itive comment between constructive feedback. (adsbygoogle = window.adsbygoogle || []).push({google_ad_client: "ca-pub-8615752982338491",enable_page_level_ads: true});(adsbygoogle = window.adsbygoogle || []).push({}); [Notes] 1999-2023, Rice University. 9) Cash is an asset that decreases on the credit side. You record another weeks revenue for the lawns mowed over the past week. You purchased the gas on account. In the journal entry, Accounts Receivable has a debit of $5,500. You have incurred more gas expense. Probably. Transaction 11: On January 27, 2019, provides $1,200 in services to a customer who asks to be billed for the services. Invested $20,000 cash in her business. Purchased dental supplies on account from Dazzle Company of In 2014 one in seven adults received a Starbucks gift card. December 8, 2015. https://www.prnewswire.com/news-releases/2015-gift-card-sales-to-reach-new-peak-of-130-billion-300189615.html, Sara Haralson. . She purchased $18,000 equipment in cash. Kurt has worked hard on his assignments, but his performance is below expectations. OpenStax is part of Rice University, which is a 501(c)(3) nonprofit. What does a journal entry look like when cash is paid? She purchased a truck for $30,000 for business use - paid $5,000 in cash and signed a 3-year note for the rest. If there were a $4,000 credit and a $2,500 debit, the difference between the two is $1,500. You can ask a new question or browse more Accounting questions. Account Titles The new corporation purchased new asset (supplies) for $500 but will pay for them later. You were the customer in this case. More expenses lead to a decrease in net income (earnings). Owners invested cash. Printing Plus provided the service, thus earning revenue. Owner's Capital Service Revenue would increase on the credit side. Apr. Performed services for a client and received cash of $700. The computer cost $2,400 and was purchased on account. Capital, A: Note:ItisassumedthattherequirementofthequestionistopreparetheJournalentries 2 Service Revenue has a credit balance of $5,500. During the first month of Accounts receivable is going up so total assets will increase by $5,500. 1. Cash was used to pay the utility bill, which means cash is decreasing. But before transactions are posted to the T-accounts, they are first recorded using special forms known as journals. are licensed under a, Use Journal Entries to Record Transactions and Post to T-Accounts, Explain the Importance of Accounting and Distinguish between Financial and Managerial Accounting, Identify Users of Accounting Information and How They Apply Information, Describe Typical Accounting Activities and the Role Accountants Play in Identifying, Recording, and Reporting Financial Activities, Explain Why Accounting Is Important to Business Stakeholders, Describe the Varied Career Paths Open to Individuals with an Accounting Education, Describe the Income Statement, Statement of Owners Equity, Balance Sheet, and Statement of Cash Flows, and How They Interrelate, Define, Explain, and Provide Examples of Current and Noncurrent Assets, Current and Noncurrent Liabilities, Equity, Revenues, and Expenses, Prepare an Income Statement, Statement of Owners Equity, and Balance Sheet, Describe Principles, Assumptions, and Concepts of Accounting and Their Relationship to Financial Statements, Define and Describe the Expanded Accounting Equation and Its Relationship to Analyzing Transactions, Define and Describe the Initial Steps in the Accounting Cycle, Analyze Business Transactions Using the Accounting Equation and Show the Impact of Business Transactions on Financial Statements, Explain the Concepts and Guidelines Affecting Adjusting Entries, Discuss the Adjustment Process and Illustrate Common Types of Adjusting Entries, Record and Post the Common Types of Adjusting Entries, Use the Ledger Balances to Prepare an Adjusted Trial Balance, Prepare Financial Statements Using the Adjusted Trial Balance, Describe and Prepare Closing Entries for a Business, Apply the Results from the Adjusted Trial Balance to Compute Current Ratio and Working Capital Balance, and Explain How These Measures Represent Liquidity, Appendix: Complete a Comprehensive Accounting Cycle for a Business, Compare and Contrast Merchandising versus Service Activities and Transactions, Compare and Contrast Perpetual versus Periodic Inventory Systems, Analyze and Record Transactions for Merchandise Purchases Using the Perpetual Inventory System, Analyze and Record Transactions for the Sale of Merchandise Using the Perpetual Inventory System, Discuss and Record Transactions Applying the Two Commonly Used Freight-In Methods, Describe and Prepare Multi-Step and Simple Income Statements for Merchandising Companies, Appendix: Analyze and Record Transactions for Merchandise Purchases and Sales Using the Periodic Inventory System, Define and Describe the Components of an Accounting Information System, Describe and Explain the Purpose of Special Journals and Their Importance to Stakeholders, Analyze and Journalize Transactions Using Special Journals, Describe Career Paths Open to Individuals with a Joint Education in Accounting and Information Systems, Analyze Fraud in the Accounting Workplace, Define and Explain Internal Controls and Their Purpose within an Organization, Describe Internal Controls within an Organization, Define the Purpose and Use of a Petty