READ THE FOLLOWING CAREFULLY! There will be 9transactions.
Three former college classmates decided to open a store nearcampus to sell wireless equipment to students. They created apublic company and issued stock to interested investors.
Required: Several transactions occurred in March.Each is described separately in this folder. For each transaction,indicate the COMPANY accounts that are affected, whether theyincrease or decrease, and the amount of the increase ordecrease.
YOU MUST FOLLOW DIRECTIONS BELOW. IF YOU DON'T, YOU MAYKNOW THE CORRECT ENTRY BUT THE COMPUTER WILL NOT RECOGNIZE IT ANDYOU WILL NOT RECEIVE CREDIT!
1.) After each transaction description, there are several"Account" submission boxes and corresponding "Amount" submissionboxes. To indicate the accounts that you think are affected, choosethem from the drop-down menu. But you MUST select them in the orderthat they are listed in the menu. FOR EXAMPLE, if you think thatCash and Inventory are affected by a particular transaction, youmust record the Cash impact first and the Inventory impact secondbecause that is the order that they are listed in the drop-downmenu. If you record the Inventory impact first and the Cash impactsecond, even if they are the correct accounts and even if you havethe correct dollar amounts, your answer will be consideredwrong.
2.) When you record the dollaramounts, be sure to use a minus sign to indicate a decrease in theaccount. You don't need to use a plus sign to indicate anincrease.
3.) There are always more "Account" and "Amount" submissionboxes available than are necessary. When you have indicated all theaccounts that are affected by the transaction, select "Leave Blank"from the drop-down menu for EACH of the remaining "Account"submission boxes (you can leave the "Amount" boxes blank).
4.) For transactions 3, 4, 5, and 8, you are given additionalinstructions. Read them carefully.
5.) You get 5 tries for each complete entry.
6.) The entries for transaction #8 is worth 4 points. Theentries for each of the other transactions are worth 2 point.
Transaction #1
On March 1, the three classmates opened a checking account for thecompany at a local bank. They each deposited $24,000 in exchangefor shares of stock. A few of their friends also purchased stockfor $15,000 that was deposited in the company account.
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and EquipmenT, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
Transaction #2
The company quickly acquired $38,000 in inventory, 70% of which wasacquired on open accounts that were payable after 30 days. The restwas paid for in cash.
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and EquipmenT, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
Transaction #3
A store was rented for $1,000 per month. A lease was signed for oneyear on March 1. Rent for the first 4 months was paid in advance.[Note: Record the March 1 transaction first and the March 31adjustment second.]
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and EquipmenT, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
Transaction #4
Website advertising was purchased for $3,000. They were able to geta good deal because one of the company's owners also owns stock inthe website company. The company also paid $5,000 for someadvertising in local newspapers. [Note: Combine both transactionsinto one entry].
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and EquipmenT, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
Transaction #5
Sales were $64,000. Cost of merchandise sold was 60% of its salesprice. 20% of the sales were for cash. [Note: Record the salestransaction first and the expense transaction second]
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and EquipmenT, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and EquipmenT, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
Transaction #6
Wages and salaries incurred in March amounted to $10,600, of which$5,200 was paid.
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and EquipmenT, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
Transaction #7
Miscellaneous expenses paid for in cash were $1,400.
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and EquipmenT, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
Transaction #8
On March 1, fixtures and equipment were purchased for $4,500 with adownpayment of $1,500 plus a $3,000 note payable in one year.Interest of 6.5% per year is due when the note is repaid. Theestimated life of the fixtures and equipment is 9 years with noexpected salvage value. Depreciation on the fixtures and equipmentis computed on a straight-line basis. [Note: Record the March 1equipment purchase first, then the March 31 depreciation adjustingentry, and finally the March 31 interest adjusting entry. Also,round all answers to the nearest cent.]
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and EquipmenT, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
Transaction #9
Cash dividends totalling $3,000 were declared and paid tostockholders on March 31.
- Type of Account? Cash Accounts, Receivable Inventory, PrepaidRent, Fixtures and Equipment, Accounts Payable, Interest Payable,Wages Payable, Notes Payable, Paid-in Capital, Retained Earnings,Leave Blank Dollar amount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, LeaveBlank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capital,Retained Earnings, Leave Blank Dollaramount:
- Type of Account? Cash Accounts, ReceivableInventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable,Interest Payable, Wages Payable, Notes Payable, Paid-in Capita,lRetained Earnings, LeaveBlank Dollaramount:
