Journal Entry Practice

E3-3 Recording the Transactions

A customer orders and receives 10 personal computers from Dell; the customer promises to pay $18,400 within three months. Answer from Dell’s standpoint. What about cost info? Account Name Debit Credit Accounts Receivable $18,400 Sales Revenue

Fucillo Hyundai, Inc, sells a truck with a list, or sticker, price of $20,050 for $18,050 cash. Account Name Debit Credit Cash $18,050 Sales Revenue

Bon-Ton Department Store orders 1,000 men’s shirts from Arrow Shirt Company for $15 each for future delivery. The terms require full payment within 30 days of delivery. Answer from Arrow’s standpoint. Account Name Debit Credit No Entry

Arrow Shirt Company completes production of the shirts described in part c and delivers the order (answer from Arrow Shirt Company perspective) Account Name Debit Credit Accounts Receivable $15,000 Sales Revenue

Arrow receives payment from Bon-Ton for the order described in part c Arrow receives payment from Bon-Ton for the order described in part c. Answer from the perspective of Arrow Shirt Company. Account Name Debit Credit Cash $15,000 Accounts Receivable

A customer purchases a ticket from American Airlines for $410 cash to travel the following January. Answer from American Airlines perspective. Account Name Debit Credit Cash $410 Unearned Airfare Revenue

General Motors issues $20 million in new common stock Account Name Debit Credit Cash $20,000,000 Contributed Capital

Pen State University receives $18,300,000 cash for 80,000 five-game season football tickets. Account Name Debit Credit Cash $18,300,000 Unearned Football Ticket Revenue

Penn State plays the first football game described in part h. Account Name Debit Credit Unearned Football Ticket Revenue $3,660,000 Football Ticket Revenue $3.660,000

Precision Construction Company signs a contract with a customer for the construction of a new $500,000 warehouse. At the signing, Precision receives a $50,000 deposit as a deposit on the future construction project. Answer from the perspective of Precision. Account Name Debit Credit Cash $50,000 Unearned Construction Revenue

In 1 year (assuming no other transactions are recorded? On September 1, 2012, a bank lends $1,200 to a company; the note principal and $144 annual interest are due in one year (1,200 X 12%). Answer from the Bank’s perspective. NOW: In 1 year (assuming no other transactions are recorded? Account Name Debit Credit Note Receivable $1,200 Cash Account Name Debit Credit Cash $1,344 Notes Receivable $1,200 Interest Revenue $144

A popular ski magazine company receives a total of $1,980 today from subscribers. The subscriptions begin in the next fiscal year. Answer from the perspective of the magazine company: What do you do with each edition of the magazine that is sent out (assume 12 issues)? Account Name Debit Credit Cash $1,980 Unearned Subscription Revenue Account Name Debit Credit Unearned Subscription Revenue $165 Subscription Revenue

Sears, a retail store, sells a $100 lamp to a customer who charges the sale on his store credit card. Answer from Sear’s perspective. Account Name Debit Credit Accounts Receivable $100 Sales Revenue

E 3-4 Recording the transactions

ASSUME: No Salaries Payable has been previously recorded. Dell pays its computer service technicians $79,500 in salaries for two weeks ended January 7. ASSUME: No Salaries Payable has been previously recorded. Account Name Debit Credit Salaries Expense $79,500 Cash

At the beginning of January, Turner Construction Company pays $4,410 in worker’s compensation insurance for the first three months of the year. Account Name Debit Credit Prepaid Insurance $4,410 Cash

McGraw-Hill Publishing Company uses $754 worth of electricity and natural gas in its headquarters building for which it has not yet been billed. Note: Expense is incurred when utilities are used and can be recorded when amount is known. Account Name Debit Credit Utilities Expense $754 Utilities Payable

Arrow Shirt Company completes production of 500 men’s shirts ordered by Bon-Ton’s Department Store at a cost of $10 each and delivers the order. Note: No information was provided about sales information. Would have been Accounts Receivable and Sales Revenue. Account Name Debit Credit Cost of Goods Sold $5,000 Inventory

The campus bookstore receives 500 accounting texts at a cost of $43 each. The terms indicate that payment is due within 30 days of delivery. Account Name Debit Credit Inventory $21,500 Accounts payable

During the last week of January, the campus bookstore sold 450 accounting texts received in part e at a sales price of $92 each. Assume cost data from part e (cost of $43 per book) Account Name Debit Credit Cash $41,400 Sales Revenue Account Name Debit Credit Cost of Goods Sold $19,350 Inventory

Fucillo Hyundai, Inc. pays its salespersons $3,200 in commissions related to December automobile sales. Assume: Company had previously recorded commissions payable. Account Name Debit Credit Commissions Payable $3,200 Cash

Fucillo Hyundai, Inc. determines that it will pay its salespersons $4,470 in commissions related to January sales. The payment will be made in early February. Account Name Debit Credit Commissions Expense $4,470 Commissions Payable

A new grill is purchased and installed at a Wendy’s restaurant at the end of the day on January 31; $8,750 cash payment was made on that day. Account Name Debit Credit Equipment $8,750 Cash

The University of Florida orders 60,000 season football tickets from its printer and pays $5,410 in advance for the custom printing. The first game will be paid in September. Account Name Debit Credit Tickets Receivable $5,410 Cash

Carousel Mall had janitorial supplies costing $4,000 in storage Carousel Mall had janitorial supplies costing $4,000 in storage. An additional $2,600 worth of supplies was purchased during January. At the end of January, $410 worth of janitorial supplies remained in storage. Assume: Purchase of supplies was properly recorded, just recording the supplies used. Account Name Debit Credit Supplies Expense $6,190 Supplies

An Iowa State University employee works eight hours, at $13 per hour, on January 31; however, payday is not until February 3. Account Name Debit Credit Wages Expense $104 Wages Payable

Wang Company paid $3,600 for a fire insurance policy on January 1 Wang Company paid $3,600 for a fire insurance policy on January 1. The policy covers 12 months beginning January 1. Account Name Debit Credit Prepaid Insurance $3,600 Cash

Darrius Incorporated has its delivery van repaired for $300 and charges the amount on account. Account Name Debit Credit Repairs & Maintenance Expense $300 Accounts Payable (Maint. Payable)

Hass Company, a farm equipment company, receives its phone bill at the end of January for $202 for January calls. The bill has not been paid to date. Account Name Debit Credit Phone Expense $202 Accounts Payable

Martin Company receives and pays in January a $1,285 invoice (bill) from a consulting firm for services received in January. Account Name Debit Credit Consulting Expense $1,285 Cash

Parillo’s Taxi Company pays a $595 invoice from a consulting firm for services received and recorded in December. Account Name Debit Credit Accounts payable $595 Cash