Journal Entries Test Bank Questions and Correct Answers (Rated 100%)

Journal Entries Test Bank Questions and Correct Answers (Rated 100%) Issue 30 shares of common stock at $42/share. - Answers Cash -Common Stock Receive a $10,000 loan from the bank. - Answers Cash -Notes Payable Purchase $13,000 worth of equipment. - Answers Equipment -Cash Purchase $60,000 worth of inventory. - Answers Inventory -Cash Company A provides $200 worth of service to a customer who pays on credit. - Answers Accounts Receivable -Service Revenue The customer pays Company A $200 they owe them. - Answers Cash -Accounts Receivable Company A sells $35 worth of inventory to a customer for $120. - Answers Cost of Goods Sold 35 Cash 120 -Inventory 35 -Sales Revenue 120 -------------- - Answers Owners invested an additional $55,000 cash into the business. - Answers Cash 55,000 -Common Stock 55,000 ----------------march 1 - Answers A customer that purchased on credit in the previous month pays $88,000 cash to pay off the amount due. - Answers Cash 88,000 -Accounts Receivable 88,000 Take $34,000 cash out to pay employees for wages they have earned. - Answers Wages Expense 34,000 -Cash 34,000 -----------------march 16 - Answers --------------march 17 - Answers ---------------march 20 - Answers -------------march 26 - Answers --------------closing - Answers Orion Flour Mills purchased a new machine and made the following expenditures: Purchase Price ($75,000), Sales Tax ($6,000), Shipment of Machine ($1,000), Insurance on the machine for the first year ($700), Installation of machine ($2,000). The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash. - Answers Equipment 84,000 Prepaid Insurance 700 -Cash 3,700 -Accounts Payable 81,000 Abbott Landscaping purchased a tractor at a cost of $42,000 and sold it three years later for $21,600. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $3,000 residual value. Tractors are included in the Equipment account. Record the sale. - Answers Cash 21,600 Accumulated Depreciation 23,400 -Equipment 42,000 -Gain 3,000 Abbott Landscaping purchased a tractor at a cost of $42,000 and sold it three years later for $13,600. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $3,000 residual value. Tractors are included in the Equipment account. Record the sale. - Answers Cash 13,600 Accumulated Depreciation 23,400 Loss 5,000 -Equipment 42,000