Record transactions using journal entries: Suppose Mask, Inc. identified the fol

Question

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.

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.

Explanation / Answer

JOURNAL ENTRIES

Account receivable account

Missing value transaction 3 = $17740

Example for transaction 1 = Sales on account to customers

Example for transaction 2 = Received cash from customers for credit sales

DATE PARTICULARS DEBIT CREDIT 1/1/18 Inventory $11300 Accounts payable $11300 To record purchases on account 1/3/18 Accounts receivable $3180 Cost of goods sold $2750 Revenue $3180 Inventory $2750 To record sale of inventory on account 1/15/18 Accounts payable $5000 Cash $5000 To record cash paid to suppliers 1/20/18 Cash $1700 Account receivable $1700 To record cash received from customers 1/31/18 Wages $2250 Cash $2250 To record cash paid for wages

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