1) Debits/Credits: For each of the following accounts, indicate whether a debit

Question

1) Debits/Credits: For each of the following accounts, indicate whether a debit will increase or decrease the balance of the account and whether a credit will increase or decrease the balance of the account. I have completed a. for you as an example.

Account:

Debit:

Credit:

Wages Expense

Increases wages expense

Decreases wages expense

Sales Revenue

Accounts payable

Cash

Common Stock

Dividends

Cost of goods sold (COGS)

Inventory

2) Record transactions using journal entries: Suppose Mask, Inc. identified the following transactions during January 2018:

1/1/18: Purchased inventory worth $11,300 on account.

1/3/18: Sold inventory, which originally cost $2,750, for $3,180 on account to customers.

1/15/18: Paid $5,000 cash to suppliers from transaction a.

1/20/18: Received $1,700 cash payment from customers in transaction b.

1/31/18: Paid $2,250 cash for January wages.

Record all of the above transactions using journal entries (HINT: there will be two separate entries to record for transaction b.). I have completed transaction a. for you as an example. Assume Mask, Inc, uses the following accounts: Cash, A/R, Inventory, A/P, Sales Revenue, Cost of Goods Sold (COGS), Wages Expense.

1/1/18                                                       DEBIT             CREDIT

            Inventory                                             $11,300

                        Accounts Payable (A/P)                                  $11,300

            To record purchase of inventory on account.

3)  T-accounts: Below is the T-account for Accounts Receivable (A/R) for She’s A Star, Ltd.:

                                                   Accounts Receivable (A/R)

                    Beginning balance $135,000

                              (transaction 1) $21,800           $12,500 (transaction 2)

                                                                        $XX,XXX (transaction 3)

                      Ending balance      $126,560

What is the missing value $XX,XXX for transaction 3?

Give one example of a transaction that would have resulted in the posting of transaction 1 to the A/R account.

Give one example of a transaction that would have resulted in the posting of transaction 2 to the A/R account.

Account:

Debit:

Credit:

Wages Expense

Increases wages expense

Decreases wages expense

Sales Revenue

Accounts payable

Cash

Common Stock

Dividends

Cost of goods sold (COGS)

Inventory

Explanation / Answer

1) Debits/Credits

Per Chegg guidelines, please post independent questions separately. Thank you.

Account: Debit: Credit: Wages expense Increases wages expense Decreases wages expense Sales revenue Decreases sales revenue Increases sales revenue Accounts payable Decreases accounts payable Increases accounts payable Cash Increases cash Decreases cash Common stock Decreases common stock Increases common stock Dividends Increases dividends Decreases dividends Cost of goods sold (COGS) Increases COGS Decreases COGS Inventory Increases inventory Decreases inventory

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