ACC311 Accounting_Cycle Practice with Solution

ACC311 Accounting_Cycle Practice with Solution - Getting...

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Getting Financing Retail Corp. (Retail) began business operations on December 1, 2008. Its first order of business was to raise capital (cash). a. Issued 80,000 shares of common stock for $800,000 cash. Journal
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Ramping up for business…Investing b. Acquired for cash land costing $50,000 and a building costing $450,000. The building has an expected useful life of 25 years. Journal
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Ramping up for business…Operating c. Purchased merchandise inventory costing $280,000 on account from various suppliers. Journal
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Ramping up for business…Operating d. Paid $250,000 on account for the inventory previously purchased. Journal
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Ramping up for business…Operating e. Paid $12,000 for a one-year insurance policy on the land and building. The insurance coverage begins next month. Journal
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Ramping up for business…Financing f. Borrowed $300,000 from a bank on December 31. The loan bears interest at an annual rate of 8% and is due in five years. Journal
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Investing and Financing g. Acquired equipment on December 31, 2008 costing $80,000 and signed a 6% note to the dealer. The note is due in six months. The equipment has an estimated useful life of five years. Journal
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ACC311 Accounting_Cycle Practice with Solution - Getting...

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