Atkins Advertising began business on January 2, 2010. The transactions entered i
ID: 2442113 • Letter: A
Question
Atkins Advertising began business on January 2, 2010. The transactions entered into by Atkins during its first month of operations are as follows.a. Acquired its articles of incorporation from the state and issues 100,000 shares of capital stock in exchange for $200,000 in cash.
b. Purchased an office building for $150,000 in cash. The building is valued at $110,000 and the remainder of the value is assigned to the land.
c. Signed a three-year promissory note at the bank for $125,000.
d. purchased office equipment at a cost of $50,000, paying $10,000 down and agreeing to pay the remainder in ten days.
e. Paid wages and salaries of $13,000 for the first half of the month. Office employees are paid twice a month.
f. paid the balance due on the office equipment.
g. sold $24,000 of advertising during the fisrt month. customers have until the 15th of the follownig month to pay thier bills.
h. paid wages and salaries of $15,000 for the second half of the month.
i. recorded $3,500 in commissions earned by the salespeople during the monthe month. They will be paid on the fifth of the following month.
Explanation / Answer
Date
Account Titles and Explanation
Debit
Credit
a
Cash
200,000
Common Stock
200,000
(To record common stock)
b
Buildings
110,000
Lands
40,000
Cash
150,000
(To record the purchases )
c
Cash
125,000
Notes Payable
125,000
(To record cash on notes payable)
Office Equipment
50,000
Cash
10,000
Accounts Payable
40,000
(To record of office equipment purchases)
e
Wages & Salaries
13,000
Cash
13,000
(Paid wages & salaries)
f
Accounts Payable
40,000
Cash
40,000
(Paid cash on Accounts Payable)
g
Accounts Receivable
24,000
Service Revenue
24,000
(To record for services provided)
h
Wages $ Salaries
15,000
Cash
15,000
(Paid for wages $ salaries)
i
Accounts Receivable
3,500
Service Revenue
3,500
To record for services provided
Date
Account Titles and Explanation
Debit
Credit
a
Cash
200,000
Common Stock
200,000
(To record common stock)
b
Buildings
110,000
Lands
40,000
Cash
150,000
(To record the purchases )
c
Cash
125,000
Notes Payable
125,000
(To record cash on notes payable)
Office Equipment
50,000
Cash
10,000
Accounts Payable
40,000
(To record of office equipment purchases)
e
Wages & Salaries
13,000
Cash
13,000
(Paid wages & salaries)
f
Accounts Payable
40,000
Cash
40,000
(Paid cash on Accounts Payable)
g
Accounts Receivable
24,000
Service Revenue
24,000
(To record for services provided)
h
Wages $ Salaries
15,000
Cash
15,000
(Paid for wages $ salaries)
i
Accounts Receivable
3,500
Service Revenue
3,500
To record for services provided
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