This problem is based on the transactions for the Sweet Homes Company in your text. Prepare journal entries for each transaction and identify the financial statement impact of each entry.

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December 1 On December 1, Mike Sweet forms a consulting business, named Sweet Homes. Sweet Homes receives $68,000 cash from Mike Sweet in exchange for common stock. December 2 Sweet Homes pays $4,400 cash for supplies. The company's policy is to record all prepaid expenses in asset accounts. December 3 Sweet Homes pays $52,000 cash for equipment. December 4 Sweet Homes purchases $10,000 of supplies on credit from a supplier, CalTech Supply. December 5 Sweet Homes provides consulting services and immediately collects $6,100 cash. December 6 Sweet Homes pays $2,900 cash for December rent. December 7 Sweet Homes pays $1,400 cash for employee salary. December 8 Sweet Homes provides consulting services of $4,300 and rents its test facilities for $3,000. The customer is billed $7,300 for these services. December 9 Sweet Homes receives $7,300 cash from the client billed on December 8. December 10 Sweet Homes pays CalTech Supply $2,800 cash as partial payment for its December 4 $10,000 purchase of supplies. December 11 Sweet Homes pays $1,300 cash for dividends. December 12 Sweet Homes receives $4,100 cash in advance of providing consulting services to a customer. The company's policy is to record fees collected in advance in a balance sheet account. December 13 Sweet Homes pays $4,300 cash (insurance premium) for a 24-month insurance policy. Coverage begins on December 1. The company's policy is to record all prepaid expenses in a balance sheet account. December 14 Sweet Homes pays $2,020 cash for supplies. December 15 Sweet Homes pays $2,205 cash for December utilities expense. December 16 Sweet Homes pays $1,650 cash in employee salary for work performed in the latter part of December. December 1 On December 1, Mike Sweet forms a consulting business, named Sweet Homes. Sweet Homes receives $68,000 cash from Mike Sweet in exchange for common stock. December 2 Sweet Homes pays $4,400 cash for supplies. The company's policy is to record all prepaid expenses in asset accounts. December 3 Sweet Homes pays $52,000 cash for equipment. December 4 Sweet Homes purchases $10,000 of supplies on credit from a supplier, CalTech Supply. December 5 Sweet Homes provides consulting services and immediately collects $6,100 cash. December 6 Sweet Homes pays $2,900 cash for December rent. December 7 Sweet Homes pays $1,400 cash for employee salary. December 8 Sweet Homes provides consulting services of $4,300 and rents its test facilities for $3,000. The customer is billed $7,300 for these services. December 9 Sweet Homes receives $7,300 cash from the client billed on December 8. December 10 Sweet Homes pays CalTech Supply $2,800 cash as partial payment for its December 4 $10,000 purchase of supplies. December 11 Sweet Homes pays $1,300 cash for dividends. December 12 Sweet Homes receives $4,100 cash in advance of providing consulting services to a customer. The company's policy is to record fees collected in advance in a balance sheet account. December 13 Sweet Homes pays $4,300 cash (insurance premium) for a 24-month insurance policy. Coverage begins on December 1. The company's policy is to record all prepaid expenses in a balance sheet account. December 14 Sweet Homes pays $2,020 cash for supplies. December 15 Sweet Homes pays $2,205 cash for December utilities expense. December 16 Sweet Homes pays $1,650 cash in employee salary for work performed in the latter part of December.

Answer rating: 100% (QA)

To prepare journal entries for each transaction we need to record the financial transactions of Sweet Homes Company in the general journal Here are th... View the full answer