Cash Fund, and Prepare Petty Cash Journal Entries, Discuss Management Responsibilities for Maintaining Internal Controls within an Organization, Define the Purpose of a Bank Reconciliation, and Prepare a Bank Reconciliation and Its Associated Journal Entries, Describe Fraud in Financial Statements and Sarbanes-Oxley Act Requirements, Explain the Revenue Recognition Principle and How It Relates to Current and Future Sales and Purchase Transactions, Account for Uncollectible Accounts Using the Balance Sheet and Income Statement Approaches, Determine the Efficiency of Receivables Management Using Financial Ratios, Discuss the Role of Accounting for Receivables in Earnings Management, Apply Revenue Recognition Principles to Long-Term Projects, Explain How Notes Receivable and Accounts Receivable Differ, Appendix: Comprehensive Example of Bad Debt Estimation, Describe and Demonstrate the Basic Inventory Valuation Methods and Their Cost Flow Assumptions, Calculate the Cost of Goods Sold and Ending Inventory Using the Periodic Method, Calculate the Cost of Goods Sold and Ending Inventory Using the Perpetual Method, Explain and Demonstrate the Impact of Inventory Valuation Errors on the Income Statement and Balance Sheet, Examine the Efficiency of Inventory Management Using Financial Ratios, Distinguish between Tangible and Intangible Assets, Analyze and Classify Capitalized Costs versus Expenses, Explain and Apply Depreciation Methods to Allocate Capitalized Costs, Describe Accounting for Intangible Assets and Record Related Transactions, Describe Some Special Issues in Accounting for Long-Term Assets, Identify and Describe Current Liabilities, Analyze, Journalize, and Report Current Liabilities, Define and Apply Accounting Treatment for Contingent Liabilities, Prepare Journal Entries to Record Short-Term Notes Payable, Record Transactions Incurred in Preparing Payroll, Explain the Pricing of Long-Term Liabilities, Compute Amortization of Long-Term Liabilities Using the Effective-Interest Method, Prepare Journal Entries to Reflect the Life Cycle of Bonds, Appendix: Special Topics Related to Long-Term Liabilities, Explain the Process of Securing Equity Financing through the Issuance of Stock, Analyze and Record Transactions for the Issuance and Repurchase of Stock, Record Transactions and the Effects on Financial Statements for Cash Dividends, Property Dividends, Stock Dividends, and Stock Splits, Compare and Contrast Owners Equity versus Retained Earnings, Discuss the Applicability of Earnings per Share as a Method to Measure Performance, Describe the Advantages and Disadvantages of Organizing as a Partnership, Describe How a Partnership Is Created, Including the Associated Journal Entries, Compute and Allocate Partners Share of Income and Loss, Prepare Journal Entries to Record the Admission and Withdrawal of a Partner, Discuss and Record Entries for the Dissolution of a Partnership, Explain the Purpose of the Statement of Cash Flows, Differentiate between Operating, Investing, and Financing Activities, Prepare the Statement of Cash Flows Using the Indirect Method, Prepare the Completed Statement of Cash Flows Using the Indirect Method, Use Information from the Statement of Cash Flows to Prepare Ratios to Assess Liquidity and Solvency, Appendix: Prepare a Completed Statement of Cash Flows Using the Direct Method, Summary of T-Accounts for Printing Plus. 8) Prepare a journal entry to record this transaction. May 16 Hazel received $2,600 for services provided. There are no expiration dates on our stored value cards, and in most markets, we do not charge service fees that cause a decrement to customer balances. All the, A: Following are the requisite financial statement, A: Accounting Equation: An accounting equation is an statement of equality between the resources and, A: Accounting equation of the business says that total assets must be equal to total liabilities and, A: The journal entries are prepared to keep the record of day to day transactions of the business. The new entry is recorded under the Jan 10 record, posted to the Service Revenue T-account on the credit side. In the journal entry, Cash has a debit of $2,800. She bought beauty supplies for P7,000 cash and bought salon furniture worth P80,000 on account. Required: B) The delegation was reported as requesting, They met with Lewis and Clark and made a peace treaty with the U.S. government. Ren. Service Revenue is a revenue account affecting equity. He also withdraw $30,000 from the business. Purchased dental supplies on account from Smile Company $4.000, Performed dental services and billed insurance companies 55.100. 