Question
Exercise 4-7 Write journal entries LO 6 The transactions relating to the formation of Blue Co. Stores, Inc., and its first month of operations follow.
Exercise 4-7 Write journal entries LO 6
The transactions relating to the formation of Blue Co. Stores, Inc., and its first month of operations follow. |
a. | The firm was organized and the stockholders invested cash of $8,400. |
b. | The firm borrowed $4,100 from the bank; a short-term note was signed. |
c. | Display cases and other store equipment costing $1,800 were purchased for cash. The original list price of the equipment was $1,980, but a discount was received because the seller was having a sale. |
d. | A store location was rented, and $1,350 was paid for the first month's rent. |
e. | Inventory of $14,800 was purchased; $9,000 cash was paid to the suppliers, and the balance will be paid within 60 days. |
f. | During the first week of operations, merchandise that had cost $4,000 was sold for $6,300 cash. |
g. | A newspaper ad costing $120 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month. |
h. | Additional inventory costing $4,450 was purchased; cash of $1,150 was paid, and the balance is due in 30 days. |
i. | In the last three weeks of the first month, sales totaled $14,000, of which $9,400 was sold on account. The cost of the goods sold totaled $8,900. |
j. | Employee wages for the month totaled $1,900; these will be paid during the first week of the next month. |
k. | The firm collected a total of $3,550 from the sales on account recorded in transaction i. |
l. | The firm paid a total of $4,350 of the amount owed to suppliers from transaction e. |
Required: |
Prepare the journal entries for each of these transactions. |
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