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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Journal Entries The following are selected accounts and account balances of Sawyer Company on May 31:

Chapter 3, Problem 3E, Journal Entries The following are selected accounts and account balances of Sawyer Company on May , example  1

Chapter 3, Problem 3E, Journal Entries The following are selected accounts and account balances of Sawyer Company on May , example  2

Sawyer entered into the following transactions during June:

Chapter 3, Problem 3E, Journal Entries The following are selected accounts and account balances of Sawyer Company on May , example  3

Required:

  1. 1. Record the preceding transactions in a general journal.
  2. 2. Post to general ledger T-accounts.

1.

To determine

Record the given transactions in a general journal.

Explanation

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

General journal: This is a journal used to record infrequent transactions like adjusting entries, closing entries, accounting errors, sale of assets, or bad debts expense.

Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

  • Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
  • Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets and expenses.

Record the given transactions in a general journal as follows:

DateAccount Title & Explanation

Debit

($)

Credit

($)

June 3Cash700
 Accumulated depreciation-Office equipment1,500
 Gain on sales of office equipment200
 Office equipment2,000
 (To record the office equipment sold on a gain)
June 7Accounts Receivable2,000
 Sales Revenue2,000
 (To record the goods sold on account)
June 7Cost of goods sold1,200
 Inventory1,200
 (To record the cost of goods sold incurred)
June 10Inventory1,000
...

2.

To determine

Post journal entries to the general ledger T-accounts.

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