution

Determine the salaries and wages expense for the month of December.

Calculate the cash payments for Salaries and wages expenses.

Cash payments for Salries and Wages]=[Salaries and Wages expense(+ Decrease in salaries and wages payable OR− Increase in salaries and wages payable)]⇒Salaries and Wages Expense ]=[ (Cash payments for Salries and Wages)(− Decrease in salaries and wages payable OR+Increase in salaries and wages payable)]

Salaries and Wages expense =[ (Cash payments for Salries and Wages)− Decrease in salaries and wages payable]= $10,000−$2,000($5,000−$2,000)= $8,000

Thus, the Salaries and wages expenses are $8,000.

2.

To determine

To Prepare: The summary journal entries to record the month’s sales, and cost of those sales.

2.

Expert Solution

Explanation of Solution

Sales Entry:

The following is the accounting equation for the entry:

Assets = Liabilities + Stockholder's Equity+73,000 (Accounts Receivable) = +$$73,000(Sales Revenue)

Record the following journal entry in the general journal:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accounts Receivable (A+)		73,000
	Sales Revenue (E+)			73,000
	(To record the revenues on account)

Table (1)

Accounts Receivable is an asset account, and increased by $73,000. Therefore, debit accounts receivable account with $73,000.
Sales revenue is revenue account, and increased by $73,000. Therefore, credit Sales revenue account with $73,000.

Cost of goods sold Entry:

The following is the accounting equation for the entry.

Assets = Liabilities + Stockholders' Equity−$64,000(Inventory) = − $64,000(Cost of Goods Sold)

The following is the accounting entry:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Cost of Goods Sold (E–)		64,000
	Inventory (A–)			64,000
	(To record the cost of goods sold)

Table (2)

Cost of goods sold is an expense account, and increased which has decreased the equity by $64,000. Therefore, debit cost of goods sold account with $64,000.
Inventory is an asset and decreased by $64,000. Therefore, credit the inventory account with $64,000.

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Answer 5

Chapter 2, Problem 2.11P

(1) (a)

To determine

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

To Determine: The sales revenue for the month of December.

(1) (a)

Expert Solution

Explanation of Solution

Determine the sales revenue for the month of December.

Sales Revenue:

Cash receipts from Customers]=Sales revenue (+Decrease in Accounts Receivable OR − Increase in Accounts Receivable)⇒Sales revenue = [(Cash receipts from Customers) (−Decrease in Accounts Receivable OR + Increase in Accounts Receivable)]

Working Note:

Sales Revenue = Cash receipts from Customers −Decrease in Accounts Receivable=$80,000 −($10,000−$3,000)= $80,000−$7,000= $73,000

Conclusion

Thus, the amount of sales revenue is $73,000.

(1) (b)

To determine

The cost of goods sold for the month of December.

(1) (b)

Expert Solution

Explanation of Solution

Determine the cost of goods sold for the month of December.

Compute the amount of cost of goods sold:

Cash payment to suppliers]=Cost of Goods Sold (+ Decrease in Accounts Payable/ Increase in Inventory OR − Increase in Accounts Payable / Decrease in Inventory)

⇒Cost of goods sold =[ Cash Payments to Suppliers(− Decrease in Accounts Payable/ Increase in Inventory OR + Increase in Accounts Payable / Decrease in Inventory)]

Working Note:

⇒Cost of goods sold =[Cash Payments to Suppliers (+ Increase in Accounts Payable+Decrease in Inventory)]⇒Cost of goods sold = $60,000[+3,000($15,000−$12,000)+$1,000($7,000−$6,000)]⇒Cost of goods sold = $64,000

Conclusion

Thus, the amount of cost of goods sold is $64,000.

(1) (c)

To determine

The insurance expense for the month of December.

(1) (c)

Expert Solution

Explanation of Solution

Determine the insurance expense for the month of December.

