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Problem 2-59A Journalizing Transactions
Monroe Company rents and sells electronic equipment. During September, Monroe engaged in the transactions described below.
Sept. 5 Purchased a Chevrolet truck for $38,900 cash.
8 Purchased inventory for $4200 on account.
10 Purchased $1,250 of office supplies on credit.
11 Rented sound equipment to a traveling stage play for $13,600. The producer of the play paid for the service at the time it was provided.
Sept 12 Rented sound equipment and lights to a local student organization for a school dance for $2,400. The student organization will pay for services within 30 days.
18 Paid employee wages of $4,750. What have been earned during September.
22 Collected the receivable from the September 12 transaction.
23 Borrowed $20000 cash from a bank on a 3-year note payable.
28 Issued common stock to new stockholders for $35,000.
30 Paid a $3,250 cash dividend to stock-holders
Required:
Prepare a journal entry for each transaction.
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Chapter 2 Solutions
Cornerstones of Financial Accounting
- Exercise 3-40 Revenue and Expense Recognition Electronic Repair Company repaired a high-definition television for Sarah Merrifield in December 2019. Sarah paid $80 at the time of the repair and agreed to pay Electronic Repair $80 each month for 5 months beginning on January 15, 2020. Electronic Repair used $120 of supplies, which were purchased in November 2020, to repair the television. Assume that Electronic Repair uses accrual-basis accounting. Required: In what month or months should revenue from this service be recorded by Electronic Repaid? In what month or months should the expense related to the repair of the television be recorded by Electronic Repair? CONCEPTUAL CONNECTION Describe the accounting principles used to answer the above questions.arrow_forwardBrief Exercise 2-28 Assumptions and Principles Five common accounting practices are listed below: A customer pays $20 to mail a package on December 30. The delivery company recognizes revenue when the package is delivered in January. Jim Trotter owns C**S Heating Company. In preparing the financial statements, Trotter makes sure that the purchase of a new truck for personal use is not included in C&S’s financial statements. Moseley Inc. recorded land at its purchase price of $50,000. In future periods, the land is reflected in the financial statements at $50,000. Mack Company purchases inventory in March. However, it does not expense that inventory until it is sold in April. Mueller Inc. prepares quarterly and annual financial statements. Required: Identify the amounting principle or assumption that best describes each practicearrow_forwardProblem 2-603 Journalizing and Posting Transactions Findlay Testing Inc. provides water testing and maintenance services for owners of hot tubs and swimming pool. During September the following transactions occurred: Sept. 1 Issued common stock for $20,000. 2 Purchased chemical supplies for $1,880 cash. 5 Paid office rent for October, November, and December; the rent is $800 per month. 8 Purchased $12.90 of advertising for September on account. 13 Billed the city of Bellefontaine $2,100 for testing the water in the citys outdoor pools during September, 18 Received $3250 from Alexander Blanchard upon completion of overhaul of his swimming pool water circulation system. Since the job was completed and collected for on the same day, no bill was sent, to Blanchard. Sept. 25 Received $835 from the city of Bellefontaine for water testing that was previously billed. 30 Recorded and paid September salaries of $3,970. Required: 1. Prepare a journal entry for each transaction. 2. Post the journal entries to the appropriate T-accounts.arrow_forward
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- Brief Exercise 2-32 Journalize Transactions Galle Inc. entered into the following transactions during January. January, 1: Borrowed $50,000 from First Street Bank by signing a note payable. January, 4: Purchased $25,000 of equipment for cash. January, 6: Paid $500 to landlord for rent for January. January, 15: Performed services for customers on account. $10,000. January, 25: Collected $3,000 from customers for services performed in Transaction d. January, 30: Paid salaries of $2,500 for the current month. Required: Prepare journal entries for the transactions.arrow_forwardProblem 2-60A Journalizing and Posting Transactions Cincinnati Painting Service Inc. specializes in painting houses. During June, its first month of operations, Cincinnati Painting engaged in the following transactions: June 1 Issued common stock for $25,000. 3 Purchased painting supplies from River City Supply for $1,675 on credit, 8 Purchased a used truck from Hamilton Used Car Sales for 513300. paying 31,500 down and agreeing to pay the balance in 6 months. 