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Gala2k [10]
3 years ago
12

An international children’s charity collects donations, which are used to buy clothing and toys for children in need. The charit

y records donations of cash and other items as Donations Revenue when received. Received $8,500 in cash and checks from a door-to-door campaign. Incurred and paid $3,000 cash for employee wages this month. Paid $3,420 cash on a short-term loan from the bank (ignore interest). Bought $4,920 worth of new toy supplies from a large toy manufacturer, paying $2,080 cash and signing a short-term note for $2,840. The manufacturer generously donated an additional $4,020 of toy supplies.
Required:
Prepare journal entries for the above transactions, which occurred during a recent month. Determine the charity’s preliminary net income.
Business
1 answer:
MatroZZZ [7]3 years ago
7 0

Answer:

Required 1

<u>General Journal</u>

Cash $8,500 (debit)

Donations Revenue $8,500 (credit)

<em>Cash and Checks received as Donation Revenue</em>

<em />

Wages Expenses $3,000 (debit)

Cash $3,000 (credit)

<em>Wages to employee paid</em>

<em />

Note Payable $3,420 (debit)

Cash $3,420 (credit)

<em>Repayment of Short Term Loan</em>

<em />

Supplies $4,920 (debit)

Cash $2,080 (credit)

Note Payable $2,840 (credit)

<em>Purchase of Toys on cash and on credit</em>

<em />

Supplies $4,020 (debit)

Donations Revenue $4,020 (credit)

<em>Donations revenue received in form of Toy Supplies</em>

Required 2

Net Income is $9,520

Explanation:

<u>Calculation of Charity’s preliminary net income.</u>

Donations Revenue ($8,500 + $4,020)  $12,520

Less Expenses :

Wages                                                       ($3,000)

Net Income/ (Loss)                                    $9,520

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Answer:

Note: Missing question but the full question is attached as picture below

The Cash dividends paid to common stockholders can be obtained the financing activities section of the Consolidated statement of cash flows tagged (Payments of dividends and dividends equivalents)

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