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Problem 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
2.
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Chapter 2 Solutions
Cornerstones of Financial Accounting
- Monitoring of Receivables The Russ Fogler Company, a small manufacturer of cordless telephones, began operations on January 1. Its credit sales for the first 6 months of operations were as follows: Throughout this entire period, the firm’s credit customers maintained a constant payments pattern: 209b paid in the month of sale, 309b paid in the first month following the sale, and 509b paid in the second month following the sale. What was Fogler’s receivables balance at the end of March and at the end of June? Assume 90 days per calendar quarter. What were the average daily sales (ADS) and days sales outstanding (DSO) for the first quarter and for the second quarter? What were the cumulative ADS and DSO for the first half-year? Construct an aging schedule as of June 30. Use account ages of 0-30, 31-60, and 61-90 days. Construct the uncollected balances schedule for the second quarter as of June 30.arrow_forwardSales and notes receivable transactions The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems. Jan. 3. Loaned 18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10. Sold merchandise on account to Bradford Co., 24,000. The cost of the merchandise sold was 14,400. 13. Sold merchandise on account to Dry Creek Co., 60,000. The cost of merchandise sold was 54,000. Mar. 12. Accepted a 60-day, 7% note for 24,000 from Bradford Co. on account. 14. Accepted a 60-day, 9% note for 60,000 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5. Sold merchandise on account to Halloran Co., 13,500. The cost of the merchandise sold was 8,100. 15. Received from Halloran Co. the amount of the invoice of October 5. Instructions Journalize the entries to record the transactions.arrow_forwardSALES JOURNAL Futi Ishanyan owns a retail business and made the following sales during the month of August 20--. There is a 6% sales tax on all sales. Aug. 1Sale No. 213 to Jeter Manufacturing Co., 1,300, plus sales tax. 3Sale No. 214 to Hassan Co., 2,600, plus sales tax. 7Sale No. 215 to Habrock, Inc., 1,700, plus sales tax. (Open a new account for this customer. Address is 125 Fishers Dr., Noblesville, IN 478708867.) 11Sale No. 216 to Seth Mowbray, 1,400, plus sales tax. 18Sale No. 217 to Hassan Co., 3,960, plus sales tax. 22Sale No. 218 to Jeter Manufacturing Co., 2,800, plus sales tax. 30Sale No. 219 to Seth Mowbray, 1,900, plus sales tax. Required 1. Record the transactions in the sales journal starting with page 8. Total and verify the column totals and rule the columns. 2. Post from the sales journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.arrow_forward
- SALES TRANSACTIONS J. K. Bijan owns a retail business and made the following sales on account during the month of August 20--. There is a 6% sales tax on all sales. REQUIRED 1. Record the transactions starting on page 15 of a general journal. 2. Post from the journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.arrow_forwardSALES TRANSACTIONS T. M. Maxwell owns a retail business and made the following sales on account during the month of July 20--. There is a 5% sales tax on all sales. REQUIRED 1. Record the transactions starting on page 15 of a general journal. 2. Post from the journal to the general ledger and accounts receivable ledger accounts. Use account numbers as shown in the chapter.arrow_forwardAccounts Payable On May 18, Stanton Electronics purchased, on credit, 1,000 TV sets for $400 each. Stanton plans to resell these TVs in its store. Stanton paid the supplier on June 30. Required: Prepare the necessary journal entry (or entries) on May 18 and June 30.arrow_forward
