Exercises: Unit 3 Financial Accounting

journal entry practice exercises

The cash was received, and a note promising to return the $ 80,000 on 2010 May 30, was signed. 7 Office equipment was purchased on account from Wagner Company for $ 76,800. 3 Paid rent for August on a building and laundry equipment rented, $ 3,000. 10 Equipment was purchased for $ 50,000; a note was given, to be paid in 30 days. 8 Desks and chairs were purchased for the office on account, $ 28,800. The primary key to our success is our 39,000 employees who wear those orange aprons you see in our stores.

  • 15 Collected cash from customers on account, $ 75,000.
  • Vertical analysis involves showing the percentage of total liabilities and stockholder’s equity that each account represents as of the balance sheet dates.
  • 25 Laundry services were performed for customers who paid immediately, $ 22,000.
  • Apr. 1 Cash of $ 500,000 was received for capital stock issued to the owners.
  • An organization can, after all, accomplish more when people work together instead of against each other.

Write the letter of the transaction in the account before the dollar amount. Exercise E  Prepare journal entries to record each of the following transactions for Sanchez Company. Use the letter of the transaction in place of the date. …We want our people to be themselves and to be bold enough to apply their talents as individuals. Certainly, people can often perceive great risk acting this way. An organization can, after all, accomplish more when people work together instead of against each other.

Then show how the journal entry would be posted to T-accounts. You need not include explanations or account numbers. Read the information and write a memo to your instructor about your search and what you learned about certain jobs in accounting. Annual report analysis B Refer to the Annual Report of The Limited, Inc. in the Annual Report Appendix. Perform horizontal and vertical analyses of the liabilities and stockholder’s equity sections of the balance sheets for the two most recent years shown.

6 End-of-Chapter Exercises

6 Purchased delivery trucks for $ 280,000; payment was made by giving cash of $ 150,000 and a 30-day note for the remainder. Jan. 1 The company received $ 560,000 cash and $ 240,000 of office furniture in exchange for $ 800,000 of capital stock. 20 Collected cash of $ 4,500 from customers on account (see March 12 entry). Jan 12 Purchased insurance for January on the delivery trucks. Exercise D For each of the following unrelated transactions, give the journal entry to record the transaction.

journal entry practice exercises

15 Purchased trucks for $ 150,000, paying $ 120,000 cash and giving a 60-day note to the dealer for $ 30,000. July 1 The company issued $ 600,000 of capital stock for cash. Prepare the journal entries required to record these transactions in the general journal of the company.

Chapter 4 Exercise: Recording transactions with journal entries Transactional Journal Entries

9 Paid $ 2,200 for supplies received and used in March.

The heading of the memorandum should contain the date, to whom it is written, from whom, and the subject matter. Business decision case A John Jacobs lost his job as a carpenter with a contractor when a recession hit the construction industry. He decided to form his own company, Jacobs Corporation, and do home repairs.

Feb. 25 Received payment of $ 4,400 for remodeling a basement into a recreation room. The homeowner purchased all of the building materials. A debit of $ 16,000 for a semiannual dividend was posted as a credit to the Capital Stock account. 15 Received and paid a bill for $ 430 for supplies used in operations. 13 Purchased $ 240 of supplies on account for use in December.

journal entry practice exercises

July 18 Paid for supplies received and already used, $ 2,880. 14 Supplies were purchased on account for use this month, $ 3,000. 10 Collections were made for the services performed on August 6, $ 3,200.

SHORT ANSWER QUESTIONS, EXERCISES AND PROBLEMS

24 Collected an additional $ 6,000 from customers on account. 25 Laundry services were performed for customers who paid immediately, $ 22,000. Exercise F Using the data in the previous problem, post the entries to T-accounts.

  • 23 Cash collected from customers on account, $ 2,600.
  • 15 Received and paid a bill for $ 430 for supplies used in operations.
  • Perform horizontal and vertical analyses of the liabilities and stockholder’s equity sections of the balance sheets for the two most recent years shown.
  • Use the letter of the transaction in place of the date.

12 Performed delivery services for customers who promised to pay $ 27,000 at a later date. Exercise G Using your answer for the previous exercise, prepare a trial balance. Seek information on the advantages and disadvantages of working for a CPA firm. Also, inquire about the nature of the work and the training programs offered by the firm for new employees. As a team, write a memorandum to the instructor summarizing the results of the interview.

Financial Accounting

The balance of $ 12,000 in the Advertising Expense account was entered as $ 1,200 in the trial balance. 13 Cash collections from customers on account, $ 36,000. Apr. 1 Cash of $ 500,000 was received for capital stock issued to the owners. Aug. 1 Received cash for capital stock issued to owners, $ 400,000.

Exercises: Unit 3

Prepare a corrected trial balance as of 2010 December 31. Also, write a description of the effect(s) of each error. 31 Sales of delivery services on account amounted to $ 11,400. 17 Cash received for delivery services to date amounted to $ 1,800.

Apr. 10 Received $ 7,000 for converting a room over a garage into an office for a college professor. The professor purchased all of the materials for the job. Miscellaneous Expense (Account No. 568), with a balance of $ 3,200, was omitted from the trial balance. A credit of $ 4,800 to Accounts Receivable in the journal was not posted to the ledger account at all. Equipment was understated (too low) by $ 12,000 because of an error in addition in determining the balance of that account in the ledger. 29 Paid the equipment repair bill received on the 19th, $ 225.

Horizontal analysis involves showing the dollar amount and percentage increase or decrease of the latest year over the preceding year amounts. Vertical analysis involves showing the percentage of total liabilities and stockholder’s equity that each account represents as of the balance sheet dates. Write comments on any important changes between the two years that are evidence of decisions made by management.

Exercises: Unit 3

23 Cash collected from customers on account, $ 2,600. 8 Secured an order from a customer for laundry services of $ 7,000. Prepare a corrected trial balance for the Quick-Fix TV Repair Company as of December 31. Problem E Marc Miller prepared the following trial balance from the ledger of the Quick-Fix TV Repair Company. 15 Collected cash from customers on account, $ 75,000.

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