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ACCT 211 Lecture : Liberty_University_ACCT_211_Quiz_2_Accounting_for_Merchandising__Inventories_and_Control_of_Cash_ans 22-23

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amramr328
28 Mar 2023
School
Liberty University
Department
Accounting
Course
ACCT 211
Professor

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Related Questions

CP2-2 Recording Transactions (in a Journal and T-Accounts); Preparing and Interpreting the Balance Sheet [LO 2-2, LO 2-3, LO 2-4, LO 2-5]

[The following information applies to the questions displayed below.]

Athletic Performance Company (APC) was incorporated as a private company. The company’s accounts included the following at July 1:
Accounts Payable $ 6,700
Building 268,000
Cash 10,150
Common Stock 404,000
Equipment 34,750
Land 112,000
Notes Payable (long-term) 22,750
Retained Earnings 0
Supplies 8,550
During the month of July, the company had the following activities:
During the month of July, the company had the following activities:
a. Issued 3,400 shares of common stock for $340,000 cash.
b. Borrowed $34,250 cash from a local bank, payable in two years.
c. Bought a building for $211,000; paid $55,000 in cash and signed a three-year note for the balance.
d. Paid cash for equipment that cost $127,000.
e. Purchased supplies for $18,500 on account.
Required:
1.

Analyze transactions (a)–(e) to determine their effects on the accounting equation. (Enter any decreases to account balances with a minus sign.)

Assets = Liabilities + Stockholders' Equity
Cash Supplies Building Equipment Land Accounts Payable Notes Payable Common Stock Retained Earnings
Beg. 10,150 8,550 268,000 34,750 112,000 6,700 22,750 404,000
a.
b.
c.
d.
e.
End.
2.

Record the transaction effects determined in part 1 using journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1.) Issuance of 3,400 shares of common stock for $340,000 cash. Record the transaction.

2.) The borrowing of $34,250 cash from a local bank, payable June in two years. Record the transaction.

3.) The purchase of a building for $211,000; paid $55,000 in cash and signed a three-year note for the balance. Record the transaction.

4.) The payment of cash for equipment that cost $127,000. Record the transaction.

5.) The purchase of supplies for $18,500 on account. Record the transaction.

Transaction General Journal Debit Credit
a.

CP2-2 Part 3

3.

Summarize the journal entry effects from part 2 using T-accounts. (TIP: Enter the July 1 balances as the month’s beginning balances.)

Cash Supplies
Beg. Bal. Beg. Bal.
End. Bal. End. Bal.
Equipment Building
Beg. Bal. Beg. Bal.
End. Bal. End. Bal.
Land Accounts Payable
Beg. Bal. Beg. Bal.
End. Bal. End. Bal.
Notes Payable (long-term) Common Stock
Beg. Bal. Beg. Bal.
End. Bal. End. Bal.
Retained Earnings
Beg. Bal.
End. Bal.
4. Prepare a trial balance at July 31.
ATHLETIC PERFORMANCE COMPANY
Trial Balance
Debit Credit
Totals $0 $0

James Company began the month of October with inventory of$22,000. The following inventory transactions occurred during themonth: a. The company purchased merchandise on account for $32,500on October 12, 2016. Terms of the purchase were 2/10, n/30. Jamesuses the net method to record purchases. The merchandise wasshipped f.o.b. shipping point and freight charges of $570 were paidin cash. b. On October 31, James paid for the merchandise purchasedon October 12. c. During October merchandise costing $19,050 wassold on account for $29,400. d. It was determined that inventory onhand at the end of October cost $35,370. Required: 1. Assuming thatthe James Company uses a periodic inventory system, prepare journalentries for the above transactions including the adjusting entry atthe end of October to record cost of goods sold. (If no entry isrequired for a transaction/event, select "No journal entryrequired" in the first account field.) 2. Assuming that the JamesCompany uses a perpetual inventory system, prepare journal entriesfor the above transactions. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)

Alpha Company used the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the net method is used.

> Alpha Company purchased on account $2,700 of merchandise from Bravo Company on May 2, 2016.

> Alpha Company returned, to Bravo Company, $300 of this merchandise on May 3, 2016.

> Freight charges related to this transaction of $150 were paid by Bravo Company.

Use this information to prepare Alpha Company's General Journal entries (without explanation) for May 2 & May 3 entries. If no entry is required then write "No Entry Required."

General Journal:

Date

Accounts

Debit

Credit