TRANSACTION ANALYSIS: Below are selected business transaction that occurred during 2018 for Reading Railroad Construction Company. Reading Railroad sells replacement parts and railroad cars in the transportation industry. Please record the following journal entries.

Note: Journal entries that share the same number (1A, 1B, 1C, etc.) are related to each other.

Q27. Transaction 2: Reading Railroad purchased a piece of equipment for $100,000, paying $30,000 in cash and signing a note due in nine months, for the remaining balance. The transaction to record the purchase of the equipment should be:

A.Debit: Equipment $100,000; Credit: Inventory $30,000; Credit: ST Note Payable $70,000.

B.Debit Note Payable $100,000; Credit: Cash $30,000; Credit: Equipment $70,000.

C.Debit Equipment $100,000; Credit: Cash $30,000; Credit: ST Note Payable $70,000.

D.Debit: Retained Earnings $100,000; Credit: Cash $30,000; Credit: LT Note Payable $70,000.

TRANSACTION ANALYSIS: Below are selected business transaction that occurred during 2018 for Reading Railroad Construction Company. Reading Railroad sells replacement parts and railroad cars in the transportation industry. Please record the following journal entries.

Note: Journal entries that share the same number (1A, 1B, 1C, etc.) are related to each other.

Q26. Transaction 1B. The cost of the merchandise sold in the above transaction was $5,300. The transaction to record the cost of the merchandise sold should be:

	A.	Debit Cash; Credit: Cost of Goods Sold.
	B.	Debit: Retained Earnings; Credit: Cost of Goods Sold.
	C.	Debit: Cost of Goods Sold; Credit: Inventory.
	D.	Debit Cost of Goods Sold; Credit: Sales Revenue.

TRANSACTION ANALYSIS: Below are selected business transaction that occurred during 2018 for Reading Railroad Construction Company. Reading Railroad sells replacement parts and railroad cars in the transportation industry. Please record the following journal entries.

Note: Journal entries that share the same number (1A, 1B, 1C, etc.) are related to each other.

Q25. Transaction 1A. Reading Railroad sold products during the year for $10,000 cash and $5,000 on account (collection is expected within 30 days). The transaction to record the sale:

	A.	Debit: Cash $10,000 Debit: Sales Revenue $5,000; Credit: Unearned Revenue $15,000.
	B.	Debit Cash $10,000 Debit: Acct Payable $5,000; Credit: Sales Revenue $15,000.
	C.	Debit: Sales Revenue $15,000; Credit: Cash $10,000; Credit: Acct Receivable $5,000.
	D.	Debit: Cash $10,000; Debit: Acct Receivable $5,000; Credit: Sales Revenue $15,000.

1. Income Statement Preparation: The accounts and their balances are shown in no particular order:

   Cost of Goods Sold (COGS)	$90,000
   Depreciation Expense	5,000
   General and Administrative Expenses	27,000
   Interest Revenue	2,000
   Income Tax Expense	11,000
   Interest Expense	6,000
   Sales Revenues	150,000

   Q23. What is the dollar amount of the gross profit?

   		$ 60,000
   		$ 6,000
   		$24,000
   		$28,000

1. Balance Sheet Preparation: Standard Steele is a leading manufacturer and retailer of steel structures to build bridges. The following is adapted from December 31, 2018 annual financial report. Dollars are reported in thousand. Balances are shown in no particular order. The accounts have normal balances.

   Account Name	Balance	Account Name	Balance
   Accounts Payable	$30,000	Retained Earnings	$60,000
   Accounts Receivable	$30,000	Inventories	$20,000
   Notes Payable (3 month)	$6,000	Long-term Note Payable	$20,000
   Cash	$50,000	Property, Plant, & Equipment (net)	$110,000
   Common Stock	$80,000	Income Taxes Payable	$14,000

   Make sure your accounting equation (A=L + OE) is in balance or some of your answers are wrong!

   Q22. Stockholders Equity

   	A.	80,000
   	B.	100,000
   	C.	130,000
   	D.	140,000