Record Trail Balance: 1. Hazeltine purchases $500 of office supplies from Staple
ID: 2563934 • Letter: R
Question
Record Trail Balance:
1. Hazeltine purchases $500 of office supplies from Staples in January 2017 and receives an invoice when the materials are delivered. The invoice is approved by office services and forwarded to accounting for processing. Show the entry to be recorded in January 2017.
2. Verizon, which is a client, asks the company to do some market research on a new data plan it is considering offering to its customers related to the introduction of the iPhone X. Hazeltine prepares an estimate for $300,000 for the project which is estimated to take three months to complete.
The project begins on January 1, 2017 and is expected to be completed by March 31, 2017. Verizon approves the proposal and requests being billed on January 1st for the full $300,000. Show the entries to be recorded in January through March 2017 related to this project.
3. Verizon pays the $300,000 invoice on January 18, 2017. Show the entry to be recorded in January 2017 for this deposit.
4. The head of Hazeltine’s research department orders a one-year subscription to LexisNexis for $10,000 per month which must be paid a year in advance. The subscription begins on January 1, 2017 and extends to December 31, 2017. Show the entries to be recorded in January through March 2017.
5. Hazeltine pays the LexisNexis bill on January 12, 2017 for $120,000. Show the entry to be recorded in January 2017 reflecting this payment.
6. When Hazeltine closes the books for January 2107 they identify $15,000 of legal bills that have been incurred in January but not yet billed by the law firm. When Hazeltine closes the books for February 2017 the law firm has submitted bills for only $12,000. You receive assurance that the legal firm will be submitting the remaining $3,000 of charges relating to January work in February. Show the entries to be recorded in January and February.
7. In the January 2017 closing of the books, Hazeltine records depreciation of $18,000. Show the entry to be recorded in January 2017.
8. In January 2017 Hazeltine adds $3,000.00 to its reserve for bad debts. Show the entry to be recorded in January 2017.
9. On January 7, 2017 a customer sends a $16,000 check to Hazeltine to pay an outstanding invoice but asks the company to hold the check until they can get the funds into the bank to cover it. On January 10, 2017 Hazeltine deposits the check. On January 12, 2017 the bank calls to tell Hazeltine that the check was returned by the bank for insufficient funds. Show the entries to be recorded in January 2017 for each of these events.
10. In January 2017 Hazeltine transfers $800,000 from its operating account to its payroll account to cover the January payroll. Show the entry(s) to be recorded in January 2017.
Chart of account may be used:
Cash - Operating
Cash - Payroll
Cash - Money Market
Accounts Receivable
Accrued Revenue
Prepaid Expenses
Fixed Assets
Accumulated Depreciation
Accounts Payable
Accrued Expenses
Deferred Revenue
Reserve for Bad Debts
Capital Stock
Retained Earnings
Revenue - Market Research
Revenue - Public Relations
Staff Salaries
Payroll Taxes & Benefits
Serverance
Rent
Telecommunications
Supplies
Marketing
Professional Fees(Includes both legal and accounting fees)
Travel & Entertainment
Bad Debt Expense
Misc Expense
Depreciation Expense
Dues and Subscriptions.
Cash - Operating
Cash - Payroll
Cash - Money Market
Accounts Receivable
Accrued Revenue
Prepaid Expenses
Fixed Assets
Accumulated Depreciation
Accounts Payable
Accrued Expenses
Deferred Revenue
Reserve for Bad Debts
Capital Stock
Retained Earnings
Revenue - Market Research
Revenue - Public Relations
Staff Salaries
Payroll Taxes & Benefits
Serverance
Rent
Telecommunications
Supplies
Marketing
Professional Fees(Includes both legal and accounting fees)
Travel & Entertainment
Bad Debt Expense
Misc Expense
Depreciation Expense
Dues and Subscriptions.
Explanation / Answer
Journal entries :
Date particulars Dr Cr
1) Jan 2017 Purchases A/c Dr $ 500
To staples A/c $ 500
(being office supplies purchased from staples)
2) Jan 1st 2017 verizon A/c Dr $ 3,00,000
To Sales A/c $ 3,00,000
( being market research service saled)
3) Jan 18th 2017 Bank A/c Dr $ 3,00,000
To Verizon A/c $ 3,00,000
( being amount received)
4) Jan 31st 2017 Subscriptions A/c Dr $ 10,000
To Prepaid subscriptions $ 10,000
( being subscriptions given in advance)
5) Jan 12th 2017 Prepaid subscriptions A/c $ 1,20,000
To Bank A/c $ 1,20,000
(being subscription amount paid)
6) Jan 31 st 2017 Legal Expenses A/c Dr $ 15,000
To Legal Expenses Payable A/c $ 15,000
(being expenses incurred but not yet billed)
28/02/2017 Legal expenses A/c Dr $15,000
To outstsnding Expenses A/c $15,000
(being expenses incurred but not paid
7) 31st jan 2017 Depreciation A/c Dr $ 18,000
To Asset A/c $ 18,000
(being depreciation charged )
8) jan 2017 Profit and loss A/c Dr $ 3,00,000
To Reserve for bad debts A/c $ 3,00,000
(being Reserve for bad debts Created)
9) jan 10th 2017 bank A/c Dr $ 16,000
To Debtor A/c $ 16,000
(being cheque deposited in bank)
Jan 12th 2017 Debtor A/c Dr $ 16,000
To Bank A/c $ 16,000
(being cheque bounced)
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