accounting-cycle-exercises-ii

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Unformatted text preview: ance to use your theoretical knowledge and apply it ﬁrst-hand to real situations and assignments during your studies. Given a high level of responsibility, plenty of To ﬁnd out more and apply, visit www.jobs.eads.com. You can also ﬁnd out more on our EADS Careers Facebook page. Download free eBooks at bookboon.com 5 Accounting Cycle Exercises II Problem 1 Problem 1 “Robert Dennis formed a corporation to provide concrete construction work. His jobs typically involve building parking lots, drives, and foundations. Robert provided the following information about transactions occurring during the first month of operation. Evaluate the transactions and prepare journal entries for this activity. Jan. 2, 20X5 Robert Dennis invested \$20,000 cash in the capital stock of the newly formed corporation. Jan. 4, 20X5 Purchased equipment on account for \$15,000. Jan. 12, 20X5 Received \$30,000 from customers for services rendered. Jan. 15, 20X5 Received a bill for construction supplies used in the amount of \$4,000. Jan. 18, 20X5 Provided \$6,400 of services on account. Jan. 20, 20X5 Paid employees \$4,600 for wages earned. Jan. 22, 20X5 Collected 60% of the amount due for the work provided on January 18. Jan. 23, 20X5 Paid 40% of the amount due on the equipment purchased on January 4. Jan. 25, 20X5 Purchased (and immediately used) construction supplies for cash in the amount of \$1200. Jan. 31, 20X5 The company paid Robert Dennis a \$3,000 dividend. Download free eBooks at bookboon.com 6 Accounting Cycle Exercises II Problem 1: Worksheet Worksheet 1 GENERAL JOURNAL Date Accounts Debit Credit 1-2X5 1-4-X5 1-12-X5 1-15-X5 1-18-X5 1-20-X5 1-22-X5 1-23-X5 1-25-X5 1-31-X5 Download free eBooks at bookboon.com 7 Accounting Cycle Exercises II Problem 1: Solution Solution 1 GENERAL JOURNAL Date 1-2X5 Accounts Debit Cash Credit 20,000 Capital Stock 20,000 Issued stock to Robert Dennis for cash 1-4-X5 Equipment 15,000 Accounts Payable 15,000 Purchased equipment on account 1-12-X5 Cash 30,000 Revenues 30,000 Provided services to customers for cash 1-15-X5 Supplies Expense 4,000 Accounts Payable 4,000 Received bill for cost of supplies 1-18-X5 Accounts Receivable 6,400 Revenues 6,400 Provided services to customers on account 1-20-X5 Wage Expense 2,300 Cash 2,300 Paid wages of employees 1-22-X5 Cash 3,840 Accounts Receivable 3,840 Collected 60% of the amount due from the transaction of Jan. 18 (\$6,400 X 60% = \$3,840) 1-23-X5 Accounts Payable 6,000 Cash 6,000 Paid 40% of the amount due for the transaction of Jan. 4 (\$15,000 X 40% = \$6,000) Download free eBooks at bookboon.com 8 Accounting Cycle Exercises II 1-25-X5 Problem 1: Solution Supplies Expense 1,200 Cash 1,200 Paid for supplies used 1-31-X5 Dividends 3,000 Cash 3,000 Paid dividends to Robert Dennis Download free eBooks at bookboon.com 9 Accounting Cycle Exercises II Problem 2 Problem 2 Anthony Moore recently formed an information technology services and consulting firm in England. He was very busy during the first month a...
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## This document was uploaded on 09/24/2013.

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