Three former college classmates decided to open a store nearcampus to sell wireless equipment to students. They created apublic company and issued stock to interested investors. Required:Several transactions occurred in March. Each is describedseparately in this folder. For each transaction, indicate theCOMPANY accounts that are affected, whether they increase ordecrease, and the amount of the increase or decrease. YOU MUSTFOLLOW THE INSTRUCTIONS BELOW. IF YOU DON'T, YOU MAY KNOW THECORRECT ENTRY BUT THE COMPUTER WILL NOT RECOGNIZE IT AND YOU WILLNOT RECEIVE CREDIT. After each transaction description, there areseveral "Account" submission boxes and corresponding "Amount"submission boxes. To indicate the accounts that you think areaffected, choose them from the drop-down menu. But you MUST selectthem in the order that they are listed in the menu. FOR EXAMPLE, ifyou think that Cash and Inventory are affected by a particulartransaction, you must record the Cash impact first and theInventory impact second because that is the order that they arelisted in the drop-down menu. If you record the Inventory impactfirst and the Cash impact second, even if they are the correctaccounts and even if you have the correct dollar amounts, youranswer will be considered wrong. When you record the dollaramounts, be sure to use a minus sign to indicate a decrease in theaccount. You don't need to use a plus sign to indicate an increase.There are always more "Account" and "Amount" submission boxesavailable than are necessary. When you have indicated all theaccounts that are affected by the transaction, select "Leave Blank"from the drop-down menu for EACH of the remaining "Account"submission boxes (you can leave the "Amount" boxes blank). Fortransactions 3, 4, 5, and 8, you are given additional instructions.Read them carefully. You get 5 tries for each complete entry. Theentries for transaction #8 is worth 4 points. The entries for eachof the other transactions are worth 2 point.

Transaction 3
A store was rented for $1,200 per month. A lease was signed for oneyear on March 1. Rent for the first 4 months was paid in advance.[Note: Record the March 1 transaction first andthe March 31 adjustment second.]

Account: Dollar Amount:

Account: Dollar Amount

byzantiumsquirrel336

Record (journalize) transactions in the books) Doherty Tree Cellular, Inc.,
completed the following transactions during April 2012, its first month of operations:

Apr 1	Received $19,800 and issued common stock.
2	Purchased $200 of office supplies on account.
4	Paid $14,300 cash for land to use as a building site.
6	Performed service for customers and received cash of $2,600.
9	Paid $100 on accounts payable.
17	Performed service for UFax on account totaling $1,900.
23	Collected $100 from UFax on account.
30	Paid the following expenses: salary, $1,900; rent, $1,300.

1.Record the transactions in the journal of Doherty Tree Cellular, Inc. Key transactions by date and include an explanation for each entry.

CLASS, LETS TAKE RECORDING STEP 1 STEP FURTHER - THE TRIAL BALANCE

Now that we know what the accounting equation is and we have some experience with Journal Entries.

Letâs review the process and take the recording process one step further.

STEP 1) Analyze transaction: As an actual accountant, we determine if a transaction should be recorded by analyzing source documents.

For example: If the Company makes a sale; they will complete a sales document (or sales
tape is generated). If the Company purchases something a purchase invoice is forwarded to Accounting. There is a different type of source documents for different types of transactions.

Note: as an accountant a large part of the battle is making sure there is a source document for all transactions and that all departments capture and forward these documents to Accounting!

STEP 2) Accounting prepares journal entry: for each transaction based on GAAP. (Mostly using the constraints, assumptions, principles we've discussed: materiality, conservatism, matching, revenue recognition, etc).

The entry is entered into a Journal for those types of Transactions (There is a Sales Journal, A/P Journal for purchases, Payroll journal for payroll related entries, General Journal for misc. entries., etc.

Journal entries are made in the proper form, and include: date, description, indent of credit side of each entry.

STEP 3) The Journal entry is posted to General ledger; which includes all activity for all accounts.

However, the recording process is not over. Letâs talk about the trial balance. Please answer ALL however only post ONE question at a time to allow more to participate.

1) Why do we prepare it?

apricotox859

Three former college classmates decided to open a store nearcampus to sell wireless equipment to students. They created apublic company and issued stock to interested investors. Required:Several transactions occurred in March. Each is describedseparately in this folder. For each transaction, indicate theCOMPANY accounts that are affected, whether they increase ordecrease, and the amount of the increase or decrease. YOU MUSTFOLLOW THE INSTRUCTIONS BELOW. IF YOU DON'T, YOU MAY KNOW THECORRECT ENTRY BUT THE COMPUTER WILL NOT RECOGNIZE IT AND YOU WILLNOT RECEIVE CREDIT. After each transaction description, there areseveral "Account" submission boxes and corresponding "Amount"submission boxes. To indicate the accounts that you think areaffected, choose them from the drop-down menu. But you MUST selectthem in the order that they are listed in the menu. FOR EXAMPLE, ifyou think that Cash and Inventory are affected by a particulartransaction, you must record the Cash impact first and theInventory impact second because that is the order that they arelisted in the drop-down menu. If you record the Inventory impactfirst and the Cash impact second, even if they are the correctaccounts and even if you have the correct dollar amounts, youranswer will be considered wrong. When you record the dollaramounts, be sure to use a minus sign to indicate a decrease in theaccount. You don't need to use a plus sign to indicate an increase.There are always more "Account" and "Amount" submission boxesavailable than are necessary. When you have indicated all theaccounts that are affected by the transaction, select "Leave Blank"from the drop-down menu for EACH of the remaining "Account"submission boxes (you can leave the "Amount" boxes blank). Fortransactions 3, 4, 5, and 8, you are given additional instructions.Read them carefully. You get 5 tries for each complete entry. Theentries for transaction #8 is worth 4 points. The entries for eachof the other transactions are worth 2 point.

Transaction 8
On March 1, fixtures and equipment were purchased for $5,000 with adownpayment of $2,000 plus a $3,000 note payable in one year.Interest of 4% per year is due when the note is repaid. Theestimated life of the fixtures and equipment is 8 years with noexpected salvage value. Depreciation on the fixtures and equipmentis computed on a straight-line basis. [Note:Record the March 1 equipment purchase first, then the March 31depreciation adjusting entry, and finally the March 31 interestadjusting entry. Also, round allanswers to the nearest cent.]

Account: Dollar Amount:

Account: Dollar Amount

goldeagle874

ACCT-311 Lecture Notes - Lecture 8: Accounting Equation, Income Statement, Institute For Operations Research And The Management Sciences

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