2 Hired a secretary-receptionist at a salary of 2,000 per month. occurred. This is posted to the Cash T-account on the debit side. Invested personal cash of $1,000 in the business. A) Set clear expectations for each team member, with SMART goals. It is deduced that he is the Owner of the company but the Owner are treated separately from its business in accounting. Cash Sales If you are redistributing all or part of this book in a print format, 25 shares of WUF stock, (attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license), National Retail Federation (NRF). Received $2,100 cash for services performed from Michael Withdrew cash of $1,800 for personal use, On March 1, Ms. Ann Joy established AJ Beauty Salon. Lets check the accounting equation: Assets $30,200 (Cash $15,700 + Supplies $500 + Equipment $5,500 + Truck $8,500) = Liabilities $200 + Equity $30,000. Cash was used to pay for salaries, which decreases the Cash account. Recall that the general ledger is a record of each account and its balance. The balance in this Cash account is a debit of $24,800. You will notice that the transactions from January 3, January 9, January 12, and January 14 are listed already in this T-account. accounts. Another key element to understanding the general ledger, and the third step in the accounting cycle, is how to calculate balances in ledger accounts. Jack owns a convertible bond with a $1,000 face value that can be exchanged for Except where otherwise noted, textbooks on this site 1) This creates a liability for Printing Plus, who owes the supplier money for the equipment. Ms. Ann had major repairs in her residence amounting to P550,000 which was paid by the business. They, Y=20000 (.15) Y=20000 (.85) Y=20000 (1.15) Y=20000 +15x. May 1 Clark invested $20,000 cash in her business. (A)-Journalize Apr.1 Invested $20,000 cash in her business Dr Cash $20,000 Cr Common stock $20,000 Apr.1 Hired a secretary-receptionist at a salary of $700 per week payable monthly No Entry required Apr.2 Paid office rent for the month $1,100 Dr Rent expense $1,100 Cr Cash $1,100 Apr.3 Purchased dental supplies on account from Dazzle Company Debits on the liabilities and equity side of the equation total $4,000 (100 + 3,600 + 300). The new corporation received $30,000cash in exchange forownership incommon stock (10,000 sharesat $3 each). Invested $20,000 cash in her business .m, journalize, A: Journal entries are used to record the transactions of the business and entries are posted into, A: SOLUTION- Transaction 1: On January 3, 2019, issues $20,000 shares of common stock for cash. Cash is decreasing because it was used to pay for the outstanding liability created on January 5. Salon net income for the month is P180,000. Assets increase on the debit side; therefore, the Equipment account would show a $3,500 debit. Transaction 3: On January 9, 2019, receives $4,000 cash in advance from a customer for services not yet rendered. Journal, A: Whenever cash is invested in the business, then it increases cash for the business and capital for. Service Revenue has a credit of $1,200. A, A: Journal is first book where any transaction is entered. and you must attribute OpenStax. The corporation paid $300 in cash and reduced what they owe to Office Lux. (If Amy . When calculating balances in ledger accounts, one must take into consideration which side of the account increases and which side decreases. Merely placing an order for goods is not a recordable transaction because no exchange has taken place. May 7 Hazel received $1,000 in advance for services to be completed by the end of the month. It's important to note that the 4% rule is just a guideline and may not work for . Transaction analysis (to save space we will look at the effects of each of the remaining transactions only): The only account balances that changed from transaction 5 are Cash and Prepaid Rent. May 12 Hazel received $500 from a client for services provided. Once all journal entries have been posted to T-accounts, we can check to make sure the accounting equation remains balanced. Goods given away as charity by him were $20,000. 1 Hired a secretary-receptionist at a salary of 700 per week payable monthly. 5) This is posted to the Cash T-account on the credit side beneath the January 14 transaction. Printing Plus provided the services, which means the company can recognize revenue as earned in the Service Revenue account. This creates an Accounts Receivable for Printing Plus. She borrowed $20,000 from bank by signing a 5-year note. INCREASE Equipment 30,000 and INCREASE Accounts Payable 30,000 Paid $4,000 cash for May rent on storage space. See Answer Question: Emily Valley is a licensed dentist. 3 Purchased $2,500 of supplies on account from Read Supply Company. Last-Minute Shoppers Rejoice! Transaction 10: On January 23, 2019, received cash payment in full from the customer on the January 10 transaction. No matter the size of a company and no matter the product a company sells, the fundamental accounting entries remain the same. Identify the articles that correctly complete the following sentence. 101 This liability is increasing, as the company now owes money to the supplier. On January 17, 2019, receives $2,800 cash from a customer for services rendered. Mr. Decker invested $20,000 in cash in his new business.. P2-2A: Desiree Clark is a licensed CPA.During the first month of operations of her business, the following events and transactions occurred. Liabilities decrease on the debit side; therefore, Accounts Payable will decrease on the debit side by $3,500. Paid office rent for. You will notice that the transaction from January 3 is listed already in this T-account. Payments made to MERALCO and MAYNILAD are P12,000 and P3,400, respectively. These are based, A: Introduction: Metro Corporation collected a total of $5,000 on account from clients who owned money for services previously billed. The assets owned by the business will then be calculated as: $35, 000 (what it owes) + $115,000 (what stockholders invested) = $150,000 (what the company has in assets).
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