ntent Three former college classmates decided to open a store near campus to sel
ID: 2592928 • Letter: N
Question
ntent Three former college classmates decided to open a store near campus to sell wireless equipment to students. They created a public company, The Wire, and issued stock to interested investors. They plan on creating monthly financial statements Required: Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts for The Wire that are affected, whether they increase or decrease, and the amount of the increase or decrease. YOU MUST FOLLOW THE INSTRUCTIONS BELOW. IF YOU DONT, YOU MAY KNOW THE CORRECT ENTRY BUT THE COMPUTER WILL NOT RECOGNIZE IT AND WILL NOT GIVE YOU CREDIT To indicate the accounts that you think are affected, choose them from the drop-down menu. But you MUST select them in the order that they are listed in the menu. FOR EXAMPLE, if you think that Cash and Inventory are affected by a particular transaction, you must record the effect on the Cash account first and the effect on the Inventory account second, since that is 1. After each transaction description, there are several "Account" submission boxes and corresponding "Amount" submission boxes. the order in which they are listed in the drop-down menu. If you record the Inventory effect first and the Cash effect second, even if they are the correct accounts with the correct dollar amounts, your answer will be considered wrong. the dollar amounts, be sure to use a minus sign to indicate a decrease in the account. You don't need to use a plus sign to indicate an increase. Also, don't use a dollar sign or spaces Y. When you have indicated all 3. There are always more "Account" and "Amount" submission boxes availabl ts that are affected by the transaction, select "Leave Blank" from the drop-down menu for EACH of the remaining "Account submission boxes (you can leave the "Amount" boxes blank) 4. For transactions 3, 4, 5, and 8, you are given additional instructions. Read them carefully 5. You get 5 tries for each complete entry 6. The entries for transaction #8 is worth 4 points. The entries for each of the other transactions are worth 2 points. 98Explanation / Answer
Transaction 1. Cash 98,000 Common Stock 98,000 Transaction 2. Inventory 39,000 Accounts Payable 11,700 Cash (27,300) Transaction 3. March -1 Prepaid Rent 3,300 Cash (3,300) March -31 Rent Expenses 1,100 Prepaid Rent (1,100) Transaction 4. Advertisment Expenses 9,500 Cash (9,500) Transaction 5. Cash 25,600 Accounts Receivable 38,400 Sales 64,000 Cost of Goods Sold 41,600 Inventory (41,600) Transaction 6. Wages & Salaries Expenses 11,500 Cash (8,800) Wages & Salaries Payable 2,700 Transaction 7. Miscellaneous Expenses 1,100 Cash (1,100) Transaction 8. Entry 1 - Purchase of Equipment Fixtures & Equipment 5,500 Cash (1,500) Notes Payable 4,000 Entry 2 - Depreciation on Fixtures & Equipment Depreciation Expenses 38 Accumulated Depreciation 38 Dep. Exp = $5,500 / 12 Years X 1/12 Entry 3 - Interest on Notes Payable Interest Expenses 22 Interest Payable 22 Interest Expenses = $4,000 X 6.50% X 1/12 = $22
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