ACCT 201 Lecture Notes - Lecture 10: Payroll Tax, Promissory Note, Current Liability
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The following are the transactions relating to the formation ofCardinal Mowing Services, Inc., and its first month ofoperations. |
| a. | The firm was organized and the initial stockholders investedcash of $780. |
| b. | The company borrowed $1,170 from a relative of one of theinitial stockholders; a short-term note was signed. |
| c. | Two zero-turn lawn mowers costing $624 each and a professionaltrimmer costing $169 were purchased for cash. The original listprice of each mower was $793, but a discount was received becausethe seller was having a sale. |
| d. | Gasoline, oil, and severalpackages of trash bags were purchased for cash of $117. |
| e. | Advertising flyers announcing the formation of the business anda newspaper ad were purchased. The cost of these items, $221, willbe paid in 30 days. |
| f. | During the first two weeks of operations, 47 lawns were mowed.The total revenue for this work was $917; $605 was collected incash, and the balance will be received within 30 days. |
| g. | Employees were paid $546 fortheir work during the first two weeks. |
| h. | Additional gasoline, oil, andtrash bags costing $143 were purchased for cash. |
| i. | In the last two weeks of thefirst month, revenues totaled $1,196, of which $488 wascollected. |
| j. | Employee wages for the last twoweeks totaled $663; these will be paid during the first week of thenext month. |
| k. | It was determined that at theend of the month the cost of the gasoline, oil, and trash bagsstill on hand was $39. |
| l. | Customers paid a total of $195 due from mowing services providedduring the first two weeks. The revenue for these services wasrecognized in transaction f. |
| Required: |
| Prepare the journal entries for above of the transactions. Journal entry options include: Accounts payable Accounts receivable Accumulated depreciation Additional paid-in capital Advertising expense Allowance for bad debts Apicâpreferred Bad debts expense Bonds payable Buildings Capital lease liability Cash Commissions expense Commissions payable Cost of goods sold Current maturities of long-term debt Deferred income taxes Deferred tax liabilities Depreciation expense Discount on bonds payable Discount on notes payable Dividends payable Employee contributions to pension plan Equipment Estimated health care expense Estimated liability for retiree health care--current Estimated warranty liability Federal unemployment taxes withheld Fica taxes withheld Gain on sale of equipment Goodwill Group hospitalization insurance Income tax expense Income taxes payable Income taxes withheld Insurance expense Interest expense Interest income Interest payable Interest receivable Interest revenue Inventory Keg deposits Keg deposits revenue Keg expense Land Loss of sale of equipment Loss on early retirement of bonds Loss on sale of machine Machine Medical insurance contributions Merchandise inventory Miscellaneous expense Note payable Note receivable Paid-in capital Parts inventory Payroll tax expense Payroll taxes payable Preferred stock Premium on bonds payable Prepaid insurance Prepaid rent Real estate tax expense Real estate taxes payable Rent expense Rent payable Rent revenue Retained earnings Serial bonds payable Service revenue Subscription revenue Supplies Supplies expense Supplies on hand Ticket revenue Treasury stock Trucks Unearned rent revenue Unearned revenues Unearned subscription revenue Unearned ticket revenue Utilities expense Wages expense Wages payable Warranty expense Withholding liabilities and each journal entry is either credit ordebit.!!!! |
