Chapter 10 General Ledger Accounting Cycle On January 1, 2018, the general ledge

Question

Chapter 10 General Ledger Accounting Cycle On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances: Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Pavable Common Stock, $1 par value Additional Paid-in Capital Retained Earnings Debit Credit $ 42,700 44,500 7,500 64,000 $ 9,000 14,600 10,000 80,000 45,100 Totals $158,700 $158,700 During January 2018, the following transactions occur: January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000. January 9 Provide services to customers on account, $14,300 January 10 Purchase additional supplies on account, $4,900. January 12 Repurchase 1,000 shares of treasury stock for $18 per share. January 15 Pay cash on accounts payable, $16,500 January 21 Provide services to customers for cash, $49,100. January 22 Receive cash on accounts receivable, $16,600. January 29 Declare a cash dividend of $0.30 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 10,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.) January 30 Reissue 600 shares of treasury stock for $20 per share. January 31 Pay cash for salaries during January, $42,000.

Explanation / Answer

Journal Entry Debit Credit Jan-02 Cash A/C. Dr.             40,000 To Common Stock 2000 To Premium on issue on Share 38000 Jan-09 Accounts recievable A/C dr.             14,300 To Service Income         14,300 Jan-10 Office Suuplies A/C dr.               4,900 To Accounts payable A/c           4,900 Jan-12 Treasury Stock A/C dr.             18,000 To Cash         18,000 Jan-15 Account Payable A/C dr. 16500 To Cash 16500 Jan-21 Cash A/C dr.             49,100 To Service Income         49,100 Jan-22 Cash A/C dr.             16,600 To Account recievable A/C         16,600 Jan-29 Dividend A/C dr. 3600 To Dividend payable A/C 3600 Jan-30 Cash A/C dr. 12000 To Tresury Shares 12000 Jan-31 Salaries A/C dr.             42,000 To Cash A/c         42,000

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