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Book 1

Honeytone Corporation had the following transactions: it purchased a new building for $95,000 by paying $15,000 cash and issuing an $80,000 note, purchased $12,000 of inventory on account, sold $11,000 of inventory for $14,000 on account, paid $12,000 for the inventory purchased on account, issued $40,000 of capital stock, collected $9,500 of accounts receivable, paid $510 of utility bills, sold an old building for $62,000 receiving $188,000 cash and a $44,000 note, and paid $3,000 cash dividends to stockholders.

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32 views

Book 1

Honeytone Corporation had the following transactions: it purchased a new building for $95,000 by paying $15,000 cash and issuing an $80,000 note, purchased $12,000 of inventory on account, sold $11,000 of inventory for $14,000 on account, paid $12,000 for the inventory purchased on account, issued $40,000 of capital stock, collected $9,500 of accounts receivable, paid $510 of utility bills, sold an old building for $62,000 receiving $188,000 cash and a $44,000 note, and paid $3,000 cash dividends to stockholders.

Uploaded by

mohitgaba19
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Question 1 Answer to Question 1

Honeytone Corporation had the following transactions: S.No


1 Purchased a new building, paying $15,000 cash and issuing a note for $80,000 1
2 Purchased $12,000 of inventory on account
3 Sold inventory costing $11,000 for $14,000 on account
4 Paid for inventory purchased on account in (2) above
5 Issued capital stock for $40,000 2
6 Collected $9,500 of accounts receivable
7 Paid utility bills totalling $510
8 Sold old building for $62,000, receiving $188,000 cash and a $44,000 note (no gain 3
9 Paid $3,000 cash dividends to stockholders
Required: Record the above transactions in general journal format.
4

9
Answer to Question 1
Description Debit Credit
Building $ 95,000
Cash $ 15,000
Note Payable $ 80,000

Inventory $ 12,000
Accounts Payable $ 12,000

Accounts Receivable $ 14,000


Sales $ 14,000

Accounts Payable $ 12,000


Cash $ 12,000

Cash $ 40,000
Capital Stock $ 40,000

Cash $ 9,500
Accounts Receivable $ 9,500

Utilities expenses $ 510


Cash $ 510

Cash $ 18,000
Note Receivable $ 44,000
Building $ 62,000

Dividends $ 3,000
Cash $ 3,000

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