exercise 20 - 1 ACCOUNTING Exercise 20 Boeing 787 2...

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Unformatted text preview: 1 ACCOUNTING Exercise 20 Boeing 787 2 ECONOMIC EVENTS 1. Spend $14,000,000,000 for aircraft design and development. 2. Build 200 aircraft for $40,000,000,000. 3. Sell 160 aircraft to domestic companies, for cash, at $260,000,000 per aircraft. 4. Record $32,000,000,000 Cost of Sales. 5. Sell 20 aircraft to European customers, on credit, at $260,000,000 per aircraft. Invoice the customers in Euros, when the exchange rate is $1.00 = 1.00 Euro. 6. Record $4,000,000,000 Cost of Sales. 7. Declare a $400,000,000 dividend. 8. Pay $2,000,000 for machinery maintenance. 9. Pay $40,000,000 to overhaul equipment. The equipment now runs faster than it did before. 10. Europe customers pay 5,200,000,000 Euros for the aircraft purchases. We convert Euros to dollars when the exchange rate is $1.00 = 1.00 Euro. 11. Pay $4,000,000 to buy back shares of our own company. 12. Pay $6,000,000 to buy stock of another company. 3 ECONOMIC EVENTS 13. Pay $8,000,000 to buy bonds of another company. 14. Issue Bonds Payable and receive $100,000,000 cash (5 years,10% rate). 15. Receive $40,000,000 advertising invoice. 16. Receive $400,000 dividend from holding the stock of another company. 17. Sell bond investment for $7,600,000. 18. Sell treasury stock for $4,600,000. 19. Pay employees on pay day. Gross salaries are $100,000,000. Federal Withholding. .10,000,000 State Withholding. .3,000,000 FICA. .8% SDI. .1% 20. Accrue payroll taxes. FICA. .8% FUTA. .2% SUTA. .4% 4 ECONOMIC EVENTS 21. End of year. Accrue $10,000,000 interest on Bonds Payable. 22. End of year. Record depreciation on machinery (5 year lives, Sum of the Years Digits method) 23. End of year. Record depreciation on equipment (5 year lives, Double Declining Balance method) 24. End of year. Record depreciation on manufacturing building (40 year life, Straight Line method) 25. End of year. Transfer Net Income / (Loss) to Retained Earnings. 5 JOURNAL ENTRIES 1. 2. 3. 4. 5. 6 JOURNAL ENTRIES 6. 7. 8. 9. 10. 7 JOURNAL ENTRIES 11. 12. 13. 14. 15. 8 JOURNAL ENTRIES 16. 17. 18. 19. 20. 9 JOURNAL ENTRIES 21. 22. 23. 24. 25. 10 Cash Reference Transaction Current Balance Debit Credit Debit Credit 80,000,000,000 11 Manufacturing Building Reference Transaction Current Balance Debit Credit Debit Credit 2,000,000,000 12 Machinery Reference Transaction Current Balance Debit Credit Debit Credit 1,020,000,000 13 Equipment Reference Transaction Current Balance Debit Credit Debit Credit 1,000,000,000 14 Common Stock Reference Transaction Current Balance Debit Credit Debit Credit 10,000,000,000 15 Paid in Capital Reference Transaction Current Balance Debit Credit Debit Credit 60,000,000,000 16 Retained Earnings Reference Transaction Current Balance Debit Credit Debit Credit 14,020,000,000 17 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 18 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 19 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 20 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 21 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 22 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 23 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 24 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 25 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 26 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 27 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 28 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 29 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 30 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 31 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 32 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 33 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 34 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 35 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 36 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 37 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 38 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 39 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 40 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 41 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 42 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 43 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 44 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 45 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 46 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 47 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 48 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 49 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 50 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 51 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 52 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 53 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 54 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 55 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 56 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 57 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 58 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 59 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 60 _________________ A/C Reference Transaction Current Balance Debit Credit Debit Credit 61 TRIAL BALANCEpage 1 Account Debit Credit 62 TRIAL BALANCEpage 2 Account Debit Credit 63 TRIAL BALANCEpage 3 Account Debit Credit Total 64...
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exercise 20 - 1 ACCOUNTING Exercise 20 Boeing 787 2...

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