First Section Practice Problems 4

First Section Practice Problems 4 - 2. The journal entry to...

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Practice Problems During the first month of operations, Car Pool Inc completed the following transactions: Jan 2 Car Pool Inc received $33,000 cash and issued common stock to the stockholders Jan 3 Purchased supplies of $400 and equipment of $2,900 on account – Equipment is expected to last 5 years and have no residual value Jan 4 Performed service for a client and received cash of $1,700 Jan 7 Paid cash to acquire lane for $22,000 Jan 11 Performed service for a customer and billed the customer $1,100 Jan 16 Paid for the equipment purchased on Jan 3 Jan 17 Paid the telephone bill for $130 Jan 18 Received partial payment from customer on account of $550 Jan 22 Paid the water and electricity bill of $150 Jan 29 Received $1,100 cash for servicing the heating unit of a customer Jan 31 Paid employee salary of $2,300 Jan 31 Declared and paid dividend of $2,900 Record each transaction in the journal.
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1. Which of the following is not an asset account? a. Salary expense b. Service Revenue c. Common Stock d. None of the above accounts is an asset
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Unformatted text preview: 2. The journal entry to record the purchase of supplies on account a. Debits supplies inventory and credits account payable b. Credits supplies inventory and debits cash c. Credits supplies inventory and debits account payable d. Debits supplies expense and credits supplies inventory 3. If the credit to record the payment of an account payable is not posted, a. Expenses will be understated b. Liabilities will be understated c. Cash will be understated d. Cash will be overstated 4. Stuart Inc, a new company, completed these transactions. What will Stuarts total assets equal? (1) Stockholders invested $81,000 cash (2) Sales on account were $15,000 a. $66,000 b. $69,000 c. $96,000 d. $81,000 5. Which of the following transactions will increase an asset and increase revenue? a. Borrowing money from a bank b. Purchasing supplies on account c. Performing a service on account for a customer d. Collecting cash from a customer on an account receivable...
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First Section Practice Problems 4 - 2. The journal entry to...

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