- Sales and notes receivable transactions The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer sells and installs home and business security systems. Jan. 3. Loaned 18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10. Sold merchandise on account to Bradford Co., 24,000. The cost of goods sold was 14,400. I3. Sold merchandise on account to Dry Creek Co., 60,000. The cost of goods sold was 54,000. Mar. 12. Accepted a 60-day, 7% note for 24,000 from Bradford Co. on account. 14. Accepted a 60-day, 9% note for 60,000 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5. Sold merchandise on account, terms 2/10, n/30, to Halloran Co., 13,500. Record the sale net of the 2% discount. The cost of goods sold was 8,100. 15. Received from Halloran Co. the amount of the invoice of October 5, less 2% discount. Instructions Journalize the entries to record the transactions.arrow_forwardParts wriiten Subparts to be solve are the ones to be solved Question Requirement 1For each of the following transactions make the required entries in the General Journal:(See the General Ledger tab in the workbook Chapter 03 b - Problem 3-1 Forms for the accounts in OPJ’s accounting system.)Feb 01 Take $4,000 cash out of Big Bank to pay for February’s warehouse rent.Feb 04 Sale of inventory to a customer – selling price $62,000 – cost of inventory sold $16,000 – customer paid cash which was deposited in Big Bank.Feb 07 Take $10,000 cash out of Little Bank to pay employees for wages they have earned.Feb 15 Sale of inventory to a customer – selling price $88,000 – cost of inventory sold $22,000 – customer will pay in the future.Feb 18 Sale of inventory to a customer – selling price $110,000 – cost of inventory sold $28,000 – customer pays $40,000 cash which is deposited in Little Bank – customer will pay for the remaining amount of the sale in 30 days.Feb 22 Purchase additional…arrow_forwardJournal Entires for transaction June 20 Repaired a damaged steering mechanism for customer Darren O'Malley and also installed a new Hickster Pipe. Mr. O'Malley was billed for 3.25 hours of labor, accessories totaling $430.00, plus sales tax. He paid with a bank credit card. Merchandise listed on the sales invoice: Stock Number....................Item.................Quantity.............Net Cost Per Unit BM102 .......................HICKSTER PIPE............1...........................$215.00 Sales Tax 8% Labor cost $65/hourarrow_forward
- Year 1 Apr. 20 Purchased $49,750 of merchandise on credit from Nguyen, terms n/30. May 19 Replaced the April 20 account payable to Nguyen with a 90-day, 8%, $38,000 note payable along with paying $11,750 in cash. July 8 Borrowed $102,000 cash from NMR Bank by signing a 120-day, 10%, $102,000 note payable. Aug. 17 Paid the amount due on the note to Nguyen at the maturity date. Nov. 5 Paid the amount due on the note to NMR Bank at the maturity date. Nov. 28 Borrowed $60,000 cash from Chicago Bank by signing a 60-day, 6%, $60,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Chicago Bank. Year 2 Jan. 27 Paid the amount due on the note to Chicago Bank at the maturity date. 1. Prepare a Calculation of Interest Gonzalez Co. Calculation of interest expense August 17 - Nguyen note: Principal Interest rate Number of days' interest to be recorded…arrow_forwardTB 03-70 Company A receives $10,000 in advance this m... Company A receives $10,000 in advance this month for work to be performed next month. This month, the company should: Multiple Choice Debit Accounts Payable $10,000 and credit Cash $10,00. Debit Inventory $10,000 and credit Sales Revenue $10,000. Debit Cash $10,000 and credit Deferred Revenue $10,000. Debit Inventory $10,000 and credit Accounts Payable $10,000.arrow_forwardCurrent Attempt in Progress Culver's Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurred. June 1 3 6 9 15 17 20 24 26 28 30 Purchased books on account for $1,060 from Catlin Publishers, terms 2/10, n/30. Sold books on account to Garfunkle Bookstore for $1,120. The cost of the books sold was $760. Received $60 credit for books returned to Catlin Publishers. Paid Catlin Publishers in full. Received payment in full from Garfunkle Bookstore. Sold books on account to Bell Tower for $1,300. The cost of the merchandise sold was $770. Purchased books on account for $700 from Priceless Book Publishers, terms 1/15, n/30. Received payment in full from Bell Tower. Paid Priceless Book Publishers in full. Sold books on account to General Bookstore for $1,270. The cost of the merchandise sold was $840. Granted General Bookstore $140 credit for books returned…arrow_forward
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