Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Transaction Problem, please show me the the dollar amount and account during each Transaction Three former college classmates have decided to pool a variety of

Transaction Problem, please show me the the dollar amount and account during each Transaction

Three former college classmates have decided to pool a variety of work experiences by opening a store near campus to sell wireless equipment to students. The business has been incorporated as University Wireless.

Transaction 1 On March 1, the three classmates opened a checking account for The Wire at a local bank. They each deposited $21,000 in exchange for shares of stock. A few of their friends also purchased stock totaling $10,000 that was deposited in The Wire account.

Transaction 2 The company quickly acquired $44,000 in inventory, 60% of which was acquired on open accounts that were payable after 30 days. The rest was paid for in cash.

Transaction 3 A one-year store rental lease was signed on March 1 for $14,400 for the year, and rent for the first 3 months was paid in advance. [Note: Record the complete entry for the March 1 transaction first and the complete adjusting entry on March 31 second.]

Transaction 4 The owners paid $4,000 for website advertising. They were able to get a good deal because one of the company's owners also owns stock in the website company. The owners also paid $6,000 for some advertising in local newspapers. [Note: Combine both transactions into one entry].

Transaction 5 Sales were $72,000. Cost of merchandise sold was 60% of its sales price. 25% of the sales were for cash. [Note: Record the complete entry for the sales first and the complete entry for the expenses second]

Transaction 6 Wages and salaries in March were $11,200, of which $8,600 was actually paid to employees.

Transaction 7 Miscellaneous expenses were $1,700, all paid for with cash.

Transaction 8 On March 1, fixtures and equipment were purchased for $5,500 with a downpayment of $2,000 and a $3,500 note, payable in one year. Interest of 5% per year was due when the note was repaid. The estimated life of the fixtures and equipment is 11 years with no expected salvage value. [Note: Record the complete entry for the March 1 equipment purchase first, the March 31 depreciation adjusting entry second, and the March 31 interest adjusting entry third. Also, round all answers to the nearest cent.]

Transaction 9 Cash dividends totaling $3,600 were paid to stockholders on March 31.

image text in transcribedimage text in transcribed

Account: Account: Account: Account: Account: Account: Dollar amount: Dollar amount: Dollar amount: Dollar amount: Dollar amount: Dollar amount

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISO 27001 Controls A Guide To Implementing And Auditing

Authors: IT Governance

1st Edition

1787781445, 978-1787781443

More Books

Students also viewed these Accounting questions