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wariber [46]
3 years ago
12

The following transactions occurred during the month of June 2021 for the Stridewell Corporation. The company owns and operates

a retail shoe store. Issued 75,000 shares of common stock in exchange for $375,000 cash. Purchased office equipment at a cost of $68,750. $27,500 was paid in cash and a note payable was signed for the balance owed. Purchased inventory on account at a cost of $150,000. The company uses the perpetual inventory system. Credit sales for the month totaled $255,000. The cost of the goods sold was $127,500. Paid $3,250 in rent on the store building for the month of June. Paid $1,800 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2021. Paid $108,375 on account for the merchandise purchased in 3. Collected $51,000 from customers on account. Paid shareholders a cash dividend of $3,750. Recorded depreciation expense of $1,375 for the month on the office equipment. Recorded the amount of prepaid insurance that expired for the month. Required: Prepare journal entries to record each of the transactions and events listed above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Business
1 answer:
dem82 [27]3 years ago
4 0

Answer:

Stridewell Corporation

Journal Entries:

Debit Cash $375,000

Credit Common Stock $375,000

To record issue of 75,000 shares of common stock.

Debit Office Equipment $68,750

Credit Cash Account $27,500

Credit Notes Payable $41,250

To record purchase of office equipment.

Debit Inventory $150,000

Credit Accounts Payable $150,000

To record purchase of inventory on account

Debit Accounts Receivable $255,000

Credit Sales Revenue $255,000

To record sales on account.

Debit Cost of Goods Sold $127,500

Credit Inventory $127,500

To record cost of goods under the perpetual inventory system.

Debit Rent Expense $3,250

Credit Cash Account $3,250

To record payment of rent for June.

Debit Prepaid Insurance $1,800

Credit Cash Account $1,800

To record payment for insurance.

Debit Accounts Payable $108,375

Credit Cash Account $108,375

To record payment on account.

Debit Cash Account $51,000

Credit Accounts Receivable $51,000

To record cash collection from customers.

Debit Dividends $3,750

Credit Cash Account $3,750

To record payment of cash dividend.

Debit Depreciation Expense $1,375

Credit Accumulated Depreciation $1,375

To record depreciation charge for the month.

Debit Insurance Expense $150

Credit Prepaid Insurance $150

To record expired insurance for the month.

Explanation:

a) Journal Entries show the accounts to be debited and credited in the general ledger.  They are the first accounting records of business transactions and events.

b) Insurance Expense for June is equal to $1,800/12 = $150 per month.  This amount is deducted from the Prepaid Insurance to reduce the balance.

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Effect of Inventory Errors
pav-90 [236]

Answer:

Effect of Inventory Errors

1. Kate Interiors Company:

Ending Inventory of $378,500 counted as $366,900.

This shows that Ending inventory is undervalued by $11,600 ($378,500 - 366,900).

The cost of goods sold will be overstated by $11,600 and the net income understated by $11,600 in the income statement.

In the balance sheet, the assets are understated by $11,600 and Equity (Retained Earnings) understated by the same amount.

2. Waterjet Bath Company:

Ending Inventory of $719,880 counted as $728,660.

This shows that Ending inventory is overvalued by $8,780 ($728,660 - 719,880).

The cost of goods sold will be understated by $8,780 and the net income overstated by $8,780 in the income statement.

In the balance sheet, the assets are overstated by $8,780 and the Equity (Retained Earnings) overstated by $8,780.

Explanation:

An overstatement of Ending inventory results in understated cost of goods sold and overstated net income.  Conversely, an understatement of ending inventory results in overstated cost of goods sold and understated net income.

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2 years ago
The objective section of a resume should consist of no more than:
Alona [7]

Answer:A

Explanation:

A p e x

3 0
3 years ago
Listed below are certain costs (or discounts) incurred in the purchase or construction of new plant assets. Indicate whether the
Ann [662]

Answer:

a. Capitalized : Equipment

b. Expensed

c. Capitalized : Building

d. Expensed

e. Capitalized : Equipment

f.  Capitalized : Building

g. Capitalized : Building

h. Capitalized : Equipment

Explanation:

The Cost of Property, Plant and Equipment item according to IAS 16 includes, the Purchase Cost and any cost directly incurred in putting the assets in location and condition intended for use by management.

The costs exclude amounts collected in tax on behalf of third parties

Also not Capital expenditures increase the earning ability of the asset whilst  revenue expenditure is the maintenance of such asset.

6 0
3 years ago
Suppose the economy is in a recession. The economy needs to expand by at least $350 billion, and the marginal propensity to cons
MissTica

Answer:

$140

Explanation:

Calculation for What is the least amount the government can spend to overcome the $350 billion gap

First step is to find the Multiplier using this formula

Multiplier=1(1-Marginal propensity)

Let plug in the formula

Multiplier=1/(1-0.6)

Multiplier=1/0.4

Multiplier=2.5

Now let calculate the least amount the government can spend using this formula

Least amount=Gap/Multiplier

Let plug in the formula

Least amount=$350 billion /2.5

Least amount=$140

Therefore the least amount the government can spend to overcome the $350 billion gap is $140

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