Insurance Expense:

Cash payments for Insurance Expense] = Insurance Expenses{+ Increase in Prepaid Insurance OR− Decrease in Prepaid Insurance }⇒Insurance Expenses= [(Cash payments for Insurance Expense){− Increase in Prepaid Insurance OR+Decrease in Prepaid Insurance }]

Insurance Expenses= [(Cash payments for Insurance Expense)− Increase in Prepaid Insurance ]= $5,000−2,500($7,500−$5,000)= $2,500

Conclusion

Thus, the insurance expenses are $2,500.

(1) (d)

To determine

The salaries and wages expense for the month of December.

(1) (d)

Expert Solution

Explanation of Solution

Determine the salaries and wages expense for the month of December.

Calculate the cash payments for Salaries and wages expenses.

Cash payments for Salries and Wages]=[Salaries and Wages expense(+ Decrease in salaries and wages payable OR− Increase in salaries and wages payable)]⇒Salaries and Wages Expense ]=[ (Cash payments for Salries and Wages)(− Decrease in salaries and wages payable OR+Increase in salaries and wages payable)]

Salaries and Wages expense =[ (Cash payments for Salries and Wages)− Decrease in salaries and wages payable]= $10,000−$2,000($5,000−$2,000)= $8,000

Thus, the Salaries and wages expenses are $8,000.

2.

To determine

To Prepare: The summary journal entries to record the month’s sales, and cost of those sales.

2.

Expert Solution

Explanation of Solution

Sales Entry:

The following is the accounting equation for the entry:

Assets = Liabilities + Stockholder's Equity+73,000 (Accounts Receivable) = +$$73,000(Sales Revenue)

Record the following journal entry in the general journal:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accounts Receivable (A+)		73,000
	Sales Revenue (E+)			73,000
	(To record the revenues on account)

Table (1)

Accounts Receivable is an asset account, and increased by $73,000. Therefore, debit accounts receivable account with $73,000.
Sales revenue is revenue account, and increased by $73,000. Therefore, credit Sales revenue account with $73,000.

Cost of goods sold Entry:

The following is the accounting equation for the entry.

Assets = Liabilities + Stockholders' Equity−$64,000(Inventory) = − $64,000(Cost of Goods Sold)

The following is the accounting entry:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Cost of Goods Sold (E–)		64,000
	Inventory (A–)			64,000
	(To record the cost of goods sold)

Table (2)

Cost of goods sold is an expense account, and increased which has decreased the equity by $64,000. Therefore, debit cost of goods sold account with $64,000.
Inventory is an asset and decreased by $64,000. Therefore, credit the inventory account with $64,000.

Answer 6

Chapter 2, Problem 2.11P

(1) (a)

To determine

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

To Determine: The sales revenue for the month of December.

(1) (a)

Expert Solution

Explanation of Solution

Determine the sales revenue for the month of December.

Sales Revenue:

Cash receipts from Customers]=Sales revenue (+Decrease in Accounts Receivable OR − Increase in Accounts Receivable)⇒Sales revenue = [(Cash receipts from Customers) (−Decrease in Accounts Receivable OR + Increase in Accounts Receivable)]

Working Note:

Sales Revenue = Cash receipts from Customers −Decrease in Accounts Receivable=$80,000 −($10,000−$3,000)= $80,000−$7,000= $73,000

Conclusion

Thus, the amount of sales revenue is $73,000.

Answer 7

Chapter 2, Problem 2.11P

(1) (a)

To determine

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Accounting rules for Journal entries:

To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.

To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

To Determine: The sales revenue for the month of December.

Answer 8

(1) (a)

Expert Solution

Explanation of Solution

Determine the sales revenue for the month of December.

Sales Revenue:

Cash receipts from Customers]=Sales revenue (+Decrease in Accounts Receivable OR − Increase in Accounts Receivable)⇒Sales revenue = [(Cash receipts from Customers) (−Decrease in Accounts Receivable OR + Increase in Accounts Receivable)]

Working Note:

Sales Revenue = Cash receipts from Customers −Decrease in Accounts Receivable=$80,000 −($10,000−$3,000)= $80,000−$7,000= $73,000

Answer 9

(1) (a)

Expert Solution

Answer 10

(1) (a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Conclusion

Thus, the amount of sales revenue is $73,000.

