Transaction Problem, please show me the the dollar amount and account during eac
ID: 2498701 • Letter: T
Question
Transaction Problem, please show me the the dollar amount and account during each Transaction,
thanks!
Three former college classmates have decided to pool a variety of work experiences by opening a store near campus to sell wireless equipment to students. The business has been incorporated as University Wireless.
Required: Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts that are affected, whether they increase or decrease, and the amount of the increase or decrease.
Account titles have to be in"Cash, Accounts recievable, Inventory, Prepaid rent, Accounts payable, Paid-in Capital, Retained earnings, fixtures and equipments, Notes payable, Accounts payable, interests payable, wages payable, "
Transaction 1
On March 1, three former classmates invested a total of $42,000 in cash in exchange for 1,000 shares of stock each.
Transaction 2
The corporation quickly acquired $35,000 in inventory, 40% of which was paid for in cash. The rest was acquired on open accounts that were payable after 30 days
Transaction 3
A store was rented for $450 per month. A lease was signed for one year on March 1. Rent for the first 3 months was paid in advance. [Note: Record the March 1 transaction first and the March 31 adjustment second.]
Transaction 4
Advertising was purchased for cash of $2,500 from a newspaper owned by one of the stockholders; additional advertising services of $5,500 were acquired on account. [Note: Combine both transactions into one entry].
Transaction 5
Sales were $66,000. Cost of merchandise sold was 50% of its sales price. 30% of the sales were for cash. [Note: Record the sales transaction first and the expense transaction second]
Transaction 6
Wages and salaries incurred in March amounted to $11,200, of which $4,300 was paid.
Transaction 7
Miscellaneous expenses paid for in cash were $1,800.
Transaction 8
On March 1, fixtures and equipment were purchased for $4,000 with a downpayment of $2,000 plus a $2,000 note payable in one year. Interest of 6% per year is due when the note is repaid. The estimated life of the fixtures and equipment is 9 years with no expected salvage value. Depreciation on the fixtures and equipment is computed on a straight-line basis. [Note: Record the March 1 equipment purchase first, then the March 31 depreciation adjusting entry, and finally the March 31 interest adjusting entry. Also, round all answers to the nearest cent.]
Transaction 9
Cash dividends totalling $3,600 were declared and paid to stockholders on March 31.
Account titles have to be in"Cash, Accounts recievable, Inventory, Prepaid rent, Accounts payable, Paid-in Capital, Retained earnings, fixtures and equipments, Notes payable, Accounts payable, interests payable, wages payable, "
Thanks!
Explanation / Answer
Assets = Liabilities + Owner's Equity Cash Accounts Receivables Inventory Prepaid Rent Fixture & equipments Accounts Payable Paid in Capital Retained Earnings Notes Payable Accounts Payable Interest Payable Wages Payable Revenue (Expeneses) Mar. 1 Transaction 1 $42,000 $42,000 Transaction 2 ($14,000) $35,000 $21,000 Transaction 3 ($1,350) ($1,350) Transaction 4 ($2,500) $5,500 ($7,500) Transaction 5.1 $19,800 $46,200 $66,000 Transaction 5.2 ($33,000) ($33,000) Transaction 6 ($4,300) 6900 ($11,200) Transaction 7 ($1,800) ($1,800) Transaction 8 ($2,000) $4,000 $2,000 Transaction 9 ($3,600) ($3,600) Mar. 31 Adjustment 1 $900 $900 Adjustment 2 ($37) ($37) Adjustment 3 $10 ($10) Adjustment 4 $12,003 ($12,003) Total 32250 46200 2000 900 3963 = 21000 42000 8403 2000 5500 10 6900 0 85313 85813 Dep. On Fix. & equipments per annum = $4000/9 = $444.44 Dep. On Fix. & equipments- Current Year = $444.44/12= $37.04 0r $37 Interest on Notes Payable = $2000 X 6% x 1/12 = $10 Adjustment 4. - transfer of profits to retained Earnings
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