Basic Accounting Journal Entries Exercise

However, sold goods to Rehman & sons Rs. 1,500 and sale by cash Rs. 5,000.

Certainly, people can often perceive great risk acting this way. An organization can, after all, accomplish more when people work together instead of against each other. The primary key to our success is our 39,000 employees who wear those orange aprons you see in our stores. Feb. 25 Received payment of $ 4,400 for remodeling a basement into a recreation room. The homeowner purchased all of the building materials. Jan. 15 Stockholders invested $ 40,000 in the business.

Journal Entry for Asset Purchase

In this case, the proprietor may be charged interest at a fixed rate. Generally, interest on capital is an appropriation of profit, which means in case of loss, no interest is to be provided. Hence, debit the Profit and loss appropriation A/C and credit Interest on capital A/C at the time of transferring Interest on Capital.

The cost of the merchandise is $58,000, and Art Attack pays the freight cost of $2,200 to ship the goods to the retailer. At the end of the accounting period, The Print Haus notifies Art Attack Ltd. that 80% of the merchandise has been sold for $79,000. The Print Haus retains a 10% commission as well as $3,400, which represent advertising costs it paid, and remits the balance owing to Art Attack Ltd. The journal book must record every business transaction, which means entries need to be made.

SHORT ANSWER QUESTIONS, EXERCISES AND PROBLEMS

15 Collected cash from customers on account, $ 75,000. 25 Laundry services were performed for customers who paid immediately, $ 22,000. 20 Collected cash of $ 4,500 from customers on account (see March 12 entry).

• Horizontal analysis involves showing the dollar amount and percentage increase or decrease of the latest year over the preceding year amounts.
• Read the information and write a memo to your instructor about your search and what you learned about certain jobs in accounting.
• The homeowner purchased all of the building materials.

Step 1 – At the time of paying an expense before the due date in cash. The term “prepaid expenses” refers to expenses that are paid before the actual due date. Example Step 1 – Electricity Expense of 1,000 is unpaid on the balance sheet date. The term “outstanding expenses” refers to expenses that are unpaid after their due date. Example – Max withdrew goods worth 2,000 for personal use. Drawings are personal withdrawals made by the owner and act as a reduction in the owner’s capital.

Chapter 4 Exercise: Recording transactions with journal entries Transactional Journal Entries

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6.7Record the journal entry or entries for each of the following sales transactions. Glow Industries sells 240 strobe lights at $40 per light to a customer on May 9. The terms of the sale are 5/15, n/40, invoice dated May 9. On May 13, the customer discovers 50 of the lights are the wrong color and are granted an allowance of $10 per light for the error. On May 21, the customer pays for the lights, less the allowance.

Assume that Gurt’s Gazebos has agreed to a contract with a developer to put multiple gazebo’s into all the new subdivision the developer is building. The contract spans over a 3 year period and the relevant information on the contract is listed below. Determine the amount of revenue to be recognized each year under the two different scenarios. https://turbo-tax.org/tax-withholding-2020/ Assume that the fair value of the telephone is indeterminable and the fair value of the airtime and data is as indicated. Assume that the fair value of the telephone is $500 and the fair value of the airtime and data is $600 per year. Apr. 10 Received $ 7,000 for converting a room over a garage into an office for a college professor.

Accounting Education

XYZ inc is to receive a 15% commission upon sale and a 5% allowance to offset its advertising expenses. At the end of the 3rd quarter (Sept 30, Y4), XYZ notifies Chang that 75% of the merchandise has been sold for $160,000. Complete the journal entries required by each company for the above transactions. Jan 12 Purchased insurance for January on the delivery trucks.

• Step 1 – At the time of paying an expense before the due date in cash.
• The balance of $ 12,000 in the Advertising Expense account was entered as $ 1,200 in the trial balance.
• The desks sell for $3,000 and cost the company $2,000 to manufacture.
• Prepare the journal entries required to record these transactions in the general journal of the company.

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6.2The following is selected information from Mars Corp. Compute net purchases, and cost of goods sold for the month of March. An additional $8,250,000 in costs are incurred during the year. The customer is billed $13,000,000 during year 2 and pays $12,000,000 before the end of the year.

Journal Entry for Income Received in Advance

17 Cash received for delivery services to date amounted to $ 1,800. The cash was received, and a note promising to return the $ 80,000 on 2010 May 30, was signed. 15 Purchased trucks for $ 150,000, paying $ 120,000 cash and giving a 60-day note to the dealer for $ 30,000.