Answer 13

(1) (b)

To determine

The cost of goods sold for the month of December.

(1) (b)

Expert Solution

Explanation of Solution

Determine the cost of goods sold for the month of December.

Compute the amount of cost of goods sold:

Cash payment to suppliers]=Cost of Goods Sold (+ Decrease in Accounts Payable/ Increase in Inventory OR − Increase in Accounts Payable / Decrease in Inventory)

⇒Cost of goods sold =[ Cash Payments to Suppliers(− Decrease in Accounts Payable/ Increase in Inventory OR + Increase in Accounts Payable / Decrease in Inventory)]

Working Note:

⇒Cost of goods sold =[Cash Payments to Suppliers (+ Increase in Accounts Payable+Decrease in Inventory)]⇒Cost of goods sold = $60,000[+3,000($15,000−$12,000)+$1,000($7,000−$6,000)]⇒Cost of goods sold = $64,000

Conclusion

Thus, the amount of cost of goods sold is $64,000.

Answer 14

(1) (b)

To determine

The cost of goods sold for the month of December.

Answer 15

(1) (b)

Expert Solution

Explanation of Solution

Determine the cost of goods sold for the month of December.

Compute the amount of cost of goods sold:

Cash payment to suppliers]=Cost of Goods Sold (+ Decrease in Accounts Payable/ Increase in Inventory OR − Increase in Accounts Payable / Decrease in Inventory)

⇒Cost of goods sold =[ Cash Payments to Suppliers(− Decrease in Accounts Payable/ Increase in Inventory OR + Increase in Accounts Payable / Decrease in Inventory)]

Working Note:

⇒Cost of goods sold =[Cash Payments to Suppliers (+ Increase in Accounts Payable+Decrease in Inventory)]⇒Cost of goods sold = $60,000[+3,000($15,000−$12,000)+$1,000($7,000−$6,000)]⇒Cost of goods sold = $64,000

Answer 16

(1) (b)

Expert Solution

Answer 17

(1) (b)

Expert Solution

Answer 18

Expert Solution

Answer 19

Conclusion

Thus, the amount of cost of goods sold is $64,000.

Answer 20

(1) (c)

To determine

The insurance expense for the month of December.

(1) (c)

Expert Solution

Explanation of Solution

Determine the insurance expense for the month of December.

Insurance Expense:

Cash payments for Insurance Expense] = Insurance Expenses{+ Increase in Prepaid Insurance OR− Decrease in Prepaid Insurance }⇒Insurance Expenses= [(Cash payments for Insurance Expense){− Increase in Prepaid Insurance OR+Decrease in Prepaid Insurance }]

Insurance Expenses= [(Cash payments for Insurance Expense)− Increase in Prepaid Insurance ]= $5,000−2,500($7,500−$5,000)= $2,500

Conclusion

Thus, the insurance expenses are $2,500.

Answer 21

(1) (c)

To determine

The insurance expense for the month of December.

Answer 22

(1) (c)

Expert Solution

Explanation of Solution

Determine the insurance expense for the month of December.

Insurance Expense:

Cash payments for Insurance Expense] = Insurance Expenses{+ Increase in Prepaid Insurance OR− Decrease in Prepaid Insurance }⇒Insurance Expenses= [(Cash payments for Insurance Expense){− Increase in Prepaid Insurance OR+Decrease in Prepaid Insurance }]

Insurance Expenses= [(Cash payments for Insurance Expense)− Increase in Prepaid Insurance ]= $5,000−2,500($7,500−$5,000)= $2,500

Answer 23

(1) (c)

Expert Solution

Answer 24

(1) (c)

Expert Solution

Answer 25

Expert Solution

Answer 26

Conclusion

Thus, the insurance expenses are $2,500.

Answer 27

(1) (d)

To determine

The salaries and wages expense for the month of December.

(1) (d)

Expert Solution

Explanation of Solution

Determine the salaries and wages expense for the month of December.

Calculate the cash payments for Salaries and wages expenses.

