Question
On January 1, 2020, the books and records of ABC, Inc. showed the following balances (normal debits and credits) Cash $100,000 Accounts Receivable $55,000 Supplies
On January 1, 2020, the books and records of ABC, Inc. showed the following balances (normal debits and credits)
Cash $100,000
Accounts Receivable $55,000
Supplies $12,000
Accounts Payable $17,000
Salaries Payable $ 7,500
Common Stock $20,500
Retained Earnings $17,000
The following events occurred during 2020:
- Paid the 1/1/2020 balance in salaries payable.:
- Purchased supplies of $4,000 with $1,000 cash and the rest on account.
- Provided services of $25,000 to customers on account.
- Purchased office equipment for $20,000 with $1,000 cash and a notes payable for the remaining amount.
- Received $4,000 from a customer for services that Enterprise, Inc. agreed to perform in 2020.
- Collected $2,000 cash from customers who had previously purchased on account.
- Paid cash of $2,500 to a creditor on account.
- Signed a contract to hire a new controller at an annual salary of $105,000. She will begin working for Enterprise on 2/1/2020.
- Paid current salaries of $125,000.
- Paid $20,000 for insurance coverage that begins on 1/1/2021.
Required:
Prepare all necessary journal entries in good form (DR and CR, account names and amounts) to account for the events listed above. If no entry is required, please indicate and explain why not. DO NOT prepare any month-end adjusting journal entries in this problem. (Although you are always welcome to use T-accounts, they are not required.)
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