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299+accounting+wise+A

299+accounting+wise+A - A 1 B C D E F G WISE A ACCURAL 1997...

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WISE A EXAMPLE OF CASH VERSUS ACCURAL 1997 1998 Bought 400 pieces of timber at $10 each Paid 40% cash (1,600) Paid the rest ($2,400) Sold 200 pieces in 97 at $30/each Collected 60% ($3,600) Collected the rest ($2,400) Sold the remainding 200 pieces in 98 for $30/each collected $6,000 cash CASH ACCOUNTING 1997 1998 Cash In $3,600 $8,400 Cash Out $1,600 $2,400 Income $2,000 $6,000 ACCURAL ACCOUNTING Revenue $6,000 $6,000 Expenses 2,000 2,000 Income $4,000 $4,000 A B C D E F G 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
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INTERACTIONS FOR WISE A FOR 6 MONTHS $ Cash Sales $39,000 Collection for advanced Sales $18,000 Capital input $5,000 Loan $25,000 Pick up Truck $5,000 Payment for Rent $12,000 Payment for Merchandise $18,000 Wages Expense $3,500 Purchase of Furniture $7,500 Computer $1,500 Teradmill $1,000 Processing fees for loans $300 Utility bill $200 Misc Expenses $2,000 Total Utility bill $1,100 Bank interest due 6/30 next year Consignment sold but not paid $3,500 40% tax liability Exhibit 1 B C D E F G H I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
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Journal entries for 6 months Jake's Investment of $5K Cash $5000 Paid in Capital $5000 Bank Loan of $25K Cash $25,000 Loan Payable $25000 Bought Truck for $5K PP&E $5000 Cash $5000 Bought Computer for $1500 PP&E $1,500 Cash $1500 Bought Furniture for $7500 PP&E $7,500 Cash $7500 Prepaid Rent for 12 months $12,000
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