Cash payments for Salries and Wages]=[Salaries and Wages expense(+ Decrease in salaries and wages payable OR− Increase in salaries and wages payable)]⇒Salaries and Wages Expense ]=[ (Cash payments for Salries and Wages)(− Decrease in salaries and wages payable OR+Increase in salaries and wages payable)]

Salaries and Wages expense =[ (Cash payments for Salries and Wages)− Decrease in salaries and wages payable]= $10,000−$2,000($5,000−$2,000)= $8,000

Thus, the Salaries and wages expenses are $8,000.

Answer 28

(1) (d)

To determine

The salaries and wages expense for the month of December.

Answer 29

(1) (d)

Expert Solution

Explanation of Solution

Determine the salaries and wages expense for the month of December.

Calculate the cash payments for Salaries and wages expenses.

Cash payments for Salries and Wages]=[Salaries and Wages expense(+ Decrease in salaries and wages payable OR− Increase in salaries and wages payable)]⇒Salaries and Wages Expense ]=[ (Cash payments for Salries and Wages)(− Decrease in salaries and wages payable OR+Increase in salaries and wages payable)]

Salaries and Wages expense =[ (Cash payments for Salries and Wages)− Decrease in salaries and wages payable]= $10,000−$2,000($5,000−$2,000)= $8,000

Thus, the Salaries and wages expenses are $8,000.

Answer 30

(1) (d)

Expert Solution

Answer 31

(1) (d)

Expert Solution

Answer 32

Expert Solution

Answer 33

2.

To determine

To Prepare: The summary journal entries to record the month’s sales, and cost of those sales.

2.

Expert Solution

Explanation of Solution

Sales Entry:

The following is the accounting equation for the entry:

Assets = Liabilities + Stockholder's Equity+73,000 (Accounts Receivable) = +$$73,000(Sales Revenue)

Record the following journal entry in the general journal:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accounts Receivable (A+)		73,000
	Sales Revenue (E+)			73,000
	(To record the revenues on account)

Table (1)

Accounts Receivable is an asset account, and increased by $73,000. Therefore, debit accounts receivable account with $73,000.
Sales revenue is revenue account, and increased by $73,000. Therefore, credit Sales revenue account with $73,000.

Cost of goods sold Entry:

The following is the accounting equation for the entry.

Assets = Liabilities + Stockholders' Equity−$64,000(Inventory) = − $64,000(Cost of Goods Sold)

The following is the accounting entry:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Cost of Goods Sold (E–)		64,000
	Inventory (A–)			64,000
	(To record the cost of goods sold)

Table (2)

Cost of goods sold is an expense account, and increased which has decreased the equity by $64,000. Therefore, debit cost of goods sold account with $64,000.
Inventory is an asset and decreased by $64,000. Therefore, credit the inventory account with $64,000.

Answer 34

2.

To determine

To Prepare: The summary journal entries to record the month’s sales, and cost of those sales.

Answer 35

2.

Expert Solution

Explanation of Solution

Sales Entry:

The following is the accounting equation for the entry:

Assets = Liabilities + Stockholder's Equity+73,000 (Accounts Receivable) = +$$73,000(Sales Revenue)

Record the following journal entry in the general journal:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Accounts Receivable (A+)		73,000
	Sales Revenue (E+)			73,000
	(To record the revenues on account)

Table (1)

Accounts Receivable is an asset account, and increased by $73,000. Therefore, debit accounts receivable account with $73,000.
Sales revenue is revenue account, and increased by $73,000. Therefore, credit Sales revenue account with $73,000.

Cost of goods sold Entry:

The following is the accounting equation for the entry.

Assets = Liabilities + Stockholders' Equity−$64,000(Inventory) = − $64,000(Cost of Goods Sold)

The following is the accounting entry:

Date	Account Title and Explanation	Post Ref.	Debit ($)	Credit ($)
	Cost of Goods Sold (E–)		64,000
	Inventory (A–)			64,000
	(To record the cost of goods sold)

Table (2)

Cost of goods sold is an expense account, and increased which has decreased the equity by $64,000. Therefore, debit cost of goods sold account with $64,000.
Inventory is an asset and decreased by $64,000. Therefore, credit the inventory account with $64,000.