14 Paid $4230 to hourly employers for work performed in June. 22 Billed various customers a total of $10,340 for June painting jobs. 26 Received $6.100 cash from James Elton for a house painting job completed and previously billed. 29 Collected $52.0 from Albert Montgomery on completion of a 1-day painting job. This amount is not included in the June 22 bills. Required: 1. Prepare a journal entry for each transaction. 2. Post the journal entries to the appropriate T-accounts.arrow_forwardExercise 2-49 Journalizing Transactions Kauai Adventures rams and sells surfboards, snorkeling, and scuba equipment. During March, Kauai engaged in the following transactions: March 2 Received $51,500 cash from customers for rental, 3 Purchased on credit ten new surfboards (which Kauai classifies as inventory) for $180 each. 6 Paid wages to employees in the amount of $9,200. 9 Paid office rem for the month in L1]: amount of$l,000. 12 Purchased a new Ford truck for 340.800: paid 51,000 down in cash and secured a loan from Princeville Bank for the $39,800 balance. March 13 Collected a $1,050 account receivable. 16 Paid an account payable in the amount of $950. 23 Borrowed $10,000 on a 6-month, 8% note payable. 27 Paid the monthly telephone hill of $185. 30 Paid a monthly advertising bill of $1,550. Required: Prepare a journal entry for each of these transactions.arrow_forward
- Problem 2-62B Comprehensive Problem Mulberry Services sells electronic data processing services to firms too Email to own their own computing equipment. Mulberry had the following amounts and amount balances as of January 1, 2019: During 2019, the following transactions occurred (the events described below are aggregations of many individual events): During 2019, Mulberry sold $690,000 of computing services, all on credit. Mulberry collected $570,000 from the credit sales in Transaction a and an additional $129,000 from the accounts receivable outstanding at the beginning of the year. Mulberry paid the interest payable of $8,000. A Wages of $379,000 were paid in cash. Repairs and maintenance of $9,000 were incurred and paid. The prepaid rent at the beginning of the year was used in 2019. In addition, $28,000 of computer rental costs were incurred and paid. There is no prepaid rent or rent payable at year-end. Mulberry purchased computer paper for $13,000 cash in late December. None of the paper was used by year-end. Advertising expense of $26,000 was incurred and paid. Income tax of $10,300 was incurred and paid in 2019. Interest of $5,000 was paid on the long-term loan. (Continued) Required: Establish a T-account for the accounts listed above and enter the beginning balances. Use a chart of accounts to order the T-accounts. Analyze each transaction; Journalize as appropriate. (Note: Ignore the date because these events are aggregations of individual events.) Post your journal entries to the T-accounts. Add additional T-accounts when needed. Use the ending balances in the T-accounts to prepare a trial balance.arrow_forwardExercise 2-52 Accounting Cycle Rosenthal Decorating Inc. is a commercial painting and decorating contractor that began operations in January 2019. The following transactions occurred during the year: On January 15, Rosenthal sold shares Of its common stock to William Hensley for $10,000 On January 24, Rosenthal purchased S720 of painting supplies from Westwood Builders' Supply Company on account. On February 20, Rosenthal paid S720 cash to Westwood Builders' Supply Company for the painting supplies purchased on January 24. On April 25, Rosenthal billed Bultman Condominiums $12,500 for painting and decorating services performed in April. On May 12, Rosenthal received $12,500 from Bultman Condominiums for the painting and decorating work billed in April. On June 5, Rosenthal sent Arlington Builders a $9,500 bill for a painting job completed on that day. On June 24, Rosenthal paid wages for work performed during the preceding week in the amount of $6,700. Required: Prepare a journal entry for each of the transactions. Post the transactions to T-accounts. Prepare a trial balance at June 30, 2019.arrow_forwardExercise 2-50 Journalizing Transactions Remington Communications has been providing cellular phone service for several years. During November and December. the following transactions occurred: Nov. 2 Remington received S2,400 for November phone service from Enrico Company. 10 6 Remington purchased S4,750 of supplies from Technology Associates on 10 Remington paid S5,250 to its hourly employees for their weekly wages. 15 Remington paid S4, 750 to Technology Associates in full settlement Of its payable. 28 Remington paid S2, 150 for utilities used during November. 30 Remington received a bill from Monticello Construction for Sl,230 for repairs made to Remingtons loading dock on November I S. Remington plans to pay the bill in early December. Dec. 10 Remington paid S I ,230 to Monticello Construction to settle the repair bill received onarrow_forward
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