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Journal Entry Questions

The company started business on June 6, 2013 with $300,000. During the first month they paid rent and purchased equipment, provided services to customers, paid bills and expenses. By June 28th they had engaged in various business transactions, providing and receiving payment for services, purchasing supplies and equipment, and paying operating expenses.

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Fareeha Naz
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1K views

Journal Entry Questions

The company started business on June 6, 2013 with $300,000. During the first month they paid rent and purchased equipment, provided services to customers, paid bills and expenses. By June 28th they had engaged in various business transactions, providing and receiving payment for services, purchasing supplies and equipment, and paying operating expenses.

Uploaded by

Fareeha Naz
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Journal Entry Questions.

Question 1:

The company started business on June 6, 2013. The business was started with $300,000. The
transactions they engaged in during their first month of business are below:

Date Transaction

June 8 An amount of $50,000 was paid for six months of rent.

Equipment costing $100,000 was purchased using


$40,000 cash. The remaining amount of $60,000 is a
June 9 one year note with an interest rate of 3.4%

Office supplies were purchased totaling $25,000 on


June 10 account.

Received $39,400 in cash for services rendered to


June 16 customers.

June 16 Paid the account for office supplies purchased June 10.

$63,900 worth of services were given to customers.


Received cash amount of $43,700. Customers promised
June 20 to pay remaining amount of $20,200.

Paid employees’ wages for June 8-June 21. Wages


June 21 totaled $23,500.

Received $20,200 in cash for services rendered to


June 21 customers on June 20.

Received $6,300 in cash as advanced payment from


June 22 customers.

Office supplies were purchased totaling $3,500 on


June 27 account.

June 28 Electricity bill received totaling $1,850.

June 28 Phone bill received totaling $2,650.

June 28 Miscellaneous expenses totaled $4,320.

These events would then be recorded into the accounting journal.


Question 2

These are the company’s transactions for the first month:

Date Transaction

March 3 $300,000 were paid as advanced rent for six months.

Office supplies were purchased on account totaling


March 4 $35,000.

Services were provided to customers, and the company


March 6 received $54,000 in cash.

The accounts payable for office supplies purchased on


March 7 March 4 was paid.

$200,000 in cash was used to purchase equipment


costing $560,000. The remaining $360,000 became a
March 7 one year note payable with interest rate of 4%.

Office supplies were purchased on account totaling


March 9 $13,500.

Services were provided to customers, and the company


March 12 received $43,500 in cash.

The accounts payable for office supplies purchased on


March 13 March 9 was paid.

Employees were paid wages for March 3-March 14


March 14 totaling $356,000.

Services were provided to customers totaling $256,720.


Customers paid $143,650 with a promise to pay
March 14 $113,070 remaining balance in the future.

Office supplies were purchased on account totaling


March 20 $5,400.

Customers paid $100,000 toward the $113,070


March 21 remaining balance for services rendered March 14.

The accounts payable for office supplies purchased on


March 23 March 20 was paid.

March 25
Customers paid $13,070 for services rendered March
14.

Customers paid $23,000 in advance for services to be


March 27 received.

Employees were paid wages for the final weeks of


March 28 March, totaling $453,600.

March 28 Electricity bill was received totaling $6,750.

March 28 Phone bill was received totaling $8,754.

Miscellaneous expenses for the month were totaled at


March 31 $15,450.

Question 3:

This company was incorporated January 1, 2014. They started out with a cash value of
$2,350,000. These are their transactions for the first month:

Date Transaction

Rent was paid in advance for a full year totaling


January 2 $750,000.

Equipment costing $830,000 was purchased. $310,000


was paid in cash, and the remaining amount of
$520,000 was a one year note payable with an interest
January 3 rate of 4.6%.

Office supplies were purchased on account totaling


January 3 $340,000.

Services were provided to customers, and the company


January 4 received $570,000 in cash.

Sales were made, and the company received $350,000


January 5 in cash.

The accounts payable for office supplies purchased on


January 6 January 3 was paid.

Sales were made totaling $475,000. Customers paid


$235,000 in cash and promised to pay the remaining
January 7 $240,000 in the future.
Services were provided to customers totaling $654,000.
Customers paid $300,000 in cash and promised to pay
January 8 the remaining $354,000 in the future.

Office supplies were purchased on account totaling


January 9 $115,000.

Customers paid $25,000 for sales made on January 7


January 10 leaving a balance of $215,000.

Employees were paid wages totaling $457,000 for the


January 11 first two weeks of January 2014.

The accounts payable for office supplies purchased on


January 12 January 9 was paid.

Customers paid $65,000 for services rendered on


January 13 January 8 leaving a balance of $289,000.

The company paid $35,000 to the note payable for


equipment purchased January 3 leaving a balance of
January 14 $485,000.

Customers paid $53,000 for sales made on January 7


Janaury 15 leaving a balance of $162,000.

Customers paid $43,000 for services rendered on


January 16 January 8 leaving a balance of $246,000.

January 17 Office supplies were purchased on account for $75,000.

Customers paid $35,000 for services rendered on


January 18 January 8 leaving a balance of $211,000.

The company paid $75,000 for equipment purchased


January 19 January 3 leaving a balance of $410,000.

The accounts payable for office supplies purchased on


January 20 January 17 was paid.

Customers paid $100,000 for sales made on January 7


January 21 leaving a balance of $62,000.

Sales were made, and the company received $235,000


January 22 in cash.

January 23
Customers paid $211,000 for services rendered on
January 8.

Customers paid $65,000 in advance for services to be


January 24 rendered.

Employees were paid wages totaling $545,000 for the


January 25 third and fourth weeks of January 2014.

January 26 Customers paid $62,000 for sales made on January 7.

Sales were made, and the company received $345,000


January 27 in cash.

Office supplies were purchased on account totaling


January 28 $215,000.

The accounts payable for office supplies purchased on


January 29 January 28 was paid.

Services were provided to customers, and the company


January 30 received $765,000 in cash.

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