Journal Entries for Expense Transactions Chapter 3 Journal Entries for Expense Transactions

Homework E3-5 + NE - Transaction Assets Liab SE Revenues Expenses Net Income a. Issued stock to organizers for cash + NE Purchased equipment on credit c. Declared and paid cash dividends - d. Earned revenue, collected cash e. Incurred expenses, on credit f. Earned revenue, on credit g. Paid cash on account h. Incurred expenses, paid cash

Homework E3-5 + NE +/- - Transaction Assets Liab SE Revenues Expenses Net Income i. Earned revenue, collected 3/4ths in cash, balance on credit. + NE j. Borrowed cash from local bank Collected cash from customers on account +/- l. Experienced theft (a loss) of $100 cash - m. Incurred expenses, paid 4/5ths in cash, balance on credit n. Paid income tax expense for the period

E3-4

McGraw-Hill Publishing Company uses $2,754 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 $2,754 Utilities Payable

At the beginning of January, Turner Construction Company pays $846 for magazine advertising to run in monthly publications of the first three months of the year. Account Name Debit Credit Prepaid Advertising $846 Cash

ASSUME: No Salaries Payable has been previously recorded. Dell pays its computer service technicians $379,500 in salaries for two weeks ended January 7. ASSUME: No Salaries Payable has been previously recorded. Account Name Debit Credit Salaries Expense $379,500 Cash

The University of Florida orders 60,000 season football tickets from its printer and pays $7,610 in advance for the custom printing. The first game will be paid in September. Answer from the University's standpoint. Account Name Debit Credit Prepaid Tickets $7,610 Cash

The campus bookstore receives 500 accounting texts at a cost of $89 each. The terms indicate that payment is due within 30 days of delivery. Account Name Debit Credit Inventory $44,500 Accounts payable

During the last week of January, the campus bookstore sold 450 accounting texts received in part e at a sales price of $150 each. Assume cost data from part e (cost of $89 per book) Account Name Debit Credit Cash $67,500 Sales Revenue Account Name Debit Credit Cost of Goods Sold $40,050 Inventory

Fucillo Hyundai, Inc. pays its salespersons $13,200 in commissions related to December automobile sales. Assume: Company had previously recorded commissions payable. Account Name Debit Credit Commissions Payable $13,200 Cash

On January 31, Fucillo Hyundai, Inc On January 31, Fucillo Hyundai, Inc. determines that it will pay its salespersons $14,470 in commissions related to January sales. The payment will be made in early February. Answer from Fucillo’s perspective. Account Name Debit Credit Commissions Expense $14,470 Commissions Payable

A new grill is purchased and installed at a Wendy’s restaurant at the end of the day on January 31; a $12,750 cash payment was made on that day. Account Name Debit Credit Equipment $12,750 Cash

Carousel Center Mall had janitorial supplies costing $4,000 in storage Carousel Center 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, $1,410 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 $5,190 Supplies

An Iowa State University employee works eight hours, at $13 per hour, on January 31; however, payday is not until February 3. Answer from the perspective of the university. 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 in January 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 Telephone 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

Phillips-Van Heusen Corporation completes production of 500 men’s shirts ordered by Macy’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

E3-13 Do in your Groups PREPARE JOURNAL ENTRIES Determine Cash Flow Category (Operating, Investing, Financing, Non-Cash Operating, Non-Cash Investing and Financing)

a. Received $80,000 cash from each of the two shareholders to form the corporation, in addition to $2,000 in accounts receivable, $5,300 in equipment, a van (equipment) appraised at a fair market value of $13,000 and $1,200 in supplies. Account Name Debit Credit Cash $160,000 Accounts Receivable $ 2,000 Equipment $ 18,300 Supplies $ 1,200 Contributed Capital $181,500 Cash flow from FINANCING ACTIVITIES.

b. Purchased a vacant store for sale in a good location for $360,000, making a $72,000 cash down payment and signing a 10-year mortgage from a local bank for the rest. Account Name Debit Credit Building $360,000 Cash $ 72,000 Notes Payable $288,000 Cash flow from INVESTING ACTIVITIES ($72,000) and Non-Cash Investing and Financing Activity ($288,000).

c. Borrowed $50,000 from the local bank on a 10%, one year note. Account Name Debit Credit Cash $50,000 Notes Payable Cash flow from FINANCING ACTIVITIES.

Purchased and used food and paper supplies costing 10,830 in March; paid cash. Purchase of Supplies: Use of Supplies: Account Name Debit Credit Supplies $10,830 Cash Cash flow from OPERATING ACTIVITIES. Account Name Debit Credit Supplies Expense $10,830 Supplies Non-Cash OPERATING ACTIVITIES.

e. Catered four parties in March for $4,200; $1,600 was billed and the rest was received in cash. Account Name Debit Credit Cash $2,600 Accounts Receivable $1,600 Catering Revenue $4,200 Cash flow from OPERATING ACTIVITIES ($2,600); Non-Cash Operating Activity ($1,600).

f. Made and sold food at the retail store for $11,900 cash f. Made and sold food at the retail store for $11,900 cash. (assume the cost of these sales was already recorded as part of transaction d.) Account Name Debit Credit Cash $11,900 Food Sales Revenue Cash flow from OPERATING ACTIVITIES.

g. Received a telephone bill for March to be paid in April. Account Name Debit Credit Telephone Expense $420 Telephone Payable Non-Cash OPERATING ACTIVITIES.

h. Paid $363 in gas for the van in March. Account Name Debit Credit Gas Expense $363 Cash Cash flow from OPERATING ACTIVITIES.

i. Paid $6,280 in wages to employees who worked in March. Account Name Debit Credit Wages Expense $6,280 Cash Cash flow from OPERATING ACTIVITIES.

j. Paid a $300 dividend from the corporation to EACH owner. Account Name Debit Credit Retained Earnings $600 Cash Cash flow from FINANCING ACTIVITIES.

k. Purchased $50,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $20,000 (added to the cost of the building); paid cash. Account Name Debit Credit Equipment $50,000 Building $20,000 Cash $70,000 Cash flow from INVESTING ACTIVITIES.