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 )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 22, 2024

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.)