ADM 1340 Lecture Notes - Lecture 3: Cash Cash, Accounts Payable, General Ledger

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26 Apr 2017

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ADM 1340 Full Course Notes

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The recording process (cid:848)(cid:311) analyze business transactions (cid:849) . The recording process (cid:312) journalize the transactions (cid:851)(cid:313) post to general ledger accounts (cid:850) (cid:314) prepare a trial balance (cid:311) transaction analysis (first step) A(cid:272)(cid:272)ou(cid:374)ti(cid:374)g t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)s o(cid:272)(cid:272)u(cid:396) (cid:449)he(cid:374) assets, lia(cid:271)ilities, o(cid:396) sha(cid:396)eholde(cid:396)s" equity items change as a result of some economic event. Each transaction has a dual effect on the accounting equation. + sha(cid:396)eholde(cid:396)s": issue of common shares for cash, issue of note payable cash cash, purchase of equipment in cash, receipt of cash in advance from customers, payment of rent in cash. 6. prepaid insurance in cash cash prepaid: purchase of supplies on account. 8. service performed on account: payment of salaries insurance. An account is an individual accounting record of increases and decreases in a specific asset, lia(cid:271)ility, o(cid:396) sha(cid:396)eholde(cid:396)s" e(cid:395)uity ite(cid:373). The normal balance of an account id always on its increase side.

Related Questions

CP2-2 Recording Transactions (in a Journal and T-Accounts); Preparing and Interpreting the Balance Sheet [LO 2-2, LO 2-3, LO 2-4, LO 2-5]

[The following information applies to the questions displayed below.]

Athletic Performance Company (APC) was incorporated as a private company. The companyâs accounts included the following at July 1:


Accounts Payable	$	6,700
Building		268,000
Cash		10,150
Common Stock		404,000
Equipment		34,750
Land		112,000
Notes Payable (long-term)		22,750
Retained Earnings		0
Supplies		8,550

During the month of July, the company had the following activities:

a.	Issued 3,400 shares of common stock for $340,000 cash.
b.	Borrowed $34,250 cash from a local bank, payable in two years.
c.	Bought a building for $211,000; paid $55,000 in cash and signed a three-year note for the balance.
d.	Paid cash for equipment that cost $127,000.
e.	Purchased supplies for $18,500 on account.

Required:

Analyze transactions (a)â(e) to determine their effects on the accounting equation. (Enter any decreases to account balances with a minus sign.)

	Assets					=	Liabilities		+	Stockholders' Equity
	Cash	Supplies	Building	Equipment	Land		Accounts Payable	Notes Payable		Common Stock	Retained Earnings
Beg.	10,150	8,550	268,000	34,750	112,000		6,700	22,750		404,000
a.
b.
c.
d.
e.
End.

Record the transaction effects determined in part 1 using journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1.) Issuance of 3,400 shares of common stock for $340,000 cash. Record the transaction.

2.) The borrowing of $34,250 cash from a local bank, payable June in two years. Record the transaction.

3.) The purchase of a building for $211,000; paid $55,000 in cash and signed a three-year note for the balance. Record the transaction.

4.) The payment of cash for equipment that cost $127,000. Record the transaction.

5.) The purchase of supplies for $18,500 on account. Record the transaction.

a.

CP2-2 Part 3

Summarize the journal entry effects from part 2 using T-accounts. (TIP: Enter the July 1 balances as the monthâs beginning balances.)

Cash					Supplies
Beg. Bal.					Beg. Bal.



End. Bal.					End. Bal.

Equipment					Building
Beg. Bal.					Beg. Bal.


End. Bal.					End. Bal.

Land					Accounts Payable
Beg. Bal.					Beg. Bal.


End. Bal.					End. Bal.

Notes Payable (long-term)					Common Stock
Beg. Bal.					Beg. Bal.



End. Bal.					End. Bal.

Retained Earnings
Beg. Bal.

End. Bal.

4.	Prepare a trial balance at July 31.

ATHLETIC PERFORMANCE COMPANY
Trial Balance

	Debit	Credit










Totals	$0	$0

ochreoyster775

The following selected transactions were completed by Fasteners Inc. Co., a supplier of buttons and zippers for clothing:

20Y3
Nov.	21	Received from McKenna Outer Wear Co., on account, a $54,000, 60-day, 7% note dated November 21 in settlement of a past due account.
Dec.	31	Recorded an adjusting entry for accrued interest on the note of November 21.
20Y4
Jan.	20	Received payment of note and interest from McKenna Outer Wear Co.

Journalize the entries to record the transactions. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round answers to the nearest dollar amount.

CHART OF ACCOUNTS

Fasteners Inc. Co.

General Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable-McKenna Outer Wear Co.
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

EXPENSES

510

Cost of Merchandise Sold

520

Sales Salaries Expense

521

Advertising Expense

522

Depreciation Expense-Store Equipment

Office Salaries Expense

531

Rent Expense

532

Depreciation Expense-Office Equipment

533

Insurance Expense

534

Office Supplies Expense

535

Store Supplies Expense

Miscellaneous Expense

710

Interest Expense

Journalize the entries to record the transactions for the year 20Y3. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round answers to the nearest dollar amount.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4

Journalize the entries to record the transactions for the year 20Y4. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round answers to the nearest dollar amount.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4

viridiancrow437

Selected transactions completed by Primo Discount Corporationduring the current fiscal year are as follows:

Jan.	9	Split the common stock 3 for 1 andreduced the par from $75 to $25 per share. After the split, therewere 1,092,000 common shares outstanding.
Feb.	28	Purchased 39,500 shares of thecorporationâs own common stock at $29, recording the stock atcost.
May	1	Declared semiannual dividends of$0.60 on 74,300 shares of preferred stock and $0.14 on the commonstock to stockholders of record on June 1, payable on July 10.
Jul.	10	Paid the cash dividends.
Sep.	7	Sold 28,500 shares of treasurystock at $33, receiving cash.
Oct.	1	Declared semiannual dividends of$0.60 on the preferred stock and $0.14 on the common stock (beforethe stock dividend). In addition, a 5% common stock dividend wasdeclared on the common stock outstanding. The fair market value ofthe common stock is estimated at $38.
Dec.	1	Paid the cash dividends and issuedthe certificates for the common stock dividend.

Journalize the transactions. If no entry is required, simplyskip to the next transaction. Refer to the Chart of Accounts forexact wording of account titles.

CHARTOF ACCOUNTS

PrimoDiscount Corporation

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	AccumulatedDepreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
236	Stock Dividends Distributable
241	Salaries Payable
261	Mortgage Note Payable

Paid-In Capital in Excess ofPar-Common Stock

Paid-In Capital in Excess ofPar-Preferred Stock

331

Paid-In Capital from Sale ofTreasury Stock

Income Summary

Journalize the transactions. If no entry is required, simplyskip to the next transaction. Refer to the Chart of Accounts forexact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST.REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

	REVENUE
410	Sales
610	Interest Revenue

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ADM 1340 Lecture Notes - Lecture 3: Cash Cash, Accounts Payable, General Ledger

ADM 1340 Full Course Notes

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